EXHIBIT A
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FOR IMMEDIATE RELEASE
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DISPLAY TECHNOLOGIES, INC.
Orlando, Florida, September 29, 2000 - Display Technologies, Inc.
(Nasdaq: DTEK) announced today that its Board of Directors has engaged Raymond
James & Associates, Inc. to help evaluate strategic alternatives that may be
available to the Company to maximize shareholder value. These alternatives may
include a sale of all or portions of the Company to, or a merger with, various
third parties. J. William Brandner, President and CEO, has committed to devote
himself to obtain the best possible outcome of this process.
The Company also reported that it has filed a Form 12b-25 with the
Securities and Exchange Commission to extend the due date of its Form 10-K
filing for the year ended June 30, 2000. The extended filing deadline will be
October 13, 2000. This extension is necessary as the audit of the Company's
year-end results is not yet complete. The Company did announce that year-end
adjustments to the carrying values of the Company's inventories and accounts
receivables will likely cause earnings to be reported by the Company for the
year ended June 30, 2000 to be at a break-even level or a slight loss.
Accordingly, the Company will be filing amended Form 10-Q's for the first,
second and third quarters of fiscal year 2000 to reflect the adjusted inventory
values.
The inventory adjustments included adjustments at a subsidiary company
for a one-time write-down of approximately $2.0 million in the carrying value of
inventory. The adjustment related primarily to errors in work-in-process
reporting from a new ERP (Enterprise Resource Planning) system that was
installed in September 1999. The new ERP system was designed to provide detailed
operational information to all departments within the organization in order to
provide for a more efficient production flow, increased abilities for capacity
planning, improved customer support, greater overall profitability and support
for increased growth. The errors, which caused inventory carrying values to be
overstated, had been occurring since the implementation of the new system but
went undetected until year-end. The Company believes that the causes of the
errors have been identified and corrected to prevent reoccurrences of the
problem in future periods.
The accounts receivables write-downs, which amounted to approximately
$800,000, occurred principally as a result of two large receivables for LED
displays sold to start-up businesses which failed. In both cases, the displays
have been repossessed, and the Company expects to recover full value through new
sales to third parties and through taking possession of collateral pledged in
the original sales transactions.
The Company further announced that it had been unable to secure
financing in a timely manner for approximately $2.7 million in LED display sales
to AmeriVision Outdoor, Inc. (in which the Company holds a preferred stock
position). The Company recently secured $1.8 million of the $2.7 million and
continues to be optimistic that specific project financing can be secured for
future AmeriVision installations, but has suspended installations pending
procurement of financing for specific projects. AmeriVision is currently
operating nine signs, including its most recent installation at the entrance to
the Holland Tunnel in New York City. Advertising revenues on most of the signs
operated by AmeriVision have been below expectations due to difficulties
encountered in securing national advertisers on a limited network of displays.
However, AmeriVision continues to be a leader in the emerging LED billboard
industry and, to the Company's knowledge, is currently operating more LED
billboards than any of its competitors.
The delays in securing financing for AmeriVision, combined with the
inventory and receivables write- downs, have made it necessary for the Company
to negotiate an interim agreement with its bank for a $3.5 million overadvance
through October 31, 2000, at which time the Company's credit line, including the
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overadvance, will become due. The Company expects that by the end of this
period, it will have made progress in collecting past due accounts receivables
and presently is in discussions with its bank to extend the overadvance period.
The Company's current backlog is approximately $30,600,000, which is up
from $21,800,000 at June 30, 2000. The lower backlog at the beginning of fiscal
2001 resulted from a temporary slow-down in orders during the end of last fiscal
year. As a result, reported sales during the first quarter of fiscal 2001 are
expected to be down 15% or more from the same period of fiscal 2000.
Consequently, the Company is anticipating reporting a net loss during the first
quarter of fiscal 2001. However, the Company believes that the increased current
backlog going into the second quarter indicates that the slow-down in orders was
temporary.
In addition to the engagement of Raymond James & Associates to pursue
strategic alternatives, the Company is in the process of implementing various
operational changes designed to improve operating results in future periods.
These changes include personnel reductions, elimination of non-essential
expenditures, management and executive compensation freezes, a more detailed
review of customer credit decisions at the corporate level and the suspension of
acquisition activities. The Company will continue to evaluate its performance to
identify additional areas of cost savings that may be available.
Display Technologies, Inc., through its subsidiaries, designs,
manufactures, installs and services hi- tech electronic computer driven video
displays, message centers, scoreboards and business identity signs, and also
manufactures a line of compressed air filter products. AmeriVision Outdoor, Inc.
operates a network of electronic LED billboards.
CERTAIN MATTERS ADDRESSED IN THIS RELEASE CONSTITUTE "FORWARD-LOOKING
STATEMENTS." SUCH FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A VARIETY OF RISKS
AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO BE MATERIALLY DIFFERENT
FROM THOSE ANTICIPATED BY THE COMPANY'S MANAGEMENT. THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 PROVIDES CERTAIN "SAFE HARBOR" PROVISIONS FOR
FORWARD-LOOKING STATEMENTS. ALL FORWARD-LOOKING STATEMENTS MADE IN THIS RELEASE
ARE MADE PURSUANT TO SUCH ACT. FOR MORE INFORMATION ON THE POTENTIAL FACTORS
WHICH COULD AFFECT THE COMPANY'S FINANCIAL RESULTS, REFERENCE SHOULD BE MADE TO
THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 1999.
