LOS ANGELES, CA -- Aug. 22, 1996 -- DEP Corp. (NASDAQ
SmallCap:DPCAQ, DPCBQ) Thursday announced that it has reached an
agreement with its lender group on an amended plan of
The plan also has the support of the official committee
representing the company's unsecured creditors.
"We are pleased that we have been able to reach an agreement
with our lenders that should enable the company to advance a
consensual plan of reorganization," said Robert Berglass, chairman
and president of DEP.
"Our goal from day one was to develop a plan which would
restructure the company's long-term debt consistent with our cash
flow and which would treat all of our creditors and stockholders
fairly. In our view, this plan does just that."
The company stated that it plans to distribute an amended
disclosure statement which incorporates the consensual plan to all
appropriate constituents by early September 1996 and to request a
confirmation hearing with the bankruptcy court which would allow the
company to emerge from Chapter 11 by the end of October 1996.
Under the plan which was announced Thursday:
"I especially want to thank our suppliers, retail customers and
employees for their continued support during this challenging
period. I also want to acknowledge and thank the unsecured
creditors' committee. Their continuous faith strengthened our
conviction to resolve this situation in the best interests of all
constituents. Now that we have reached an agreement, we can
concentrate all of our resources and energies on growing our
business and strengthening our brands."
The company also stated it intends to continue its constructive
fraudulent transfer case against S.C. Johnson & Son Inc. in the
bankruptcy court. The net proceeds of any recoveries in that action
are pledged to the lenders to help DEP meet its debt service.
DEP is a consumer products company that develops, manufactures
and markets a wide variety of hair, oral and skin care products
under 10 major brand names: Dep, L.A. Looks, Agree, Halsa, Lilt,
Topol, Lavoris, Natures Family, Porcelana and Cuticura. The company
employs approximately 300 people at its Rancho Dominguez, Calif.
headquarters and production facility.
The company filed to restructure under Chapter 11 of the
bankruptcy code on April 1, 1996.
CONTACT: DEP Corp.,Rancho Dominguez, Calif.
D. Lee Johnson, 310/604-0777
Sitrick and Company, Los Angeles
Ann Julsen, 310/788-2850
HOUSTON, TX -- Aug. 22, 1996 -- Learmonth & Burchett
Management Systems Plc (NASDAQ:LBMSY) (LBMS) today reported first
quarter financial results and announced restructuring plans aimed at
returning LBMS to profitability through focusing on the company's
established strengths in the process management market and reducing
operating costs outside the U.S.
For the three months ended July 31, 1996, the company reported a
net loss of $4.3 million, or $0.34 per American Depositary Share
($0.17 per Ordinary Share), on total revenue of $5.3 million,
compared to net income of $459,000 or $0.04 per American Depositary
Share ($0.02 per Ordinary Share) on total revenue of $9.8 million
for the three months ended July 31, 1995.
The decline in total revenue from the first quarter of fiscal
1996 to the first quarter of fiscal 1997 was attributed to lower
revenue outside of the U.S. and the historical seasonal downturn in
the U.S. revenue for the first quarter.
In connection with the restructuring plan described in the
following paragraphs, the company expects to record a one-time
restructuring charge of approximately $18 million in the three
months ending Oct. 31, 1996. This charge is expected to relate
primarily to lease costs and severance costs.
New Business Strategy
Michael S. Bennett, the newly-appointed CEO, today outlined an
aggressive new business strategy aimed at building on the company's
core strengths and capitalizing on significant opportunities in the
process management marketplace.
LBMS' new strategic direction calls for increased investment in
the development and marketing of Process Engineer(R), the company's
market-leading process management tool, and the implementation of a
more cost-effective global sales model. With increased resources in
the Process Engineer product line, LBMS will explore options to
extend the company's focus to address broader process management
"This represents a major turning point for LBMS -- a strategic
thrust aimed at not only solidifying our leadership in process
management, but allowing us to aggressively target new process
management business opportunities in other markets," said Mike
Increased Investment in Process Engineer
At the core of the plan is an increased focus in product
development and marketing resources on the Process Engineer product
line, which is recognized by industry analysts as holding a
substantial share of the process management market. Since its
inception in 1992, Process Engineer has been implemented by a broad
range of Fortune 1000 companies.
Although Process Engineer product revenue did not increase from
the first quarter of fiscal 1996 to the first quarter of fiscal
1997, Process Engineer product revenue has increased approximately
70 percent annually over the last four fiscal years and the company
expects Process Engineer product revenue to increase in the current
fiscal year over fiscal 1996.
LBMS will shortly announce plans for upcoming enhancements to
Process Engineer, including three new releases of the product
designed for specific market niches to be introduced this year.
Additionally, the company plans for the continued expansion of
ProcessWare(TM), a program through which LBMS partners with industry
subject matter experts to publish best practice processes in Process
Engineer. New ProcessWare partners are expected to be announced in
the next few months.
"With this shift in focus toward Process Engineer, LBMS is
moving to more effectively match R&D and marketing investment with
the product line that is generating a majority of our revenue," said
Bennett. "We believe this is a major step in further expanding our
lead in the process management market."
Global Sales Model
Outside the U.S., LBMS will transition its existing direct sales
and service resources to distributors. This should provide the
company with a more cost effective method for product sales and
service outside the U.S., continuity in customer support outside the
U.S. and continued ability to provide product and services to
current and prospective customers on a global basis.
In connection with this transition, LBMS will eliminate
substantially all on-going operational costs outside the U.S.
In the U.S., LBMS will increase its investment in direct sales
operations related to the Process Engineer product line and will
reduce costs not related to these activities.
New Management Team
Key to the success of the company's new strategic direction is a
strengthened management team. On August 6, LBMS announced the
appointment of Michael Bennett as president and CEO, and Gerald
Christopher as chairman of the Board of Directors. Both Bennett and
Christopher bring extensive management and technology industry
experience to the company. Bennett has held senior management
positions with Summagraphics, Dell Computer and Digital Equipment
Corporation, while Christopher has held top positions at Amber Wave
Systems, Extention Technology and Channel Computing.
Except for any historical information contained herein, the
matters discussed in this news release are forward looking
statements that involve risks and uncertainties, including the
timely development, release and acceptance of new products and
alliances, the impact of competitive products and pricing, and the
other risks detailed from time to time in the company's U.S.
Securities and Exchange Commission reports, including the company's
recent prospectus. The company continues to be susceptible to
potentially significant variations in quarterly and annual revenue
and operating results.
Based in Houston, LBMS, Inc. is the leading provider of Process
Management products to Fortune 1000 companies. LBMS' integrated
line of Process Management products provide organizations with a
library of "best practices" for all areas of applications
development and a comprehensive set of tools for process definition,
deployment, execution and improvement. LBMS has an installed base
of more than 21,000 users worldwide in areas such as financial
services, technology, manufacturing, retailing, oil, government and
utilities. LBMS company and product information can be found on the
World Wide Web at http://www.lbms.com.
Unaudited financial information in U.S. dollars, under
accounting principles generally accepted in the U.S., follow:
Learmonth & Burchett Management Systems PLC
Consolidated Statement of Operations
(in thousands, except per share information)
Three Months Ended
Product licenses $ 2,004 $ 5,376
Services 3,250 4,400
Total revenue 5,254 9,776
Cost of Revenue:
Product licenses 58 242
Services 1,616 1,669
Total cost of revenue 1,674 1,911
Gross margin 3,580 7,865
Sales and marketing 4,522 4,214
Research and development 2,143 1,902
General and administrative 1,308 1,231
Total operating expenses 7,973 7,347
Operating income (loss) (4,393) 518
Interest income 123 32
Interest expense (34) (18)
Other income and (expense) 4
Income (loss) from continuing
operations before income taxes (4,300) 532
Income tax benefit (expense) (73)
Net loss $ (4,300) $ 459
Income (Loss) per ordinary share $(0.17) $0.02
Income (Loss) per ADS (a) $(0.34) $0.04
Weighted average ordinary and ordinary
share equivalents outstanding 25,535 23,004
(a) Adjusted to reflect the ratio of one ADS to two ordinary
Learmonth & Burchett Management Systems PLC
Consolidated Balance Sheet
(in thousands, except per share information)
July 31 April 30
Assets (unaudited) (audited)
Cash and cash equivalents $11,386 $10,960
Trade accounts receivable 5,025 9,579
Other current assets 3,201 3,498
Total current assets 19,612 24,037
Furniture, fixtures and equipment 2,902 2,982
Other assets 160 160
Total assets $22,674 $27,179
Liabilities and Shareholders' Equity
Current maturities of indebtedness $853 $1,003
Accounts payable 1,161 1,630
Deferred revenue 5,321 3,691
Accrued liabilities 4,425 5,344
Executive Stock Option Trust indebtedness 926 903
Total current liabilities 12,686 12,571
Indebtedness 519 524
Other liabilities 1,967 2,149
Total liabilities 15,172 15,244
Ordinary shares, 10 pence par value 4,255 4,253
Additional paid-in capital 20,282 20,323
Adjustment for ESOT (926) (903)
Cumulative translation adjustment 368 439
Accumulated deficit (16,477) (12,177)
Total shareholders' equity 7,502 11,935
Commitments and Contingencies
Total liabilities and
shareholders' equity $22,674 $27,179
MARKHAM, Ontario -- Aug. 22, 1996 -- LEGACY Storage Systems International Inc.
reports financial results for the year ended May 31, 1996.
Results include activities of Tecmar Technologies, Inc.
(previously Rexon Incorporated) for the three months from the date
of acquisition (March 4, 1996). Tecmar Technologies, Inc. is based
in Longmont, Colorado and has operations in Europe and the Far East.
All results are in $US.
Revenue for the year was $42.9 million up from $21.8 million in
1995. $14.3 million was contributed by Tecmar. The loss, before
writedown of goodwill, was $4.4 million up from $0.7 million in
1995. In addition Legacy wrote off goodwill totaling $19.4 million
primarily associated with the takeover of Tecmar. This resulted in
a net loss for the year of $23.8 million ($0.40 per share).
"Legacy's financial position continues to be sound" says Legacy
CFO Robert McQuade. "The company has $14.4 million working capital
and no long term debt. We have also recently negotiated a $10
million line of credit to finance Tecmar's capital expenditures and
"The quarter following the acquisition of Tecmar in March, 1996
was extremely challenging for our management team" says David
Killins, Chairman and CEO of Legacy. "The restructuring and
rebuilding of Tecmar is a process which will take longer than we
anticipated and will continue through the 1997 fiscal year. We
continue to believe, however, that our strategy of acquiring and
developing proprietary technology and distribution capability in the
U.S. will enable us to become a major player in the data storage
markets in which we compete."
Ernie Wassmann, President and CEO of Tecmar Technologies, Inc.,
commented: "We have taken the tough decisions necessary to make
Tecmar successful. The business was severely impaired during its
time in Chapter 11 bankruptcy proceedings. Its previous management
team was consumed with court related matters, research and
development had been deferred, customers had become increasingly
concerned over unreliable product shipments and suppliers were
demanding up front payment to secure delivery of product.
Furthermore, on coming out of Chapter 11, the company was faced with
absorbing a 20 percent price reduction in a key product line to
match a major competitor's pricing."
Some of the actions Mr. Wassmann and his team have taken since
the acquisition include:
"We are making steady progress in introducing our proprietary
data storage server system to Canada and the US," says Keith Leno
President and CEO of the Systems Division. "We are building the
marketing and sales infrastructure needed to capture our niche in
these key markets." To date 14 units had been sold.
Also in Canada, Storage One, which purchases data storage
products for sale into world markets and to supply the Systems
Division's manufacturing needs, generated $17.2 million in sales in
1996 vs $11.9 million in 1995.
Legacy also announced that, subject to regulatory and
shareholder approval, it proposes to consolidate its common shares
on a 10:1 basis.
David Killins commented, "The proposed stock consolidation will
permit trading of Legacy shares at a price level that will permit
greater access to investments in the Company by institutional
investors who tend not to invest below certain minimum trading
prices." The proposed stock consolidation will result in the
current issued shares being reduced from 83,850,000 to 8,385,000.
Legacy Storage Systems International Inc. is a global leader in
the design, development and manufacture of data storage
CONTACT: LEGACY Storage Systems International Inc.
David Killins, 905/475-1077 Ext. 225
LEGACY Storage Systems International Inc.
John Thornton, Director, Investor Relations, 905/475-1077
LEGACY Storage Systems International Inc.
Robert McQuade, CFO, 905/475-1077 Ext. 224