Presstek Reports 2Q Earnings, Sales to Heidelberg Down Again
Friday, July 27, 2001
HUDSON, N.H., July 26 - Presstek, Inc, a leading provider of direct digital imaging technology, today announced financial results for the second quarter ended June 30, 2001. Second Quarter and Six Month Results Presstek's revenues for the second quarter of 2001 increased 28% to $27.1 million from $21.2 million in the same period a year ago. Net income for the second quarter of 2001 was $105,000, or breakeven, compared to $568,000, or $.02 per diluted share, for the second quarter of 2000. Revenues for the six months ended June 30, 2001 rose 31% to $52.9 million from $40.3 million for the first half of 2000. Presstek reported net income of $1.1 million for the first six months of 2001, or $.03 per diluted share, compared to $959,000, or $.03 per diluted share, for the same period last year. Revenues for the second quarter of 2001 consisted of product sales of $ 24.9 million and $2.2 million of royalties and fees from licensees, compared with product sales of $18.4 million and $2.8 million of royalties and fees from licensees in the second quarter of 2000. Plate media revenues for second quarter 2001 were $11.1 million, compared to $10.7 million in the second quarter of 2000. Revenues from equipment sales to Heidelberg, including royalties, for the second quarter of 2001 were $6.8 million, compared to $8.8 million for the same period in 2000. Total Heidelberg revenues for second quarter 2001 were $12.4 million, compared to $13.0 million for the second quarter of 2000. Results for the second quarter of 2001 also included $2.8 million of losses at Presstek's Lasertel subsidiary, $1.9 million of which was recorded as cost of sales and $900,000 as operating expenses. Losses at Lasertel for the first six months of 2001 total $5.6 million. Lasertel did not record any material revenues during the first half of 2001. Comments on the Second Quarter Commenting on the second quarter results, Presstek's Chief Financial Officer Neil Rossen said, "The reduction in profitability in the second quarter of 2001 resulted principally from the continued Lasertel expenses, lower plate revenues, and increased legal expenses associated with our patent litigation. Elevated inventory and accounts receivable levels at the end of the quarter led to further use of our credit lines. The inventory increase reflected previously reported production issues, while receivables represented the significant number of shipments that were compressed into the final month of the quarter.'' Rossen continued, "We are making progress in addressing the production issues affecting our new products. While, as previously reported, our production of Dimension platesetters for the quarter reached 27 units, instead of the 40 units originally planned, we did build positive momentum and were able to meet our goal of five Dimension platesetters per week by the end of the second quarter.'' 2001 Revenue and Earnings Outlook Update Commenting on the company's outlook for the second half of the year, President and Chief Executive Officer Robert Hallman said, "Although installations of DI presses and thermal platesetters continue to grow, the slowdown in the economy has resulted in a decreased demand for printed material and plate usage. We expect plate revenues to grow slowly over the remaining quarters of this year. On a more positive note, the market for productivity enhancing imaging products in our industry is continuing to grow. Presstek is meeting this demand by bringing an expanded product line to market with new partners, some of which have limited digital offset production experience. While we believe there are long-term benefits from this trend, in the short-term this presents unusually high levels of service and production challenges, and frequently produces unanticipated expenses.'' Hallman continued, "With regard to Lasertel, we are moving forward with several previously announced initiatives designed to align costs with that company's current activity level, including ongoing efforts to improve yields and eliminate waste on the laser diodes supplied to Presstek.'' Hallman concluded, "The uncertain economic environment currently reflected in weakness in the consumables market, together with the risks inherent in producing an expanded product line with new partners, and Lasertel expenditures, combine to limit our visibility over the remainder of 2001. Although we believe there is potential for quarter on quarter revenue growth over the rest of the year, we are forecasting flat revenues in the third quarter of 2001, and approximately $110 million in revenues for the fiscal year. While we are reviewing a number of cost reduction measures, continuing elevated legal expenses and marketing costs associated with Print 2001 are likely to limit net income to break even for the third quarter.''