Murdock Communications Corporation Announces Fourth Quarter and Fiscal Year Results

Apr 18, 2001, 01:00 ET from Murdock Communications Corporation

    CEDAR RAPIDS, Iowa, April 18 /PRNewswire/ --
     Murdock Communications Corporation (OTC Bulletin Board:   MURC and MURCW)
 today reported results for the fourth quarter and fiscal year ended
 December 31, 2000.  The Company reported revenues of $8.4 million and a net
 loss of $4.4 million attributable to common shareholders, or $0.41 per share
 for the year ended December 31, 2000 compared with revenues of $27.5 million
 and a net loss of $18.6 million attributable to common shareholders, or
 $1.79 per share for the prior year.
     For the fourth quarter ended December 31, 2000, the Company reported
 revenues of $1.9 million and a net loss of $2.7 million, or $0.22 per share
 compared with revenues of $7.0 million and a net loss of $16.0 million, or
 $1.53 per share for the prior year period.
     Fourth quarter results included a $1.6 million charge for the write-down
 of the Company's investment in Actel, a $1.2 million charge for impairment of
 assets primarily relating to the goodwill recorded in the PIC segment, and a
 $500,000 charge for the write-down of the Company's investment in the AcNet
 entities, as circumstances indicate the carrying value of these assets may not
 be recoverable.  Fourth quarter results also included a $894,000 credit for
 USF Fees and a $722,000 extraordinary gain on the extinguishment of debt.
 Actel, based in Mobil, Ala., is a facilities-based competitive local exchange
 carrier of advanced voice and data communications to small and medium sized
 enterprises in the Southeastern United States.  Actel filed for bankruptcy
 under Chapter 11 on April 11, 2001.  Prior year results included significant
 charges which are described in the Company's Form 10-KSB filing for the year
 ended December 31, 1999.
     Revenues for the fourth quarter and fiscal year ended December 31, 2000
 declined significantly from the prior periods primarily due to the loss of all
 or a significant portion of business of two of PIC's principal customers and
 due to the effective closing of the MTS segment in early 2000.
     The Company's current strategic direction is to continue to negotiate with
 its creditors to restructure indebtedness and to attempt to obtain financing
 to fund operations.  If the Company is successful in completing further
 improvements to its financial condition, the Company may seek other strategic
 alternatives, including attempting to use the Company's public shell as a
 merger vehicle.  If the Company is unsuccessful in this strategy, the Company
 may not be able to continue as a going concern.
     This news release contains statements, including statements of
 management's belief or expectation, which may be forward-looking within the
 meaning of applicable securities laws.  The forward-looking statements include
 statements regarding new opportunities and projections regarding future
 revenues and earnings.  These statements are subject to certain risks and
 uncertainties that could cause actual future results and developments to
 differ materially from those currently projected, including the following
 risks and uncertainties:  the Company's ability to realize potential value
 from its PIC operating unit and its Actel investment; the possibility that the
 Company's creditors may take legal action for the repayment of past due debt;
 the Company's access to adequate debt or equity financing or other sources of
 cash flows; the Company's ability to continue as a going concern if it is
 unable to access adequate financing or other sources of cash flows or to
 otherwise restructure outstanding indebtedness; the Company's ability to
 stabilize its PIC business and the ability of PIC to distribute cash to the
 Company in future periods; and the risk that the Company's analyses of these
 risks could be incorrect and/or that the strategies developed to address them
 could be unsuccessful.  Additional risk factors are discussed in the Company's
 most recent reports on Form 10-K and Form 10-Q filed with the Securities and
 Exchange Commission.
 
 
                       MURDOCK COMMUNICATIONS CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
     Three Months Ended and Twelve Months Ended December 31, 2000 and 1999
                 (Dollars in thousands, except per share data)
                                  (Unaudited)
 
                              Three Months Ended        Twelve Months Ended
                          December 31,  December 31, December 31,  December 31,
                              2000          1999         2000          1999
     REVENUES
          Call processing    $1,878        $6,447       $8,327       $24,424
          Other revenues         19           587          110         3,039
            Total revenues    1,897         7,034        8,437        27,463
 
     COSTS OF SALES
          Call processing     1,383         1,533        6,410        14,850
          Other cost of sales    (6)          406            9         1,657
          Bad debt expense
           and universal
           service fund fees   (894)        7,992         (894)        9,489
            Total cost of sales 483         9,931        5,525        25,996
     GROSS PROFIT             1,414        (2,897)       2,912         1,467
 
     OPERATING EXPENSES
          Selling, general
           and administrative
           expenses             481         1,061        2,750         5,348
          Depreciation and
           amortization
           expense              204           464          935         1,888
          Impairment of
           assets             2,798         3,292        5,510         3,292
          AcNet bad debt
           and acquisition
           expense              501         3,703          990         3,703
            Total operating
             expenses         3,984         8,520       10,185        14,231
 
     INCOME FROM OPERATIONS  (2,570)      (11,417)      (7,273)      (12,764)
 
     NON-OPERATING INCOME
      (EXPENSE)
 
          Interest expense     (935)       (1,184)      (3,540)       (3,519)
          Other income           38            91        7,287           314
            Total non-
             operating income
             (expense)         (897)       (1,093)       3,747        (3,205)
 
     (LOSS) BEFORE INCOME
       TAXES                 (3,467)      (12,510)      (3,526)      (15,969)
 
          Income tax
           (expense) benefit     13          (835)           9          (472)
 
     LOSS FROM CONTINUING
      OPERATIONS             (3,454)      (13,345)      (3,517)      (16,441)
 
     DISCONTINUED OPERATIONS
          Income (loss)
           from operations       --        (2,670)      (1,175)       (1,957)
          Loss on disposition    --            --         (332)           --
            Total discontinued
             operations          --        (2,670)      (1,507)       (1,957)
     LOSS BEFORE EXTRAORDINARY
      ITEM                   (3,454)      (16,015)      (5,024)      (18,398)
 
     EXTRAORDINARY ITEM-
      GAIN ON EXTINGUISHMENT
      OF DEBT                   722            --          722            --
 
     NET LOSS                (2,732)      (16,015)      (4,302)      (18,398)
     DIVIDENDS AND ACCRETION
      ON 8% SERIES A
      CONVERTIBLE PREFERRED
      STOCK                      13           (46)        (125)         (194)
 
     NET LOSS ATTRIBUTABLE
      TO COMMON
      SHAREHOLDERS          $(2,719)     $(16,061)     $(4,427)     $(18,592)
 
     BASIC AND DILUTED
      NET LOSS PER COMMON
      SHARE
          Loss from
           continuing
           operations        $(0.28)       $(1.27)      $(0.34)       $(1.60)
          Loss from
           discontinued
           operations            --         (0.26)       (0.14)        (0.19)
          Loss before
           extraordinary
           item               (0.28)        (1.53)       (0.48)        (1.79)
          Extraordinary item
           - gain from
           extinguishment of
           debt                0.06            --         0.07            --
            Net Loss         $(0.22)       $(1.53)      $(0.41)       $(1.79)
 
     BASIC AND DILUTED
      WEIGHTED AVERAGE
      COMMON SHARES
      OUTSTANDING        12,268,225    10,481,454   10,869,511    10,392,940
 
 

SOURCE Murdock Communications Corporation
    CEDAR RAPIDS, Iowa, April 18 /PRNewswire/ --
     Murdock Communications Corporation (OTC Bulletin Board:   MURC and MURCW)
 today reported results for the fourth quarter and fiscal year ended
 December 31, 2000.  The Company reported revenues of $8.4 million and a net
 loss of $4.4 million attributable to common shareholders, or $0.41 per share
 for the year ended December 31, 2000 compared with revenues of $27.5 million
 and a net loss of $18.6 million attributable to common shareholders, or
 $1.79 per share for the prior year.
     For the fourth quarter ended December 31, 2000, the Company reported
 revenues of $1.9 million and a net loss of $2.7 million, or $0.22 per share
 compared with revenues of $7.0 million and a net loss of $16.0 million, or
 $1.53 per share for the prior year period.
     Fourth quarter results included a $1.6 million charge for the write-down
 of the Company's investment in Actel, a $1.2 million charge for impairment of
 assets primarily relating to the goodwill recorded in the PIC segment, and a
 $500,000 charge for the write-down of the Company's investment in the AcNet
 entities, as circumstances indicate the carrying value of these assets may not
 be recoverable.  Fourth quarter results also included a $894,000 credit for
 USF Fees and a $722,000 extraordinary gain on the extinguishment of debt.
 Actel, based in Mobil, Ala., is a facilities-based competitive local exchange
 carrier of advanced voice and data communications to small and medium sized
 enterprises in the Southeastern United States.  Actel filed for bankruptcy
 under Chapter 11 on April 11, 2001.  Prior year results included significant
 charges which are described in the Company's Form 10-KSB filing for the year
 ended December 31, 1999.
     Revenues for the fourth quarter and fiscal year ended December 31, 2000
 declined significantly from the prior periods primarily due to the loss of all
 or a significant portion of business of two of PIC's principal customers and
 due to the effective closing of the MTS segment in early 2000.
     The Company's current strategic direction is to continue to negotiate with
 its creditors to restructure indebtedness and to attempt to obtain financing
 to fund operations.  If the Company is successful in completing further
 improvements to its financial condition, the Company may seek other strategic
 alternatives, including attempting to use the Company's public shell as a
 merger vehicle.  If the Company is unsuccessful in this strategy, the Company
 may not be able to continue as a going concern.
     This news release contains statements, including statements of
 management's belief or expectation, which may be forward-looking within the
 meaning of applicable securities laws.  The forward-looking statements include
 statements regarding new opportunities and projections regarding future
 revenues and earnings.  These statements are subject to certain risks and
 uncertainties that could cause actual future results and developments to
 differ materially from those currently projected, including the following
 risks and uncertainties:  the Company's ability to realize potential value
 from its PIC operating unit and its Actel investment; the possibility that the
 Company's creditors may take legal action for the repayment of past due debt;
 the Company's access to adequate debt or equity financing or other sources of
 cash flows; the Company's ability to continue as a going concern if it is
 unable to access adequate financing or other sources of cash flows or to
 otherwise restructure outstanding indebtedness; the Company's ability to
 stabilize its PIC business and the ability of PIC to distribute cash to the
 Company in future periods; and the risk that the Company's analyses of these
 risks could be incorrect and/or that the strategies developed to address them
 could be unsuccessful.  Additional risk factors are discussed in the Company's
 most recent reports on Form 10-K and Form 10-Q filed with the Securities and
 Exchange Commission.
 
 
                       MURDOCK COMMUNICATIONS CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
     Three Months Ended and Twelve Months Ended December 31, 2000 and 1999
                 (Dollars in thousands, except per share data)
                                  (Unaudited)
 
                              Three Months Ended        Twelve Months Ended
                          December 31,  December 31, December 31,  December 31,
                              2000          1999         2000          1999
     REVENUES
          Call processing    $1,878        $6,447       $8,327       $24,424
          Other revenues         19           587          110         3,039
            Total revenues    1,897         7,034        8,437        27,463
 
     COSTS OF SALES
          Call processing     1,383         1,533        6,410        14,850
          Other cost of sales    (6)          406            9         1,657
          Bad debt expense
           and universal
           service fund fees   (894)        7,992         (894)        9,489
            Total cost of sales 483         9,931        5,525        25,996
     GROSS PROFIT             1,414        (2,897)       2,912         1,467
 
     OPERATING EXPENSES
          Selling, general
           and administrative
           expenses             481         1,061        2,750         5,348
          Depreciation and
           amortization
           expense              204           464          935         1,888
          Impairment of
           assets             2,798         3,292        5,510         3,292
          AcNet bad debt
           and acquisition
           expense              501         3,703          990         3,703
            Total operating
             expenses         3,984         8,520       10,185        14,231
 
     INCOME FROM OPERATIONS  (2,570)      (11,417)      (7,273)      (12,764)
 
     NON-OPERATING INCOME
      (EXPENSE)
 
          Interest expense     (935)       (1,184)      (3,540)       (3,519)
          Other income           38            91        7,287           314
            Total non-
             operating income
             (expense)         (897)       (1,093)       3,747        (3,205)
 
     (LOSS) BEFORE INCOME
       TAXES                 (3,467)      (12,510)      (3,526)      (15,969)
 
          Income tax
           (expense) benefit     13          (835)           9          (472)
 
     LOSS FROM CONTINUING
      OPERATIONS             (3,454)      (13,345)      (3,517)      (16,441)
 
     DISCONTINUED OPERATIONS
          Income (loss)
           from operations       --        (2,670)      (1,175)       (1,957)
          Loss on disposition    --            --         (332)           --
            Total discontinued
             operations          --        (2,670)      (1,507)       (1,957)
     LOSS BEFORE EXTRAORDINARY
      ITEM                   (3,454)      (16,015)      (5,024)      (18,398)
 
     EXTRAORDINARY ITEM-
      GAIN ON EXTINGUISHMENT
      OF DEBT                   722            --          722            --
 
     NET LOSS                (2,732)      (16,015)      (4,302)      (18,398)
     DIVIDENDS AND ACCRETION
      ON 8% SERIES A
      CONVERTIBLE PREFERRED
      STOCK                      13           (46)        (125)         (194)
 
     NET LOSS ATTRIBUTABLE
      TO COMMON
      SHAREHOLDERS          $(2,719)     $(16,061)     $(4,427)     $(18,592)
 
     BASIC AND DILUTED
      NET LOSS PER COMMON
      SHARE
          Loss from
           continuing
           operations        $(0.28)       $(1.27)      $(0.34)       $(1.60)
          Loss from
           discontinued
           operations            --         (0.26)       (0.14)        (0.19)
          Loss before
           extraordinary
           item               (0.28)        (1.53)       (0.48)        (1.79)
          Extraordinary item
           - gain from
           extinguishment of
           debt                0.06            --         0.07            --
            Net Loss         $(0.22)       $(1.53)      $(0.41)       $(1.79)
 
     BASIC AND DILUTED
      WEIGHTED AVERAGE
      COMMON SHARES
      OUTSTANDING        12,268,225    10,481,454   10,869,511    10,392,940
 
 SOURCE  Murdock Communications Corporation