<PAGE> 1
UNITED STATES
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) February 19, 1998
----------------------
DISC, INC.
(Exact name of Registrant as specified in its charter)
California 033-52144 77-0129625
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No)
372 Turquoise Street, Milpitas, California 95035
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 934-7000
--------------
Not Applicable
--------------
(Former name or former address, if changed since last report)
Page 1 of 3
Exhibit Index on Page 3
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ITEM 5. OTHER EVENTS
The information set forth in the Registrant's Press Releases dated
February 19 and 26, 1998 is incorporated herein by reference. Factors affecting
the Company's business plans and competitive environment are discussed in the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31,
1996, and in its Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997, June 30, 1997 and September 30, 1997.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBIT NO. DESCRIPTION
99.1 Press Release dated February 19, 1998.
99.2 Press Release dated February 25, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DISC, INC.
Date: February 26, 1998 By: /s/ Henry Madrid
------------------------------------
Henry Madrid
Chief Financial Officer
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EXHIBIT INDEX
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
99.1 Press Release dated February 19, 1998. 4
99.2 Press Release dated February 25, 1998. 7
<PAGE> 1
John Nesbett - Investor Relations Contact J. Richard Ellis
Lippert/Heilshorn & Associates President & CEO
(212) 838-3777, ext. 121 (408) 934-7000
(E-MAIL: [email protected])
DISC, INC. ANNOUNCES FOURTH QUARTER
AND TWELVE MONTH RESULTS
MILPITAS, CALIFORNIA, FEBRUARY 19, 1998 -- DISC, INC. (NASDAQ Symbols:
DCSR, DCSRW) today announced financial results for the fourth quarter and twelve
months ended December 31, 1997.
For the fourth quarter ended December 31, 1997, net sales increased 4%
to $2,502,000 compared to net sales of $2,406,000 reported for the same quarter
last year. For the fourth quarter of 1997, the Company reported a net loss of
$(575,000), or $(0.17) per share, compared to a net loss of $(682,000), or
$(0.21) per share, for the comparable 1996 quarter.
For the twelve months ended December 31, 1997, net sales increased 12%
to $8,655,000 compared to net sales of $7,761,000 reported for the twelve months
of 1996. Net loss for 1997 was $(2,489,000), or $(0.75) per share, compared to a
net loss of $(3,342,000), or $(1.08) per share, for 1996.
Commenting on the results, J. Richard Ellis, President and Chief
Executive Officer of DISC, Inc. stated, "DISC continues to focus on the
fundamentals of the business in an effort to move the company into
profitability. The revenue for the fourth quarter and for the year both
represent records for the company. These results are beginning to reflect our
focus on, and the investments in sales and marketing to address various vertical
markets where nearline archival of information is critical. During 1997, we
announced several OEM purchase agreements with resellers primarily in the
medical and banking markets where fast access to data and permanence of that
data are important factors."
- more -
<PAGE> 2
"Our customer base in these vertical markets doubled in this past year;
better than 50% of our shipments were generated by new vertical market accounts.
We feel that with these market initiatives, we have begun to lay the foundation
for future products and technologies that are in development at DISC."
"We also saw significant improvement in our margins in 1997 which were
up seven percentage points for the year as the impact of improvements in product
cost and increased volume were realized. Furthermore, we were able to reduce
overall operating expenses by 3% year to year while increasing spending on
product development. We will soon be introducing new products to the market as a
result of these investments and look forward to continued improvements in 1998."
DISC is the industry leader in high capacity automated 5.25-inch and CD optical
storage libraries. DISC markets products ranging in capacity from over 150 to
over 1,450 cartridges in several models, many of which are field upgradeable to
higher capacities. All models share a common architecture and modular design
oriented toward higher performance and reliability. DISC libraries are sold with
system solutions by OEMs, System Integrators, VARs and Distributors in North and
South America, Europe and the Far East.
"Safe Harbor" Statement under the private Securities Litigation Reform Act of
1995: The statements which are not historical facts contained in this release
are forward looking statements that involve risks and uncertainties, including,
but not limited to, product demand and market acceptance risks, the effect of
economic conditions, the impact of competitive products and pricing, product
development, commercialization and technological difficulties, capacity and
supply constraints or difficulties, the results of financing efforts, actual
purchases under agreements, the effect of the Company's accounting policies, and
other risks detailed in the Company's Securities and Exchange Commission
filings.
-table follows-
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DISC, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------------- --------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 2,502,000 $ 2,406,000 $ 8,655,000 $ 7,761,000
------------ ------------ ------------ ------------
Costs and expenses:
Cost of sales 1,962,000 1,908,000 6,704,000 6,549,000
Research and development 400,000 321,000 1,439,000 1,297,000
Marketing and sales 449,000 572,000 1,960,000 2,155,000
General and administrative 236,000 255,000 924,000 984,000
------------ ------------ ------------ ------------
3,047,000 3,056,000 11,027,000 10,985,000
------------ ------------ ------------ ------------
Loss from operations (545,000) (650,000) (2,372,000) (3,224,000)
Interest and other expense (30,000) (32,000) (117,000) (118,000)
Net loss $ (575,000) $ (682,000) $ (2,489,000) $ (3,342,000)
============ ============ ============ ============
Net loss per share $ (.17) $ (.21) $ (.75) $ (1.08)
============ ============ ============ ============
Weighted average common
shares and equivalents 3,334,000 3,179,000 3,308,000 3,106,000
============ ============ ============ ============
</TABLE>
###
<PAGE> 1
John Nesbett - Investor Relations Contact J. Richard Ellis
Lippert/Heilshorn & Associates President & CEO
(212) 838-3777, ext. 121 (408) 934-7000
(E-MAIL: [email protected])
DISC, INC. ANNOUNCES PRIVATE PLACEMENT SELLING
$1,400,000 OF PREFERRED STOCK
MILPITAS, CALIFORNIA, FEBRUARY 25, 1998 - DISC, INC. (NASDAQ Symbols:
DCSR, DCSRW) today reported that the Company completed on February 20, 1998, the
sale of $1,400,000 of preferred stock to the Company's largest investor, MK
Global Ventures. This additional equity enabled the Company to meet the
continued listing requirements of the Nasdaq SmallCap Market which became
effective on February 23, 1998.
"In addition to providing continued liquidity for our shareholders, this
capital infusion provides DISC additional working capital to grow our business"
commented Richard Ellis, President and CEO of DISC, Inc. "This financing
provides additional funding for our new product programs as well as expansion of
our vertical market sales channels. We are pleased with the continued level of
support from MK Global Ventures and the confidence that they place in our
ability to capitalize on the market opportunities."
DISC is the industry leader in high capacity automated 5.25-inch and CD
optical storage libraries. DISC markets products ranging in capacity from 150
to over 1,450 cartridges in several models, many of which are field upgradeable
to higher capacities. All models share a common architecture and modular design
oriented toward high performance and reliability. DISC libraries are sold with
system solutions by OEMs, System Integrators, VARs and Distributors in North
and South America, Europe and the Far East.
"Safe Harbor" Statement under the private Securities Litigation Reform
Act of 1995: The statements which are not historical facts contained in this
release are forward looking statements that involve risks and uncertainties,
including, but not limited to, product demand and market acceptance risks, the
effect of economic conditions, the impact of competitive products and pricing,
product development, commercialization and technological difficulties, capacity
and supply constraints or difficulties, the results of financing efforts, actual
purchases under agreements, the effect of the Company's accounting policies, and
other risks detailed in the Company's Securities and Exchange Commission
filings.
<PAGE> 2
DISC, INC.
PROFORMA BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
2/98 EQUITY DEC. 31, 1997
ASSETS DEC. 31, 1997 INVESTMENT PROFORMA
-------------- -------------- --------------
<S> <C> <C> <C>
Cash $ 436,000 $ 1,400,000 $ 1,836,000
Accounts receivable, net allow for doubtful
accounts of $89,000 1,768,000 -- 1,768,000
Inventories 1,465,000 -- 1,465,000
Prepaids and deposits 73,000 -- 73,000
-------------- -------------- --------------
Total current assets 3,742,000 1,400,000 5,142,000
Property and equipment, net 402,000 -- 402,000
-------------- -------------- --------------
$ 4,144,000 1,400,000 5,544,000
============== ============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 1,332,000 $ -- $ 1,332,000
Borrowings under credit line 1,338,000 -- 1,338,000
Other accrued liabilities 280,000 -- 280,000
Accrued warranty 79,000 -- 79,000
Current portion of capitalized lease obligations 24,000 -- 24,000
-------------- -------------- --------------
Total current liabilities 3,053,000 -- 3,053,000
Leases payable 20,000 -- 20,000
Shareholder' equity:
Convertible Preferred Stock; no par value,
5,000,000 shares authorized; 3,395,304 12,742,000 1,400,000 14,142,000
shares issued and outstanding
Common Stock; no par value, 20,000,000
shares authorized; 3,334,323
shares issued and outstanding 11,053,000 -- 11,053,000
Accumulated deficit (22,724,000) -- (22,724,000)
-------------- -------------- --------------
Total shareholders' equity 1,071,000 1,400,000 2,471,000
-------------- -------------- --------------
$ 4,144,000 $ 1,400,000 $ 5,544,000
============== ============== ==============
</TABLE>
