X-Rite Sales drop 29%
Thursday, May 14, 2009
Press release from the issuing companyGRAND RAPIDS, Mich. -- X-Rite, Incorporated -- today announced its first quarter 2009 financial results.
Highlights of today’s announcement:
First quarter 2009 net sales of $46.6 million, which is within the range the Company had forecast
Strong execution of the Company’s profit improvement plan
o Adjusted EBITDA margin for the quarter of 19.4%
o Healthy cash flow from operations
Strengthened balance sheet
o Debt paid down by $20.8 million in the quarter
o Quarter ending net debt balance of $206.7 million
iVue success at Spring trade shows signals strong potential
The Company reported first quarter 2009 net sales of $46.6 million. These results are in the range of the Company forecast provided earlier this year and reflect a year-over-year sales decline of 29.3%. Net sales for the first quarter of 2008 were $65.9 million. Both the Color Measurement and Color Standards segments experienced similar year-over-year declines as many customers and channel partners continued to delay purchase decisions in key X-Rite market segments.
Driven in large part by a series of cost management actions started last year, and profit improvement initiatives announced earlier this year, the Company reported adjusted EBITDA (as defined by X-Rite’s credit agreements) in the first quarter of $9.1 million or 19.4% of net sales. This compares to $13.3 million or 20.2% of net sales in the first quarter of 2008. X-Rite reported a 2009 first quarter net loss of $8.7 million versus a net loss of $16.8 million in the same period last year, with both results negatively influenced by acquisition, interest and restructuring related charges.
The Company reported that despite the reduction in net sales in the period, close attention to expenses, working capital management and the sale of X-Rite’s former headquarters contributed to another quarter of strong positive cash flows. The Company’s debt balance was reduced in the first quarter from $270.9 million to $250.1 million. The Company also reported a first quarter 2009 ending cash balance of $43.3 million.
Bradley J. Freiburger, X-Rite’s interim CFO commented, “We are satisfied that the steps we are taking in controlling costs and managing working capital demands on the business are aligned with the realities of the current market place. As we have done over recent quarters, we will continue to monitor our top line sales prospects and make adjustments to our cost structure and business focus maintaining equilibrium between affordability and opportunity.”
The Company commented that its new iVue paint matching system launched late in 2008 was received extremely well this Spring in a number of important retail trade shows. The Company went on to say that show-related sales doubled from the previous year’s results.
“We have met with many customers and partners in recent months and it is clear that many projects and initiatives are being planned even as the general market demand sags and capital spending is delayed” said Thomas J, Vacchiano Jr., X-Rite’s CEO. “It is important to realize that while we can’t predict the moment when budgets will free up, we believe that we are generally maintaining, and in some segments gaining, market share. We also believe that a majority of global customers recognize X-Rite and Pantone brands as integral to their evaluation process for any color related project.”
General economic conditions continue to create substantial uncertainty and the Company is not providing guidance related to longer-term performance. Vacchiano commented, “In this challenging climate we are paying very close attention to our sales pipeline and doing our utmost to deliver compelling value to our customers. That said we do not see a turnaround in our overall sales performance during the second quarter.”
The Company intends to discuss its first quarter 2009 financial performance with a scheduled earnings conference call and presentation on May 13, 2009.
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