AMPX Ampex Corp Class A (MM)

On April 15, 2008, Ampex Corporation (Nasdaq:AMPX) filed its Form 10-K with the Securities and Exchange Commission which included the Company�s reported annual 2007 financial results. For the year, Ampex reported income from continuing operations of $1.0 million ($0.26 per diluted share) on revenues of $41.5 million in fiscal 2007 compared to a loss from continuing operations of $3.8 million ($0.98 per diluted share) on revenues of $35.9 million in fiscal 2006. Licensing revenue in 2007 totaled $12.4 million of which $1.9 million related to negotiated settlements covering a prepayment of royalty obligations through 2011. The Licensing segment reported operating income of $9.1 million ($2.33 per diluted share) in fiscal 2007. The Licensing segment reported operating income of $0.2 million ($0.04 per diluted share) in fiscal 2006. In the fourth quarter of 2007, the Licensing segment reported revenues of $2.6 million and operating income of $1.4 million. ($0.35 per diluted share). In the fourth quarter of 2006, the Licensing segment reported revenues of $3.4 million and operating income of $1.1 million ($0.29 per diluted share). The Recorders segment reported operating income of $5.0 million ($1.29 per diluted share) in fiscal 2007 on revenues from the sale of products and services totaling $29.0 million. The Recorders segment reported operating income of $3.4 million ($0.89 per diluted share) in fiscal 2006 on revenues of $25.1 million. The disk- and solid state memory-based products accounted for 90% of system sales in 2007 up from 72% in fiscal 2006. In the fourth quarter of 2007, the Recorders segment reported revenues from the sale of products and services totaling $8.9 million, operating costs of $6.7 million and an operating profit of $2.2 million ($0.58 per diluted share). In the fourth quarter of 2006, the Recorders segment reported revenues from the sale of products and services totaling $7.9 million, operating costs of $6.5 million and an operating profit of $1.4 million ($0.37 per diluted share). Non-recurring, non-operating income totaling $0.1 million ($0.03 per diluted share) was realized in 2007, down from $3.4 million ($0.88 per diluted share) in 2006. Interest expense increased to $4.3 million ($1.11 per diluted share) in 2007 from $3.0 million ($0.77 per diluted share) in 2006 due to higher debt balances. In 2007, the Company incurred reorganization costs of $0.6 million in connection with the restructuring of its liabilities. On March 30, 2008, Ampex and its U.S. subsidiaries filed voluntary petitions for relief under chapter�11 of title 11 of the United States Code (the �Bankruptcy Code�) in the United States Bankruptcy Court for the Southern District of New York (the �Bankruptcy Court�). The Company will continue to operate its business as a �debtor-in-possession� under the jurisdiction of the Bankruptcy Court and in accordance with the provisions of the Bankruptcy Code. The Bankruptcy Court has authorized the Company to continue to pay its employees� salaries and benefits and honor its customer warranties and other programs in the ordinary course of business. The Company is further authorized to satisfy all ordinary course obligations to vendors and customers that arose on or after March 30, 2008. On or about March 30, 2008, the Company filed a pre-negotiated plan of reorganization (the �Plan�) and related disclosure statement (the �Disclosure Statement�), which are subject to approval by the Bankruptcy Court. The Company negotiated the terms of the Plan with and obtained the support of creditors holding a majority of its secured debt and its largest unsecured creditor prior to filing for chapter 11 protection. This support is evidenced by the Plan Support Agreement (�PSA�), which the parties filed contemporaneously with the commencement of the chapter 11 cases. The parties to the PSA have agreed to support the Plan and not to support any other plan in exchange for our agreement to implement all steps necessary to solicit the requisite acceptances of the Plan and obtain from the Bankruptcy Court an order confirming the Plan in accordance with the terms of the PSA. The PSA may be terminated in the event that the Plan and Disclosure Statement are not approved by certain deadlines, the Plan is not consummated within a certain period of time after its confirmation, and in certain other situations. We believe that the Company will emerge from chapter 11 before the end of the year with a viable capital structure and with sufficient liquidity for it to continue operating as a going concern. The overall purpose of the Plan is to provide for the restructuring of the Company�s liabilities in a manner designed to maximize recovery to all stakeholders and to enhance the financial viability of the newly reorganized Company after it emerges from chapter 11 by de-levering the Company, providing additional liquidity and arranging a long-term financing solution to future pension contributions that does not over-leverage the Company in future years. The 2007 Form 10-K filed with the Securities and Exchange Commission on April 15, 2008 included an audit opinion on the Company�s financial statements that contained a �going concern uncertainty� explanatory paragraph due to the Company�s recent filing of a voluntary petition for relief under chapter 11 of the U.S. Bankruptcy Code. The financial statements included in the Form 10-K do not include any adjustments that might result from the outcome of this uncertainty. Ampex Corporation, www.Ampex.com, headquartered in Redwood City, California, is one of the world�s leading innovators and licensors of technologies for the visual information age. This news release contains predictions, projections and other statements about the future that are intended to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the Company's actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, but are not limited to, those described in the Company's 2007 Annual Report on Form 10-K for the fiscal year ended December�31, 2007, its Quarterly Reports on Form 10-Q and the other documents periodically filed by it with the SEC, as well as the following: the effects of the Company's chapter 11 filing on the Company and the interests of various creditors, equity holders and other constituents; court rulings in the chapter 11 case and the outcome of the proceeding in general; the length of time the Company will operate under the chapter 11 proceeding; the risks that unasserted claims against the Company may exceed the amounts currently estimated by the Company, and the impact that these claims may have upon the Company's ability to implement its prenegotiated plan of reorganization and upon the chapter 11 case generally; increased legal costs related to the bankruptcy case and other litigation; the Company's ability to maintain contracts that are critical to its operation, to obtain and maintain normal terms with customers, suppliers and service providers and to retain key executives, managers and employees; the Company's ability to manage costs, maintain adequate liquidity, maintain compliance with debt covenants, maintain its Nasdaq listing for its common stock, and continue as a going concern. In assessing forward-looking statements, readers are urged to consider carefully these cautionary statements. Forward-looking statements speak only as of the date of this release, and the Company disclaims any obligation or undertaking to update such statements.