Filed by Telxon Corporation
Pursuant to Rule 425 under the Securities Act of 1933
And deemed filed pursuant to Rule 14a-12
Of the Securities Exchange Act of 1934
Subject Company:Telxon Corporation
Commission File No.0-11402
TELXON REPORTS SECOND QUARTER FY2001 RESULTS
CINCINNATI, OHIO, NOVEMBER 2, 2000 - - Telxon Corporation (Nasdaq:
TLXN), a world leader in delivering quality, innovative solutions for
mobile information and wireless communications systems, today reported
results for its fiscal 2001 second quarter ended September 30, 2000.
For the quarter ended September 30, 2000, the company reported
revenues of $89.5 million, and a net loss of $19.5 million, or $1.11 per
share (diluted), as compared to revenues of $96.3 million and net income of
$15.0 million, or $.92 per share (diluted), in the year earlier quarter.
For the six months ended September 30, 2000, the company reported
revenues of $175.1 million, and a net loss of $29.7 million, or $1.69 per
share (diluted), as compared to revenues of $184.1 million and a net loss
of $1.7 million, or $.11 per share (diluted), for the same period last
year.
The above financial results contain certain merger related costs
associated with the proposed acquisition of Telxon by Symbol Technologies,
Inc. (NYSE: SBL) of Holtsville, NY, which was announced on July 26, 2000.
Given the pending acquisition, Telxon will not hold a conference call to
discuss its second quarter results.
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 reported above,
this news release may contain forward-looking statements that are
inherently subject to risks and uncertainties which could cause Telxon's
actual results or other future events pertaining to the company to differ
materially from the forward-looking statements. The consummation of the
proposed acquisition of the company by Symbol is subject to approval by
Telxon's stockholders and customary closing conditions. Important factors
affecting Telxon's operations and financial performance include, without
limitation, the company's ability to gain and maintain market acceptance of
its products and the levels of customer acceptance of and demand for those
products, general and industry-specific economic conditions, competitive
pressures 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.
With respect to the proposed acquisition of the company by Symbol,
Telxon stockholders should read the proxy statement/prospectus concerning
the transaction that has been filed with the Securities and Exchange
Commission and mailed to stockholders. The proxy statement/prospectus
contains important information that Telxon stockholders should consider
before making any decision regarding the proposed transaction. Stockholders
can obtain the proxy statement/prospectus, as well as other information
about Symbol and Telxon, without charge, at the SEC's Internet site
(http://www.sec.gov). Copies of the proxy statement/prospectus and the SEC
filings that are incorporated by reference in the proxy
statement/prospectus can also be obtained, without charge, from Symbol and
Telxon.
Symbol and certain other persons named below may be deemed to be
participants in Telxon's solicitation of proxies from its stockholders to
approve the transaction. The participants in such solicitation may include
the directors and executive officers of Telxon as listed in Telxon's Annual
Report on Form 10-K for its fiscal year ended March 31, 2000, as amended,
and the executive officers of Symbol, which, as Symbol has indicated in its
press releases regarding the transaction, are listed in Symbol's proxy
statement for its 2000 annual meeting, which SEC filings can be obtained,
without charge, at the SEC's Internet site (http://www.sec.gov).
To Telxon's knowledge as of the date of this press release: none
of the foregoing participants individually beneficially owns in excess of
5% of Symbol's common shares or 5% of Telxon's common shares; and except as
disclosed above, none of the directors or executive officers of Symbol or
Telxon has any interest, direct or indirect, by security holdings or
otherwise, in Symbol or Telxon.
# # #
For more information:
Alex L. Csiszar
Vice President, Investor and Public Relations
Telxon Corporation
(330) 664-2961
[email protected]
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TELXON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-----------------------------------------------------------
2000 1999 2000 1999
-----------------------------------------------------------
Revenues:
<S> <C> <C> <C> <C>
Product, net $68,066 $76,621 $133,598 $144,536
Customer service, net 21,425 19,674 41,492 39,584
-----------------------------------------------------------
Total net revenues 89,491 96,295 175,090 184,120
Cost of revenues:
Product 59,259 57,428 106,219 108,297
Customer service 13,338 12,078 25,270 24,289
-----------------------------------------------------------
Total cost of revenues 72,597 69,506 131,489 132,586
Gross profit:
Product 8,807 19,193 27,379 36,239
Customer service 8,087 7,596 16,222 15,295
----------------------------------------------------------
Total gross profit 16,894 26,789 43,601 51,534
Operating expenses:
Selling expenses 19,537 18,235 38,297 36,842
Product development and engineering
expenses 6,370 5,992 12,631 13,142
General & administrative expenses 17,172 16,114 33,177 27,356
Transaction costs 1,622 - 1,622 -
----------------------------------------------------------
Total operating expenses 44,701 40,341 85,727 77,340
Loss from operations (27,807) (13,552) (42,126) (25,806)
Interest income 39 159 470 415
Interest expense (1,755) (3,559) (3,424) (6,801)
------------------------------------------------------------
Loss before other non-operating
(expense) income and income taxes (29,523) (16,952) (45,080) (32,192)
Other non-operating (expense) income (24) 32,650 92 32,467
-----------------------------------------------------------
(Loss) income before income taxes (29,547) 15,698 (44,988) 275
(Benefit) provision for income taxes (10,046) 738 (15,296) 2,016
-----------------------------------------------------------
Net (loss) income (19,501) 14,960 (29,692) (1,741)
===========================================================
Net (loss) income per share:
Basic $(1.11) $0.92 $(1.69) $(0.11)
Diluted $(1.11) $0.92 $(1.69) $0.11)
Average number of common shares
outstanding:
Basic 17,530 16,232 17,522 16,194
Diluted 17,530 16,233 17,522 16,194
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TELXON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
SEPTEMBER 30, MARCH 31,
2000 2000
-------------------------------------
(UNAUDITED)
ASSETS
Current assets:
<S> <C> <C>
Cash (including cash equivalents of $4,419 and $6,000) $ 6,027 $ 34,197
Accounts receivable, net of allowances for doubtful
accounts of $10,351 and $7,116 and sales returns
and allowances of $6,657 and $5,255 88,588 70,831
Notes and other accounts receivable 2,384 4,545
Inventories 86,729 81,923
Prepaid expenses and other 30,070 29,615
-------------------------------------
Total current assets
213,798 221,111
Property and equipment, net
55,547 62,067
Investment in marketable securities and related hedge
262,256 321,863
Intangibles and other assets, net
28,318 31,249
-------------------------------------
Total assets $559,919 $636,290
=====================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Capital lease obligations due within one year $ 241 $ 236
Note Payable 19,000 -
Accounts payable 43,183 30,116
Income taxes payable 1,607 11,039
Accrued liabilities 56,868 53,771
-------------------------------------
Total current liabilities 120,899 95,162
Capital lease obligations 246 369
Convertible subordinated notes and debentures 106,913 106,913
Deferred income taxes 79,461 109,519
Other long-term liabilities 1,872 2,500
-------------------------------------
Total liabilities 309,391 314,463
Stockholders' equity:
Preferred stock, $1.00 par value per share; 500
shares authorized, none issued - -
Common stock, $.01 par value per share; 50,000
shares authorized, 17,543
and 17,514 shares issued 175 175
Additional paid-in capital 105,799 105,639
Retained earnings 159,305 188,998
Note related to the purchase of common stock (3,141) -
Unearned compensation relating to restricted stock awards (16) (75)
Accumulated other comprehensive (loss) income:
Foreign currency translation (8,333) (6,009)
Unrealized holding (loss) gain on marketable securities,
net of deferred taxes of ($2,187) and $21,060 (3,261) 33,099
-------------------------------------
Total stockholders' equity 250,528 321,827
-------------------------------------
Commitments and contingencies - -
-------------------------------------
Total liabilities and stockholders' equity $559,919 636,290
=====================================
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