PrimeSource Reports Lower Earnings, Xeikon Partnership Not Meeting Performance Levels
Wednesday, May 09, 2001
Pennsauken, NJ (April 26, 2001)…PrimeSource Corporation (Nasdaq NM: PSRC), the leading supplier and digital workflow integrator to the nation’s fourth largest industry---printing and publishing---today announced results for the first quarter of 2001. Sales were $129.4 million compared to $141.5 million for the first quarter of 2000. Net income for the quarter was $0.78 million, or $.12 per diluted share, compared to $1.36 million, or $.21 per diluted share, for last year. Commenting on these results, James F. Mullan, President and CEO, said, “We are disappointed with our first-quarter results. The economic slowdown that we experienced in the latter part of 2000 continued into the first quarter. It impacted capital goods sales in all categories---prepress electronics, traditional equipment, pre-owned presses and digital presses. Traditional film sales had a decline beyond the effects of the general economic softness, which reflects the continuation of the printing industry’s movement to digital technology.” Mr. Mullan continued, “Canopy, our joint venture with Xeikon, did not meet the performance levels required by our investment. We will continue to improve the operations of this business in line with meeting our objectives.” Mr. Mullan concluded, “At this point, we have a concern with the continued softness of the economy and, therefore, have begun to review all of our operations to assure that our cost structure properly reflects the current level of business. We anticipate that our performance will begin to strengthen when the overall economy improves.” PrimeSource provides more than 200,000 line items from 500 manufacturers to over 20,000 customers from locations throughout the United States. In 2000, PrimeSource and Xeikon formed a joint venture company, known as Canopy, LLC, which sells and services digital printing systems.