InFocus Q1 Sales Sink On Lower Projector Shipments

InFocus sales and earnings in the first quarter 2009 were hit hard by a decrease in projector unit shipments.

The company's poor financial results came as two different companies are trying to acquire InFocus.

The troubled projector company Monday reported a net loss of $8.1 million, on revenues of $44.4 million for the first quarter ended March 31, 2009, compared to a net loss of $1.8 million and revenues of $61 million in the first quarter of 2008.

Projector unit shipments totaled roughly 60,000 in the first quarter, a 5 percent drop compared to the fourth quarter of 2008, and a 13 percent decline compared to the first quarter of 2008.

Revenue in the Americas fell 1 percent, while units shipped increased by 6 percent compared to the fourth quarter of 2008. In Europe, revenue and unit shipments decreased by 37 percent and 25 percent, respectively.

On March 22, InFocus said it received an unsolicited acquisition offer from an unnamed source, just nine days after it entered into a merger agreement with Image Holdings Corp.

InFocus said in a statement at the time that it notified IHC of the unsolicited proposal and "intends to enter into discussions with the person who submitted the unsolicited proposal and may furnish due diligence information to that person."

The Wilsonville, Ore.-based company would not disclose the terms or person connected to the alternative bid, except when it was legally required to do so.

On April 13, the company's first suitor, Image Holdings, offered $39 million to acquire InFocus in an all-cash deal. The offer represented a 36 percent premium over the April 9 closing price of $0.70 per share, the last trading day prior to the agreement, and a 90 percent premium over the last 30-day average closing price of $0.50 per share. The acquisition is subject to the tender of a minimum of 65 percent of InFocus' outstanding shares. The companies said the deal is expected to close in the second quarter.

In light of the unsolicited offer, InFocus said in a statement that its board of directors was still in favor of the IHC merger and that it "continues to unanimously recommend that InFocus shareholders accept and tender their shares."

Although the IHC offer represented a premium over its current stock price, disgruntled shareholders subsequently filed a suit against the company. A Pennsylvania legal firm representing the shareholders said in a press release that it was investigating "possible breaches of fiduciary duty and other violations of state law related to the InFocus board's approval of the proposed merger."

"The transaction appears to be unfair, in part, given that InFocus stock was trading at more than $1.40 a share as recently as September 2008, and that the merger agreement provides that InFocus would be required to pay Image Holdings a termination fee of $1.2 million and reimburse expenses up to $750,000," the law firm said in the statement.

In Monday morning trading, InFocus stock fell 3.6 percent to 94 cents.

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