Presstek Announces Loss for 1st Quarter
Monday, May 11, 2009
Press release from the issuing companyGREENWICH, CT, -- Presstek, Inc. today reported a loss from continuing operations for the first quarter of 2009 of $1.1 million, or $0.03 per share, versus income from continuing operations of $0.9 million, or $0.03 per share in the first quarter of 2008. Revenues for the quarter were $34.5 million, a decline of $16.3 million or 32% when compared to the same quarter in 2008. The company reported a loss from operations in the first quarter of 2009 of $1.8 million, a decline of $3.6 million from the prior year. Continued improvements in operating expense levels, driven in large part by the successful implementation of the company's Business Improvement Plan as well as continued restructuring actions in late 2008, partially offset the negative impact of reduced sales resulting from ongoing global economic pressures. The company's debt net of cash was $9.7 million at the end of the quarter, a reduction of $12.6 million or 57% from the first quarter of 2008. Including discontinued operations, the company reported a net loss of $1.2 million for the first quarter of 2009, versus net income of $0.2 million in the first quarter of 2008.
Results from continuing operations exclude the company's Lasertel affiliate which is currently being marketed for sale. Lasertel will continue to operate as a separate business during this process, and will remain focused on growing its position in the laser diode market.
"Our vigilance in reducing costs has allowed us to offset a significant portion of the negative impact of the sales decline driven by the current economic uncertainty which is making financing more complex and also causing customers to delay major purchases," commented Presstek Chairman, President and Chief Executive Officer, Jeff Jacobson. "We continue to invest in key growth initiatives, and I am optimistic about the potential of these opportunities. We are aggressively marketing our high quality and high productivity solutions in order to enable our customers to become more productive and profitable during these challenging times. We also remain intensely focused on managing costs and reducing debt, and we believe that these actions, combined with the expected revenue growth from our new product initiatives, will position Presstek for great success."
Overall revenues for the quarter of $34.5 million declined 32% driven by a 62% reduction in equipment sales, reflecting customer delays in major capital commitments, as well as continued tightening in the credit markets. Consumables sales were $21.9 million, a 22% decline from the prior year driven by lower print volume combined with customer inventory reductions. Service revenue declined 20% due to reduced service of traditional equipment and lower parts sales.
Gross margin in the quarter was 35.1% compared to 36.2% in the first quarter of 2008. Margins in the quarter were negatively impacted by equipment product and channel mix, reduced volume, lower utilization in the service business, and foreign exchange.
Operating expenses of $13.9 million in 2009 reflected a year-over-year improvement of $2.7 million, or 16% due primarily to the successful execution of the company's Business Improvement Plan initiatives as well as additional actions taken during the latter part of 2008. Restructuring charges in 2009 of $0.1 million were $0.5 million favorable to 2008.
The loss from operations in the quarter was $1.8 million, a decline of $3.6 million from 2008. Interest and other income improved $0.9 million in 2009 versus 2008 due primarily to a $1.2 million legal settlement partially offset by foreign currency transaction losses. In addition, interest expense declined $0.3 million as a result of the company's reduced debt level and lower interest rates.
Income taxes provided a benefit of $0.3 million in 2009 versus an expense of $0.4 million in 2008.
"Our consistent financial discipline has enabled the company to generate positive cash earnings from continuing operations in the quarter, and reduce debt net of cash 57% below prior year levels despite economic pressures," commented Executive Vice President and Chief Financial Officer Jeff Cook. "The lean cost structure we have created has been instrumental in our ability to manage effectively through these challenging times."
The company assessed the valuation of goodwill, other intangible assets, long-lived assets, and deferred tax assets and no impairment was identified as of the end of the first quarter of 2009. Depending on market and economic conditions, impairment could be identified in future periods, which would result in non-cash impairment charges.
Annual Meeting of Stockholders
The company also announced that its Annual Meeting of Stockholders will be held on Wednesday, June 3, 2009, commencing at 1:30 P.M. local time, at the offices of McDermott Will and Emery, LLP, 340 Madison Avenue, New York, New York.
Information Regarding Non-GAAP Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the company provides non-GAAP financial measures, including debt net of cash, which is defined as debt minus cash, and other GAAP measures adjusted for certain charges, which the company believes are useful to help investors better understand its past financial performance and prospects for the future. 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.
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