Ampex Corporation Reports 2000 Financial Results; Establishes Year-end Reserve for Closure of MicroNet Subsidiary

Business Wire, Feb 22, 2001

Business/Technology Editors

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Feb. 22, 2001

Ampex Corporation (Amex:AXC) today reported that for the fiscal year ended December 31, 2000, it generated a net loss from continuing operations of $26.2 million or $0.46 per diluted share. In 1999, the Company reported a net loss from continuing operations of $8.4 million or $0.16 per diluted share. Operating losses from TV onthe WEB, Inc. and Ampex's write-off of the investment in TV onthe WEB accounted for $0.15 per diluted share of the 2000 loss. In 1999, TV onthe WEB contributed a net loss of $0.11 per diluted share. Revenues from continuing operations, which are comprised of royalties from licensing the Company's patents and revenues from its Internet video operations, totaled $15.1 million in 2000 and $21.7 million in 1999. Revenues in 1999 included a one-time royalty receipt of $6.7 million.

As of year-end 2000, the Company determined to discontinue the operations of MicroNet Technology, Inc., its subsidiary that manufactures disk arrays, and to establish a reserve for the costs of closure. Accordingly, the results of operations of MicroNet have been classified with those of Ampex Data Systems Corporation as "Discontinued Operations" for all periods presented. In 2000, MicroNet generated a loss of $11.6 million on revenues of $12.1 million or $0.21 per diluted share. The loss included a provision to write off the balance of the Company's investment in MicroNet, including unamortized goodwill, totaling $0.11 per diluted share. In 1999, MicroNet generated a loss of $4.0 million on revenues of $11.0 million or $0.07 per diluted share. Ampex Data Systems Corporation reported net income of $2.0 million on revenues of $47.9 million or $0.04 per diluted share in 2000. In 1999, Data Systems reported a net loss of $3.0 million on revenues of $51.6 million or approximately $0.06 per diluted share. Ampex continues to seek a buyer for the Data Systems business.

Giving effect to both continuing and discontinued operations discussed above, the Company reported a net loss applicable to common stockholders of $34.5 million or $0.61 per diluted share in 2000 versus $15.0 million or $0.28 per diluted share in 1999.

In 2000, the Company's Internet video operations, conducted through its subsidiary iNEXTV and affiliates, recorded revenue of $2.9 million and incurred an operating loss of $25.6 million or $0.46 per diluted share. In 1999, the Company's Internet video businesses recorded revenues of $1.9 million and incurred an operating loss of $19.5 million or $0.37 per diluted share. In 2000, the Company elected to cease funding the webcasting and video production operations of TV onthe Web, enabling it to redeploy financial resources to the production of made-for-the Internet video programming and technology for distribution on the World Wide Web, which management believes will yield better long-term returns. In 2000 and 1999, TV onthe Web accounted for substantially all of the Company's Internet revenue. iNEXTV will continue to offer certain web video services through its other Internet subsidiaries.

Royalty income from licensing the Company's non-Internet technology totaled $12.3 million in 2000 compared to $19.8 million in 1999, and contributed an operating profit of $11.2 million or $0.20 per diluted share in 2000 compared to an operating profit of $18.6 million or $0.35 per diluted share in 1999. 1999 royalty income included a one-time payment of $6.7 million or $0.13 per diluted share representing a portion of royalties earned in prior periods from a multi-year license agreement.

The Company intends to invest a significant portion of the funds that it receives upon the sale of Data Systems in its Internet video activities and its other continuing operations. In anticipation of the sale of Data Systems, the Company raised approximately $8 million from the sale of debt securities late in 2000. The Company is negotiating a sale and leaseback of certain real estate assets in order to repay this debt, which is scheduled to mature in May 2001. At December 31, 2000, the Company's cash and marketable securities totaled $15.4 million. By terminating activities at TV onthe Web and MicroNet, the Company has reduced its operating cash requirements of its continuing operations below levels incurred during 2000. However, in the event that Data Systems is not sold, the Company will be required to raise addition capital during 2001 to finance iNEXTV's operations, which are not expected to be profitable in the next 12 months. Recently, iNEXTV has increased the syndication of its video programming to other web sites under advertising revenue sharing arrangements. By increasing the size of its audiences, management believes that it will materially enhance the attractiveness of its programming to potential buyers of web based video advertising. The Company has also begun to syndicate programming developed by others and will continue to offer services and technology to video enable other companies' web sites.