Presstek reports $1.6 million improvement in Q1 2010 operating profit
Tuesday, May 11, 2010
Press release from the issuing company
Greenwich, CT, - Presstek, Inc., a leading supplier of digital offset printing solutions to the printing and communications industries, today reported financial and operating results for the first quarter ended April 3, 2010. The Company reported total revenue of $34.5 million in the first quarter of 2010, level with the amount reported in the first quarter of 2009 and an increase of $1.0 million, or approximately 3 percent versus the fourth quarter of 2009.
The Company had an operating loss of $271,000 in the first quarter of 2010, a $1.6 million improvement from a loss of $1.8 million in the 2009 first quarter. In the quarter, the Company had adjusted EBITDA of $1.8 million, an increase of $1.4 million when compared to the first quarter of 2009. During the first quarter of 2010, the Company incurred a net loss from continuing operations of $0.5 million, or $0.02 per share, compared to a net loss from continuing operations of $1.1 million, or $0.03 per share, in the first quarter of 2009. (See "Information Regarding Non-GAAP Measures")
"For the second straight quarter we have increased our sequential revenue, grown our adjusted EBITDA and significantly reduced our debt net of cash. Our current debt net of cash of $5.4 million represents an 85 percent reduction from our high point of $37.0 million three years ago this quarter," said Presstek Chairman, President and Chief Executive Officer, Jeff Jacobson. "We are pleased with our progress and the momentum that we have generated over the past two quarters. As we look to the remainder of 2010 we believe that we will see an increase in revenue versus the prior year as we continue to expand our market presence with our new product offerings and expanded distribution footprint. With this increased annual revenue we also expect to see continued positive adjusted EBITDA levels for the remainder of 2010."
First Quarter 2010 Financial Results Total revenue in the first quarter of 2010 was $34.5 million, the same level that was achieved in the first quarter of 2009, and an increase of $1.0 million from $33.5 million in the fourth quarter of 2009.
- Equipment revenue increased 28 percent to $6.4 million in the first quarter of 2010, compared with $5.0 million for the same period last year. This increase was driven by increased DI press sales and a favorable mix of 52DI units with aqueous coating. The first quarter equipment revenue represents a sequential quarterly revenue increase of $0.6 million, or 10 percent due primarily to increased unit volumes, partially offset by an unfavorable mix of products versus the fourth quarter of 2009.
- Consumables revenue totaled $21.5 million in the first quarter of 2010, compared with $21.9 million for the same period last year. Increases in the "growth" DI plates and thermal CTP plates of 6 percent and 10 percent, respectively, were more than offset by reductions in the "traditional" other consumables and polyester CTP product categories. Sequential quarterly revenue for consumables increased $0.9 million, or 4.5 percent from the fourth quarter of 2009 levels.
- Service revenue declined approximately 13 percent to $6.6 million in the first quarter of 2010 compared to the year ago quarter primarily due to the impacts on service of the overall decrease in equipment placements that occurred in 2009 and a general trend by customers to delay service calls and maintenance to save money in a difficult economy. Sequential quarterly revenue for service was down $0.5 million versus the fourth quarter of 2009.
Gross margin percent for the first quarter of 2010 was 33.0% compared to 35.1% in the first quarter of 2009, and 33.9% in the fourth quarter of 2009. The reduction versus the first quarter 2009 was due primarily to a higher proportion of equipment revenue which typically has lower margins and reduced productivity due to lower manufacturing volumes.
First quarter 2010 operating expenses of $11.7 million represented a reduction of $2.3 million, or 16 percent, from the first quarter of 2009. The decline in operating expenses was primarily related to reduced payroll costs, professional service fees and travel expenses, and the timing of trade shows; offset partially by increased non-cash stock compensation expenses. Operating expenses declined by $0.4 million from the fourth quarter of 2009 levels.
Results from continuing operations exclude the results from the Company's Lasertel subsidiary which were recorded as discontinued operations. On March 5, 2010, the Company completed the sale of Lasertel for approximately $10 million, comprised of $8 million of cash and $2 million of laser diode inventory for Presstek's future product requirements. Lasertel operating results for the period prior to the sale were a loss from operations of $0.6 million. Including the $0.5 million gain on the sale, Lasertel provided a net loss of $0.1 million which was equal to the loss reported in the prior year's first quarter.
Debt net of cash totaled $5.4 million at the end of the first quarter, a reduction of $6.7 million versus the fourth quarter of 2009. The primary cause of the reduction was the net cash proceeds received from the sale of the Company's non-core Lasertel subsidiary, which also provided cash from operations benefits in the period.
"Cash management continues to be a strong point and an area of focus for our entire organization," said Presstek Executive Vice President and Chief Financial Officer, Jeff Cook. "We continue to strive to maintain a proper balance of maximizing cash generation from operations while investing strategically in our long-term growth initiatives."
"This month we are introducing our new 75DI press at the IPEX trade show in the United Kingdom," commented Jacobson. "This press, with its revolutionary reduction in make-ready time, represents a major step forward in our strategic initiatives to drive our products into larger customers and to a broader market segment. The introduction of the Presstek 75DI press is the culmination of three years of major strategic improvements to our Company, and we are now in a great position to capitalize on these initiatives to grow our business. We are very excited about the significant opportunity we have in front of us. We participate in large and growing markets; we have leading edge products and technologies; and with our expanded portfolio and distribution networks, we are entering into new segments and geographies. We believe we are at a turning point and look forward to continuing the momentum we have started."
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