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Delphax Announces 10M sales for Q1 08

Friday, February 08, 2008

Press release from the issuing company

MINNEAPOLIS, Feb. 7 -- Delphax Technologies Inc., a global provider of high-speed digital printing systems, today reported net sales of $10.0 million for the first quarter ended Dec. 31, 2007, compared with $11.7 million in the same period a year earlier. The fiscal 2008 first-quarter net loss was $1.1 million, or $0.16 per share, compared with net income of $47,000, or $0.01 per diluted share, for the first quarter of fiscal 2007.

As previously reported, the company shipped a CR Series press to a new customer in the United Kingdom during the first quarter of fiscal 2008 in a transaction that is expected to be eligible for revenue recognition in the fourth quarter of fiscal 2008. Equipment sales were $194,000 for the fiscal 2008 first quarter, down from $947,000 for the first quarter a year earlier. Fiscal 2008 first-quarter sales of maintenance, spares and supplies were $9.8 million, down from $10.7 million for the first quarter of fiscal 2007.

"We were encouraged by the selection of a CR Series press by an award-winning commercial printer attuned to the latest print-on-demand technology, but disappointed that we were unable to report an operating profit for the first time in five quarters," said Dieter P. Schilling, president and chief executive officer. "We are proceeding with our plan to tighten the focus of an enhanced sales effort within those segments of the commercial printing market where we believe our roll-fed CR Series presses offer clear-cut and valuable advantages in speed and productivity. As we've stated previously, our overriding objective is to close the gap between sales potential and sales performance."

Gross margin for the first quarter of fiscal 2008 was $2.6 million, or 26 percent of net sales, down from $3.1 million, or 27 percent of net sales, for the first quarter a year earlier.

Fiscal 2008 first-quarter operating expenses increased 13 percent to $3.2 million from $2.8 million for the first quarter of fiscal 2007. The increase was due primarily to the weakening of the U.S. dollar vs. the Canadian dollar. For the first quarter of fiscal 2008, the Canadian dollar averaged $1.02 as compared with $0.88 for the first quarter of fiscal 2007, an increase of 16 percent. Approximately 40 percent of the company's expenditures are denominated in Canadian dollars.

For the fiscal 2008 first quarter, Delphax achieved positive cash flow from operations in excess of $1.0 million due primarily to the collection of accounts receivable. Accounts receivable at Dec. 31, 2007, decreased $1.6 million from $7.2 million at Sept. 30, 2007, to $5.6 million.

During the first quarter of fiscal 2008, the company exhibited its industry-leading digital press, the CR2200, at the MBO America Innovation Days trade show in Westampton, N.J. The CR2200 demonstrated a running speed of 500 feet, or 2,180 pages, per minute -- the highest speed of any toner-based digital press.

Also during the fiscal 2008 first quarter, Delphax announced that the Imaggia, its premier sheet-fed digital press, had reached 10 billion feet of production since its introduction -- nearly 1.9 million miles of high-quality printed material meeting the highest worldwide standards for non-impact MICR (magnetic ink character recognition) encoding for secure documents. The company presented commemorative awards to the two companies with the most extensive use of Imaggia presses -- Harland Clarke of San Antonio, Texas, and Davis + Henderson of Toronto, Ontario.




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