Ampex (NASDAQ:AMPX)
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From Jun 2019 to Jun 2024
Dutton Associates updates its coverage of Ampex Corporation
(Nasdaq:AMPX) reducing its rating to Neutral. The 12-page report by
Dutton senior analyst Richard W. West, CFA is available at http://www.jmdutton.com/research/AEXCA/index.html,
and from First Call, Bloomberg, Zacks, Reuters, Knobias, and other
leading financial portals.
The overriding events impacting Ampex’s market
valuation relate to the negotiations between Hillside Capital
Incorporated (Hillside) and Ampex resulting from the November extension
of the standstill agreement and then the January termination of the
extended standstill agreement. Now that the extension has been
terminated, Hillside has reasserted its allegation, previously disputed
by Ampex, that Ampex has breached its obligations under the
Hillside/Ampex-Sherborne Agreement, dated December 1994. The current
status is that if Ampex fails to pay $2.7 million of principal and
interest payments currently due, or to cure the alleged breach, Hillside
will be entitled to accelerate repayment of all outstanding Hillside
Notes and accrued interest, which totaled $48.7 million at December 31,
2007. Any acceleration by Hillside would allow holders of the $6.7
million Senior Notes to accelerate the maturity of those obligations.
The acceleration of these debts could require Ampex to seek protection
under federal bankruptcy laws. The situation between Hillside and Ampex
is unresolved. Due to the real possibility of federal bankruptcy, we are
reluctantly lowering our rating to Neutral. Ampex reported 3Q results
where on an operating basis, 3Q was positive with increased revenue and
increased operating profits from the recorder segment. Ampex revenue
from running royalties was $9.8 million for the 2007 nine-months
compared with $7.4 million for the nine-months ended September 2006. The
increase in running royalties on camcorders for 2007 resulted from
royalties paid by Sony Corporation on their digital camcorder sales
subject to an agreement, which commenced in April 2006.
About Dutton Associates
Dutton Associates is one of the largest independent investment research
firms in the U.S. Its 30 analysts, primarily CFAs, have expertise in
many industries. Dutton Associates provides continuing analyst coverage
of over 140 enrolled companies, and its institutional-quality research,
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The cost of enrolment in our one-year continuing research program is US
$35,000 prepaid for 4 Research Reports, typically published quarterly,
and requisite Research Notes. Dutton Associates received $95,000 from
the Company for 10 Research Reports with coverage commencing on
10/12/2004. We do not accept payment of our fees in company stock. Our
principals and analysts are prohibited from owning or trading in
securities of covered companies. The views expressed in this research
report accurately reflect the analyst's personal views about the subject
securities or issuer. Neither the analyst's compensation nor the
compensation received by us is in any way related to the specific
ratings or views contained in this research report or note. Please read
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