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EXHIBIT 99
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[TELXON LOGO]
NEWS RELEASE
TELXON ANNOUNCES RESTATEMENT
OF FISCAL 1999 AND 1998 RESULTS OF OPERATIONS
AND DELAY IN FILING FISCAL 2000 FORM 10-K
CINCINNATI, OHIO, June 29, 2000 - - Telxon Corporation (Nasdaq: TLXN),
a world leader in delivering quality, innovative solutions for mobile
information and wireless communications systems, announced today that it will
restate its results of operations for fiscal years 1999 and 1998. As a result of
the restatement and a concurrent review of recent comments received from the
Securities and Exchange Commission ("SEC") on the company's prior filings, the
company was unable to file its fiscal 2000 Annual Report on Form 10-K due today
and will avail itself of the 15-day extension allowed under SEC rules for
meeting the year-end filing requirement.
This restatement relates to an agreement made during the fourth quarter
of fiscal 1998 with a Value-Added Distributor ("VAD") providing the VAD with
rights to return specified goods, and rights to require the company to
repurchase or pay the carrying costs of those goods. Because of this agreement,
$8.1 million in fiscal 1998 fourth quarter revenues from this VAD and $4.9
million of related cost of product revenues more appropriately should have been
recognized on a sell-through basis during fiscal 1999. The related income tax
impacts of $1.3 million will be recorded in the 1999 and 1998 annual fiscal
periods to reflect the income tax consequences of the restatement adjustments
described above.
The overall impact of these adjustments is to decrease fiscal 1998 net
income by $2.0 million and decrease fiscal 1999 net loss by that same amount.
Accordingly, the March 31, 1999 consolidated balance sheet, including
stockholders' equity, will remain unchanged. After undertaking a detailed
review, including confirmations from the company's VADs that no other such
agreements exist, the company is confident that the subject VAD agreement was an
isolated instance.
The delay in the filing of the company's Form 10-K for fiscal 2000 is
necessary to permit the incorporation of the financial statement adjustments
discussed above
TELXON CORPORATION/Ridgewood Corporate Center/1000 Summit Drive/
Cincinnati, Ohio 45150-2788
800.800.8001/Fax 330.664.2240/E-mail: [email protected]/www.telxon.com
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relating to the VAD transaction and to evaluate the effects of the recent
comments issued by the SEC Division of Corporation Finance as part of its
on-going review of various accounting matters in the company's prior SEC
filings. The SEC comments include, but are not limited to, matters relating to
the recognition of revenues from the company's indirect sales channel generally
and the timing of charges which the company recorded during fiscal 1999, 1998
and 1997 for inventory obsolescence, severance and asset impairment. The
company is continuing to cooperate with the SEC and believes that any potential
impact resulting from restatement of these matters would not have a material
impact on the financial position of the company at March 31, 2000.
Telxon Corporation is a leading global designer and manufacturer of
wireless networks for mobile computing solutions and information systems. The
company integrates advanced mobile computing and wireless data communication
technology with a wide array of peripherals, application-specific software and
global customer services for its customers in more than 60 countries around the
world. Telxon is the world leader in the installation of wireless networks
supporting automotive manufacturing, airport logistics operations and in-store
retail information systems. Telxon's global web site address is:
www.telxon.com.
Other than the historical financial information discussed above, this
news release constitutes forward-looking statements that are inherently subject
to risks and uncertainties which could cause Telxon's actual or restated results
or other future events pertaining to the company to differ materially from the
forward-looking statements. The important factors affecting the realization of
those results or the occurrence of those events include, without limitation, the
final outcome of the company's review of accounting matters with its outside
auditors, the completion of the fiscal 2000 audit and Form 10-K filing within
the extension period, including the finalization of the financial statements for
the periods covered or affected by the restatement and accounting review
reported above, as well as general and industry-specific economic conditions,
competitive pressures, the level of customer demand for the company's products
and rapid technological change. Reference should be made to the discussion of
these and other factors affecting Telxon's business and results as included from
time to time in the company's filings with the Securities and Exchange
Commission.
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For more information:
Alex L. Csiszar
VP, Investor and Public Relations
Telxon Corporation
(330) 664-2961
(800) 800-8001
[email protected]
