October 30, 2007 - SHELTON, Conn. - Baldwin Technology Company, Inc., a global leader in process automation technology for the printing industry, announced today that net sales for its first fiscal quarter ended September 30, 2007 increased by approximately $10.7 million, or 25%, to $53.9 million, from $43.2 million for the first quarter in the prior fiscal year. Currency exchange rates had a favorable impact on sales of approximately $1.7 million in the period.
Net income for the quarter was $1.0 million, or $0.07 per basic and diluted share, compared to $1.3 million, or $0.09 per basic and $0.08 per diluted share, for the same quarter in the prior fiscal year. Included in net income in the current quarter was the impact of a change in German tax law that increased the current period tax provision by $.4 million and reduced EPS by $.02 per share.
Orders for the quarter were $60.9 million, an increase of 33% over the $45.9 million of orders for the first quarter of fiscal year 2007. Backlog was $59.6 million on September 30, 2007, $6.9 million higher than the June 30, 2007 backlog of $52.7 million.
President and Chief Executive Officer Karl Puehringer stated, "We are pleased with the start of our 2008 fiscal year. Sales and operating income were in line with our expectations. The Baldwin Oxy-Dry integration continues to be on schedule and on budget. Activities in the graphic arts market remain good, and we are well-positioned to continue to strengthen our relationships with major customers and expand our business opportunities in emerging countries. Backlog has grown to nearly $64 million through the date of this release.
Gross margins in our legacy operations continue to meet expectations with a strong focus on strategic sourcing and productivity improvements. We are driving these same initiatives to improve the margins at the former Oxy-Dry operations."
John Jordan, Vice President and Chief Financial Officer, said, "The Company is also pleased with achieving improvement in its operating income margins this quarter. Operating expenses as a percentage of sales decreased from 28.1% in the first quarter of fiscal 2007 to 26.1% in the current quarter.
A change in tax law in Germany reduced the value of German deferred tax assets on the balance sheet, which required an additional tax provision in the current quarter. Absent that additional tax provision, our tax rate would have remained approximately the same as the rate in the first quarter of fiscal 2007. In addition, as required, the Company adopted FIN 48 as of July 1, 2007, which caused a one time reduction primarily in the deferred tax asset and shareholders' equity accounts in the balance sheet.
Although working capital decreased during the quarter, it was not in line with our objectives due to the inventory buildup for impending shipments and timing of accounts receivable collections. We maintain our intense focus on driving cash from working capital," concluded Mr. Jordan.
The Company will host a conference call to discuss the financial results and business outlook today, October 30th at 11 a.m. Eastern Time. Call in information is available on the Company's website at http://www.baldwintech.com under the Investor Relations section. Interested investors are encouraged to log onto the website and participate in the call or access the webcast of the call. Participating in the call will be Baldwin President and CEO Karl S. Puehringer and Vice President and CFO John Jordan.
A replay audiotape of the conference call, in its entirety, will be available one hour after the end of the call and will be available until Tuesday, November 6 at 9:59 p.m. Central Time. To hear that replay, call toll free (866) 360-7721 in the U.S. or (203) 369-0173 from outside the U.S. A live and archived webcast will be available on the Internet for 90 days through the Investor Relations section of the Baldwin website at www.baldwintech.com.
In other news, the Company noted that it will hold its Annual Meeting of Stockholders at the Marriott in Shelton, Connecticut on Tuesday, November 13 at 10 a.m.