Baldwin Reports 2M Profit for Quarter
Wednesday, April 30, 2008
Press release from the issuing companySHELTON, Conn. April 29, 2008 -- Baldwin Technology Company, Inc., a leading global manufacturer of process automation technology for the printing industry, reported net sales for the third quarter ended March 31, 2008 of $59.2 million, compared to $53.2 million for the third quarter last year, an increase of 11.3%. Currency translation favorably impacted sales by $4.3 million for the quarter.
Net income for the quarter was $2.0 million, or $0.13 per diluted share, compared to $1.3 million, or $0.08 per diluted share for the similar quarter last year.
Net sales for the nine months ended March 31, 2008 were $171.1 million compared to $144.6 million in the comparable period last year, an increase of 18.3%. Currency translation favorably increased sales by $9.3 million for the nine month period.
Net income for the nine months was $3.3 million, or $0.21 per diluted share, compared to $3.0 million, or $0.19 per diluted share in the prior year.
Net income for the quarter included a partial release of the valuation allowance against U.S. deferred tax assets of $1.2 million, which had a favorable impact on the tax provision for the quarter of the same amount. The Company continually reviews the need for the valuation allowance and released a portion of the valuation allowance due to the sustained and projected profitability of its U.S. operations.
Backlog at the end of the quarter was $63.1 million, compared to a backlog of $52.7 million at the beginning of the fiscal year, and $61.9 million on December 31, 2007.
President and CEO Karl S. Puehringer, commented, "Sales have continued to show resilience during a challenging period in the printing equipment market. As reported in previous quarters, we continue to drive growth and expansion in emerging markets. In developed countries we focus on strengthening our service and support relationships with the OEM press manufacturers and the printer and publisher customer base.
Changes in product mix, the effect of lower sales volume in the European entities and the strong Euro have continued to pressure margins; however, we have been able to mitigate these pressures somewhat with:
• Innovation – our new Cleaning Platform, which defines a new standard for cleaning performance;
• Continued progress on strategic sourcing initiatives – sourcing machined components in low labor cost countries
• Productivity improvements obtained by the recent restructuring in Germany, as an example, and
• Repositioning the Company's manufacturing footprint, one component of which was increased manufacturing of one product line in the U.S. to take advantage of the lower U.S. Dollar."
John Jordan, Vice President and CFO, noted, "We are closely controlling operating costs – year to date OPEX before restructuring decreased to 26.6% in 2008 from 27.2% in 2007. We are continually searching for ways to be more efficient given the current economic climate.
Although trade receivables and inventory increased during the year by $10.1 million, the increase attributable to foreign currency rates was $10.5 million. Thus, on a currency-effected basis, trade receivables and inventory decreased by $0.4 million. In fact, during the current quarter, we reduced working capital excluding cash, adjusted for currency effects, by $2.7 million. We also repurchased 148,325 shares of our common stock and made net repayments of debt of $4.6 million during the quarter as a result of improved cash management activities.
Finally, our ability to release a portion of the valuation allowance against the U.S. deferred tax assets is further testament to our ability to continue with sustainable profitability in our U.S. operations," concluded Mr. Jordan.
The Company will host a conference call to discuss the financial results and business outlook today, April 29th at 11 a.m. Eastern Daylight Time. Call-in information is available on the Company's website at 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, Corporate Secretary Helen Oster and Vice President and CFO John P. Jordan.
An audio replay of the conference call, in its entirety, will be available from one hour after the end of the call until May 6 at 10:59 pm Central Time. To hear that replay, call toll free 866-485-0041 in the U.S. or 203-369-1613 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.
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