Presstek Posts Q2 Loss on Higher Sales
Friday, July 27, 2007
Press release from the issuing companyHUDSON, N.H., July 26 -- Presstek, Inc., the leading manufacturer and marketer of digital offset printing business solutions, today reported results for the second quarter of 2007. Consolidated revenue from continuing operations for the second quarter of 2007 was $68.8 million, up 5.5% from $65.2 million in the first quarter, on continued strength in digital products and consumables, and compares to $70.9 million in the same quarter last year. Equipment revenue reached $28.2 million, up 12.4% over last quarter and 3.2% over the same quarter last year. Including one-time expenses and special charges of $5.8 million, the net loss from continuing operations for the second quarter was $4.9 million, or $0.13 loss per share. This compares to net income of $2.6 million, or $0.07 per share, in the same quarter last year and a loss of $866,000, or $0.03 loss per share, in the first quarter.
Revenue from the company's growth portfolio, which includes the 34DI and 52DI digital offset solutions and the Presstek family of chemistry-free computer-to-plate (CTP) solutions, grew 21% year-over-year to more than 53% of total revenue.
Presstek's President and Chief Executive Officer, Jeff Jacobson said, "Although it's clear we have a great deal of work ahead of us, after almost three months on the job, I am more excited today about our prospects for success than I was on my first day. In Q2, the momentum in our growth portfolio continued, and now makes up more than half of our revenue. It is this trend, along with our increased focus on operational excellence, which gives me the greatest optimism for our future growth and profitability."
Presstek's Lasertel operation reported operating income in Q2 of $211,000, delivering its first profitable quarter. External sales were $2.2 million for the second quarter of 2007, up from $1.9 million in the same quarter last year and $1.7 million in Q1 of 2007.
Consolidated gross margin was 27.0% in the second quarter including $3.5 million in one-time warranty, and obsolete and excess inventory charges related to the Vector TX52 CTP product line and the services business. Excluding this charge, gross margin would have been 32.1%, up from 28.4% last quarter and 29.3% in Q2 of last year.
Operating expenses in the second quarter totaled $23.1 million. This includes a one-time charge of $1.5 million for a restricted stock grant, and special charges of $793,000 for severance. Operating losses in Q2 were $4.5 million. Excluding all one-time expenses and special charges, operating income would have been $1.3 million for the quarter.
The numbers presented above represent the results of continuing operations and include non-GAAP measures. A full reconciliation of GAAP to non-GAAP measures is provided in the financial tables below. Supplemental Financial Information has been provided with this release to provide additional details on the company's performance.
Cash and equivalents at the end of the second quarter were $7.3 million, up from $5.7 million at the end of the first quarter. Debt net of cash was $32.7 million as of June 30, 2007, down from $37.1 million from the end of first quarter.
Jeff Cook, Presstek's Chief Financial Officer, said, "While one-time and special charges weighed heavily on our Q2 results, addressing inventory and operational issues quickly and decisively is necessary to strengthen our balance sheet and improve our financial predictability."
Presstek expects revenue for the second half of 2007 to increase approximately 5% from the prior year with normal quarterly seasonality.
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