SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): October 7, 1998
Commission File Number: 0-17020
Larson Davis Incorporated
(Exact Name of Registrant as Specified in its Charter)
Nevada 87-0429944
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1681 West 820 North
Provo, Utah 84601
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(801) 375-0177
(Former name, former address, and formal fiscal year, if changed since
last report)
ITEM 5. OTHER EVENTS
Larson Davis Incorporated issued the following press release on October 7,
1998.
Provo, UT, October 7, 1998 - LarsonoDavis Incorporated (NASDAQ symbol
"LDII") announced the termination of its distribution Agreement with SAES
Getters S.p.A. for its TOF 2000 product. The Agreement was originally entered
into in October 1995 upon the purchase of Sensar by LarsonoDavis. The Agreement
required that SAES purchase a minimum number of units per year, which SAES has
not met since inception. This product is used primarily to measure impurities
in gases used in the semiconductor manufacturing process.
Larson Davis has been seeking alternative distributors for this product but
to date has been unsuccessful for several reasons, including the aggressive
downturn in the semiconductor market. The Company has therefore attempted to
market the sale of the product line as a whole. The Company itself cannot
viably support a direct selling capability for a single product into this market
given its current limitations. To date, the Company has not received any firm
expressions of interest in the technology.
The Company will take a charge in the third quarter of approximately $3.7
million principally representing the writeoff of the intangible assets and
surplus inventory associated with this technology. This charge will not impact
the Company's cash position.
The Company set itself the goal of reducing its run rate of losses for the
third quarter as compared to its second quarter performance with the ultimate
goal of profitability by year-end. This required the Company to achieve
reasonable market penetration in the third quarter from its new Jaguar and SFC
technologies and for the Company's acoustics business to continue on its
turnaround path. Based on initial estimates, the Company will experience an
improvement in its quarter on quarter loss rate, although not to the extent
originally envisioned. The acoustics business has had a very satisfactory
performance and will meet all of the objectives set for it in the quarter. The
Company now anticipates a loss of approximately $600,000 at the operating level
excluding the one-time charge to earnings related to the TOF 2000 outlined
above.
Sales of the Jaguar and SFC product have been lower than anticipated due to
a number of factors, including the lack of a significant partner to assist the
Company in its distribution plans, evolving customer needs towards systems
solutions and not stand alone products, and the decline in the Company's stock
price, which has caused unanticipated concern from potential customers. While
the Company continues to anticipate steady improvement in its acoustics
business, meeting its short-term goals will require increased sales of the
Jaguar and SFC products of which there can be no assurance.
During the quarter, the Company has received various inquiries from several
parties to explore the possible purchase of certain technologies owned by
Larson Davis. The Company has now begun exploring these possibilities as an
alternative to continuing to develop target markets on its own.
The Company has recently received notification from Nasdaq that it no
longer meets its listing requirement as a result of the depressed price of the
Company's stock. The Company is currently exploring alternatives, which may
allow it to retain its listing. The Company has a minimum of 90 days to rectify
this situation.
This press release contains certain forward-looking statements that are
based on information currently available to the Company and certain assumptions
made by management. For a discussion of the contingencies and uncertainties to
which the information concerning future events is subject, please refer to
LarsonoDavis' report on Form 10-K for December 31, 1997, and other SEC reports.
Larson Davis Incorporated, headquartered in Provo, Utah, develops,
manufactures, and markets, ultra-sensitive measuring instrumentation equipment
and software for the chemical and acoustics markets. Its customers are major
industrial companies.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange of 1934, as amended, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: October 7, 1998 LARSON DAVIS INCORPORATED
By /s/ Andrew C. Bebbington
Andrew C. Bebbington, President
(Chief Executive Officer and
Principal Financial and
Accounting Officer)
