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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): June 23, 1998
GUNTHER INTERNATIONAL, LTD.
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(Exact name of Registrant as specified in its charter)
DELAWARE 000-22994 51-0223195
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
ONE WINNENDEN, NORWICH, CONNECTICUT 06360
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(Address of principal executive offices) (Zip Code)
(860) 823-1427
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
This is Page 1 of 5 pages. The Exhibit Index is on Page 4.
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Item 5. Other Events.
On June 23, 1998, the registrant issued a press release announcing that
it does not expect to release its final results for the fourth quarter and the
full fiscal year ended March 31, 1998 until later in July 1998. A copy of the
press release is attached hereto as an exhibit. During the course of the
year-end audit, the Company's auditors, Arthur Andersen LLP, identified errors
in the accumulation of contract costs and certain items of expense that were not
properly accounted for. The Company, with the assistance of its auditors, is
continuing to review the nature and extent of these matters, as well as the
effect these matters may have on the Company's financial results. Based on the
information that is available at this time, the Company currently expects to
report a net loss for the fiscal year ended March 31, 1998 of approximately $2.4
to $3.0 million. The Company also expects to restate its results for each of the
first three quarters of fiscal 1998. Previously issued financial statements for
the interim periods of fiscal 1998 should not be relied upon.
The net losses referred to above are expected to result in a violation
of certain financial covenants contained in the Company's senior credit
facility. The Company has informed representatives of its senior lender about
these matters and intends to meet with them to discuss a satisfactory resolution
of the situation. If a satisfactory resolution is not reached, the Company may
suffer an event of default under its senior credit facility and the Company's
ability to continue to borrow thereunder may be impaired.
The Company is moving forward at an aggressive pace to definitively
announce its financial results as quickly as possible. The Company continues to
maintain a large installed base of customers using its products and believes
that its products continue to be well received in the market place. The Company
expects to have a record backlog of sales under contract in excess of $5 million
as of June 30, 1998.
The Company's expectations are preliminary and are subject to the
completion of its year-end audit. The estimated amount of loss, anticipated
release of final results and the potential consequences of these matters,
including without limitation the resolution of expected violations under the
Company's senior credit facility discussed in this report constitute
forward-looking statements, and the Company's actual results could differ from
those discussed above.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Exhibit
99 Press Release of Gunther International, Ltd.
Dated June 23, 1998
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SIGNATURES
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.
GUNTHER INTERNATIONAL, LTD.
a Delaware corporation
Date: June 23, 1998 By: /s/ Frederick W. Kolling, III
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Name: Frederick W. Kolling, III
Title: Vice President, Chief Financial
Officer and Treasurer
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EXHIBIT INDEX
Exhibit No Description Page No.
99 Press Release of Gunther International, Ltd. 5
Dated June 23, 1998.
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Exhibit 99
GUNTHER ANNOUNCES DELAY IN REPORTING
FOURTH QUARTER AND YEAR-END FINANCIAL RESULTS
NORWICH, CT, June 23 -- Gunther International, Ltd. (NASDAQ: SORT)
today announced that it does not expect to release its final results for the
fourth quarter and the full fiscal year ended March 31, 1998 until later in July
1998. During the course of the year-end audit, the Company's auditors, Arthur
Andersen LLP, identified errors in the accumulation of contract costs and
certain items of expense that were not properly accounted for. The Company, with
the assistance of its auditors, is continuing to review the nature and extent of
these matters, as well as the effect these matters may have on the Company's
financial results. Based on the information that is available at this time, the
Company currently expects to report a net loss for the fiscal year ended March
31, 1998 of approximately $2.4 to $3.0 million. The Company also expects to
restate its results for each of the first three quarters of fiscal 1998.
Previously issued financial statements for the interim periods of fiscal 1998
should not be relied upon.
The net losses referred to above are expected to result in a violation
of certain financial covenants contained in the Company's senior credit
facility. The Company has informed representatives of its senior lender about
these matters and intends to meet with them to discuss a satisfactory resolution
of the situation. If a satisfactory resolution is not reached, the Company may
suffer an event of default under its senior credit facility and the Company's
ability to continue to borrow thereunder may be impaired.
The Company is moving forward at an aggressive pace to definitively
announce its financial results as quickly as possible. The Company continues to
maintain a large installed base of customers using its products and believes
that its products continue to be well received in the market place. The Company
expects to have a record backlog of sales under contract in excess of $5 million
as of June 30, 1998.
The Company's expectations are preliminary and are subject to the
completion of its year-end audit. The estimated amount of loss, anticipated
release of final results and the potential consequences of these matters,
including without limitation the resolution of expected violations under the
Company's senior credit facility discussed in this press release constitute
forward-looking statements, and the Company's actual results could differ from
those discussed above.
Gunther International, Ltd. is a leading manufacturer of intelligent
document finishing systems and ink jet printing solutions.
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