SIOUX FALLS, S.D.: Sencore has made the first move to buy Wegener, the Duluth, Ga., content distributor, for the equivalent of $6 million. Sencore, a signal processing specialist, signed a non-binding letter of intent to acquire Wegener.
The letter of intent outlines Sencore acquiring all Wegener’s outstanding shares of common stock for cash consideration of $6 million, assuming no other debt, taxes or bills due. Should any such items arise, the acquisition price will be reduced accordingly. The deal price also assumes Wegener has adequate working capital as of the close date of the deal. The terms of the arrangement require Wegener to negotiate exclusively with Sencore for 60 days, and to pay certain termination fees for specific circumstances. Deal slosure is subject to further due diligence.
Wegener recently reported fiscal third-quarter results of revenues that feel by about one-third compared to a year ago. The company posted $2.9 million for the quarter ending May 29, compared to $4.4 million a year ago. Net loss was $883,000, or 7 cents a share, compoared to a net loss of $775,000 or 6 cents a share a year ago. Results included a one-time severance expense of $188,000.
Cash and equivalents were $13,000 on May 29; total assets were $10.9 million. Short- and current long-term debt was $3.3 million; total liabilities were $8.2 million.
Shares of Wegener (NASDAQ: WGNR) were trading mid-morning at 33 cents, where it’s been fluctuating near since the first of the year.
-- Deborah D. McAdams
Previous TVB Wegener coverage:
July 14, 2009: “Wegener’s Fiscal 3Q Revenues Down 34 Percent”
“Our third quarter results were down from prior years but did fall in line with our expectations for the quarter given the economic climate,” said Robert Placek, chairman and CEO of Wegener. “Based on the realities of the market conditions, we made cost reductions in the organization in the third quarter to better align our cost structure with currently achievable revenue levels. We do expect an operating loss in the fourth quarter of fiscal 2009.”
April 14, 2009: “Wegener Breaks Even in Fiscal 2Q09”
“Revenues were almost double the level in the first quarter and we do not anticipate returning to the Q1 revenue level… We expect an operating loss in the third quarter and are focused on controlling costs to see us through these challenging times.”
December 4, 2009: “Wegener Reports Fiscal 4Q”
Wegener posted net earnings of $873,000, or 7 cents a share, on revenues of $5.4 million for the quarter. During the same period a year ago, Wegener logged $142,000, or a penny a share, on revenues of $5.7 million. 4Q revenues included a gain on patent sales totally $894,000.