Top Source Reports Fiscal 1998 Results
13 January 1999
Top Source Reports Fiscal 1998 Results; Expects Improved First Half of Fiscal 1999
PALM BEACH GARDENS, Fla.--Jan. 13, 1999--Top Source Technologies, Inc. (AMEX: TPS) today reported a loss of $5,852,382 or ($.21) per share for year ended September 30, 1998 compared to a loss of $3,235,316 or ($.12) per share for period ended September 30, 1997 (see accompanying table). Included in the Company's 1998 fiscal fourth quarter and fiscal year loss is a write-down of $1,294,045 relating to the first generation OSA units. The Company also reported that as a result of a substantial one-time gain on the previously reported sale of a minority interest in its Top Source Automotive subsidiary ("TSA"), it expects to achieve a $.01 per share profit in its first fiscal quarter of 1999, which ended on December 31, 1998.David Natan, Vice President and CFO, stated, "The financial restructuring we have undertaken during the past four months has strengthened our balance sheet. We've reduced debt by approximately $2,300,000 and are now in a position to complete the divestiture of substantially all of our TSA's subsidiary's assets by March 31, 1999, subject to buyer financing. In addition, as a result of the Flying J. Inc. order for the outright purchase of 10 OSA-II units, we expect to record approximately $700,000 of OSA revenue relating to these units during our second fiscal quarter ending March 31, 1999."
Will Willis, Chairman, and CEO, commented, "Despite our operating losses during fiscal 1998, we've made significant progress in a number of areas. We now have a much improved and more commercially viable OSA unit ("OSA-II"). Further, due to Jeff Mennen's equity infusion in December 1998, and our financial restructuring, we now have sufficient cash on hand to continue our OSA-II marketing efforts, whether or not the TSA transaction is ultimately consummated. In the meantime, we continue to actively manage TSA as a profitable entity. In December 1998, we received a new Detroit OEM dealer program for a custom designed audio system for one model of vehicle. This program should begin generating revenue during the third calendar quarter of 1999 and should help increase the potential for achieving the earn-out portion for the TSA transaction, if it closes. If it doesn't close, it will help increase TSA's profitability."
Mr. Willis further stated, "On the OSA-II market development front, meaningful discussions continue with a number of potential major strategic partners in our target markets. In addition, we are continuing to work with our customers to increase their orders of OSA-II's. For example, Speedco Inc., a truck 'quick oil change' operator has advised us that they intend to lease an additional 10 to 15 additional OSA-II units, above their current 13 units, for their new locations, as they open throughout 1999."
The Company has scheduled a conference call for all interested parties to be held on February 16, 1999 at 4:30 P.M., E.S.T. Please contact Maggie DeLutri at the Company at (561) 775-5756 or Heather Walters at The Equity Group at (212) 836-9606, if you wish to participate in the call.
Top Source Technologies, Inc. develops, assembles, and markets sophisticated technologies including the patented MotorCheck(TM) On-Site Analyzer, "an oil analysis mini-lab in a box," and proprietary Overhead Sound Systems.
TOP SOURCE TECHNOLOGIES, INC.
FINANCIAL TABLE
Year Ended
September 30,
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(audited)
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1998 1997
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Total revenue $ 11,207,858 $ 16,984,123
Loss from operations (5,854,026) (2,598,460)
Loss before income taxes (5,470,761) (2,822,057)
State income tax expense (58,801) (482,000)
Loss from continuing operations (5,529,562)(a) (3,304,057)
Income from discontinued operations -- 68,741
Dividends and discounts related to (322,820) --
preferred stock
Net loss available to common
shareholders ($ 5,852,382) ($ 3,235,316)
Basic and diluted net loss per ($ 0.21) ($ 0.12)
common share
Basic and diluted weighted average 28,242,005 28,065,563
common shares outstanding
Fourth Quarter Ended
September 30,
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(unaudited)
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1998 1997
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Total revenue $ 1,925,954 $ 2,747,391
Loss from operations (2,740,405) (1,898,003)
Loss before income taxes (3,058,763) (2,022,549)
State income tax expense (17,559) (84,726)
Loss from continuing operations (3,076,322)(a) (2,465,275)
Income from discontinued operations -- --
Dividends and discounts related to (213,841) --
preferred stock
Net loss available to common
shareholders ($ 3,290,163) ($ 2,465,275)
Basic and diluted net loss per ($ 0.12) ($ 0.09)
common share
Basic and diluted weighted average 28,470,813 27,995,243
common shares outstanding
(a) The 1998 fiscal fourth quarter and year's loss includes a write down of $1,294,045 relating to the first generation OSA units (OSA-I).
Forward-Looking Statements
The statements discussed in this press release relating to the Company's expectations that it will lease between 10 to 15 additional OSA-II units to Speedco Inc., begin shipments of a new audio system to a Detroit OEM and increase TSA profitability, expand OSA-II usage at current customer sites, complete the divestiture of TSA assets by March 31, 1999 and that the OSA-II is a more commercially viable unit, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. The results anticipated by some or all of these forward-looking statements may not occur. Important factors that could cause actual results to differ materially from these forward-looking statements are: unexpected assembly or technical difficulties with the OSA-II, unexpected delays in launching the new Detroit OEM dealership audio program, the inability of the buyer of TSA to obtain financing to close the transaction, and the decision by current OSA customers including Speedco not to expand OSA usage.