NUR Macroprinters Reports Q3 Results: Revenues Up 16%
Press release from the issuing company
LOD, Israel--Oct. 27, 2004-- NUR Macroprinters, a leading supplier of wide-format inkjet production printing systems, today reported its unaudited financial results for the third quarter ended September 30, 2004.
The Company also reported that it expects to announce the general release of its new NUR Expedio wide-format UV inkjet production printers during the forth quarter of 2004. The Company expects to recognize meaningful revenues from this new product starting during the fourth quarter, which will lead to increased revenues and improvement in gross margins.
Revenues for the third quarter of 2004 were $19.9 million, a 16% increase compared to $17.1 million reported in the third quarter of 2003 and a 3% decrease compared to $20.5 million reported in the prior quarter. The year over year increase is mostly attributed to increased Tempo and Fresco II sales in the USA.
Operating income in the third quarter of 2004 was $10,000 and net loss was ($798,000) or ($0.03) per diluted share. Operating loss and net loss for the third quarter of 2003 (on a non-GAAP basis, which excludes a write-off of inventory) was ($328,000) and ($948,000) or ($0.05) per basic share, respectively. Operating profit for the second quarter of 2004 was $1.2 million and the net profit was $233,000 or $0.01 per diluted share. We provided this non-GAAP measure for the third quarter of 2003, to enhance the user's overall understanding of our historical financial performance and to make period to period comparisons more meaningful. Specifically, we believe this non-GAAP measure of net income (loss) provides useful information to both management and investors by excluding certain non-recurring expenses and write-off amounts included in our third quarter of 2003 results. Figures on a GAAP basis for the third quarter of 2003 are available in the tables below.
Revenues for the nine months ended September 30, 2004 were $58.9 million, a 24% increase compared with $47.3 million reported for the same period in the prior year. Operating income for the first nine months of 2004 was $1.5 million and net loss was ($1.5) million or ($0.07) per basic share, compared to results (on a non-GAAP basis) of an operating loss of ($2.5) million and a net loss of ($4.1) million or ($0.24) per basic share for the same period in the prior year.
For the full year of 2004, the Company continues to expect to record revenues of $80-82 million. However, it has revised its projections for a lower gross margin which will lead to a net loss for the full year of 2004 of ($0.7) to ($1.0) million, or ($0.03-0.04) cents per share. The lower gross margin is due to market conditions and lower prices for our printers.
For the full year of 2005, the Company expects to record revenues of $91-93 million. Gross margins are expected to be 37-39% and net profit for the full year 2005 is expected to be $3-5 million.
The Company also reported that Mr. Nachum Korman, President of NUR America Inc., the Company's U.S. subsidiary, decided to step down in order to pursue other business opportunities. The Company is actively seeking for a suitable replacement. David Amir, CEO, will serve as acting President until this position is filled.
Based on the third quarter results, the Company does not meet certain of the financial covenants set forth in its loan agreements with banks. The Company is currently in the process of obtaining waivers from the banks for the above-mentioned non-compliance. Based on preliminary discussions with the banks, the Company believes that such waivers will be obtained. Should the waiver not be obtained, the Company's long-term debt of $27.6 million will be reclassified as short term debt, resulting in a short term debt of $42.7 million and not as presented in this release.
David Seligman, Chief Financial Officer of NUR Macroprinters, commented, "During the third quarter, we faced some pricing pressure in our printer markets as our main competitor reduced prices by up to 40%. In spite of this, we still managed to meet our targets in terms of number of printers but with prices below expectations. This caused a slight reduction in our top line, and our gross margins declined from 40% to 34%. As a result, we are reporting a net loss for the quarter. As we are about to launch our new product line, the NUR Expedio we expect revenues to increase. Our efforts to increase production efficiency and reduce cost of goods are starting to bear fruit and taking this into account as well as the higher margins for the NUR Expedio we expect gross margins to improve in the coming quarter. We believe that we will return to profitability in the fourth quarter of 2004."
David Amir, President and CEO, added, "During the last quarter, NUR completed the development of the new Expedio 5 meter printer, and it is expected to be released very soon. We believe that our early release is a testament to the hard work and effort our R&D department has put into the product and we applaud them for remaining ahead of schedule. Over the last year, we have seeded some exciting developments and we expect to bring new and exciting offerings to the market already by early 2005. We believe that our product development together with our response to the new market conditions, allows us to remain on track in our long term plan to expand our addressable market and bring increased value to our shareholders."
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