NUR Reports First Quarter Results, Operating Expenses Up 64%
Press release from the issuing company
Lod, Israel; May 10, 2001 - NUR Macroprinters Ltd. (NASDAQ: NURM), a world-leading manufacturer of wide and superwide format digital printing systems and consumables, today announced the Company`s first quarter 2001 financial results.
Revenues for the first quarter of 2001 increased 47% to $31.4 million, as compared with $21.5 million for the same quarter last year. Pro forma (1) gross profit increased 33% to $13.0 million, as compared with $9.8 million for the comparable period last year. Pro forma operating expenses increased 64% to $12.0 million in the first quarter of 2001 from $6.9 million in the first quarter of 2000. The Company concluded the first quarter of 2001 with break-even results, with a pro forma gain/loss of $0 million, as compared with a net income of $2.5 million for the comparable period last year. Pro forma earnings per share were $0 per share on a fully diluted basis, as compared with $0.18 per share for the comparable period last year. (The first quarter of 2001 results include intangible amortization of $0.7 million and interest expenses of approximately $0.6 million, both related to the Salsa Digital acquisition).
The pro forma financial results presented above exclude costs of $2.5 million related to the Company`s previously announced restructuring and one-time inventory write-offs of approximately $4 million. The Company associates the inventory write offs with more efficient product rationalization.
President and CEO Erez Shachar of NUR Macroprinters commented, "The current economic slowdown in the U.S. market has adversely affected our first quarter results. Our first quarter revenue growth of 47% was lower than the growth we had expected, the shortfall coming mainly from the North American market, and as a result our bottom line was hurt substantially."
"In response, we have undertaken a strategic initiative to better position the Company for future growth and to ensure profitability in the current uncertain business environment. We have already started to take proactive steps by implementing a series of cost saving measures, which will in effect streamline our operations and cut costs worldwide."
"We remain confident of the substantial opportunities that digital technologies deliver as replacements for wide format traditional printing methods, as witnessed by the strong demand for the newly announced NUR Fresco 3200 and for our cost-effective NUR Salsa Ultima product models, which makes us confident for the long-term. We also remain confident in NUR Macroprinters` leadership position in the digital printing marketplace."
Results on an as-reported basis
On an as-reported basis, revenue for the first quarter of 2001 increased 47% to $31.4 million, as compared with $21.5 million for the same quarter last year. Gross profit decreased 8% to $9.0 million as compared with $9.8 million for the comparable period last year. After including restructuring costs of $2.5 million and one-time inventory write-offs of approximately $4 million, the Company`s as-reported results for the first quarter of 2001 were a net loss of $6.5 million, or a basic and diluted loss of $0.45 per share, as compared with earnings of $0.18 per share for the comparable period last year on a fully diluted basis.
NUR acquires remaining 50 percent of Stillachem S.A. operation
NUR Macroprinters recently acquired ownership of the remaining 50% of its Stillachem S.A. ink manufacturing operations from Indris International N.V. Terms of the acquisition are not disclosed. Since the consistency, quality and breadth of consumables available are so important to both the performance of superwide and wide format digital printers and to customers` satisfaction, NUR has invested directly in building the consumables side of its business as an asset it can offer its customers.
NUR is also consolidating and streamlining its ink development operations. The Company`s ink R&D operations (now located in Israel, Belgium and San Antonio, TX) will be consolidated into a single facility at its wholly owned subsidiary, Stillachem, in Charleroi, Belgium.
Strategic initiative affects operational efficiencies worldwide
As announced on May 2, 2001, the Company has already undertaken the first steps in its overall plan to improve operational efficiency with the consolidation of its U.S. operations into a single facility in San Antonio, Texas. Today, both NUR America and NUR Engineering USA are operating side by side, sharing administrative and other resources.
In addition, the Company has appointed Rick Clarke, a seasoned executive with strengths in sales, marketing and engineering to lead its reorganized NUR America operation as President. Clarke, who was formerly Executive Vice President of Salsa Digital, Ltd., replaces Shlomo Sagiv at NUR America.
In addition, NUR is consolidating administrative and operational resources at its NUR Europe and NUR Media Solutions subsidiaries, both located in Louvaine-la-Neuve, Belgium.
The above mentioned cost-cutting measures and consolidation of facilities and operations has resulted in some staff reductions at various locations, primarily at NUR America and NUR Macroprinters` corporate headquarters in Lod, Israel. Approximately 70 staff positions have been eliminated worldwide, representing approximately 14% of the total workforce.
"During the first quarter of 2001, we have been able to reduce SG&A expenses to $8.2 million as compared with $10.3 million in the fourth quarter of 2000. The strategic cost-saving and consolidation initiative we have underway is expected to result in additional savings to the Company of approximately $4 million over the next twelve months," says Hilel Kremer, CFO and VP Finance at NUR Macroprinters.
He adds, "In addition to cutting costs within the organization, we are likewise focused on fortifying the Company`s global infrastructure in order to secure our leadership position in the market, provide superior service to our customers and strengthen our sales efforts in the North American market in particular."
"We remain confident that our strategy of taking well planned actions now - making this series of proactive, appropriate changes - will serve us well during the coming months," adds Mr. Shachar.
(1) The pro forma results for the first quarter of 2001 exclude restructuring costs of $2.5 million and one-time inventory write-offs of approximately $4 million.
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