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Global Graphics reports Q2 and half year results as quarterly loss increase

Thursday, August 05, 2010

Press release from the issuing company

Pompey, France - Global Graphics SA, experts in developing electronic document and printing software, announces financial results for the second quarter and the first six months of the year ending 31 December 2010.

Global Graphics SA, experts in developing electronic document and printing software, announces financial results for the second quarter and the first six months of the year ending 31 December 2010.

Comparisons for the second quarter of 2010 with the second quarter of the previous year include:

- Sales of Euro 2.2 million this quarter, compared with Euro 2.6 million in Q2 2009;
- An operating loss of Euro 1.2 million this quarter compared with an operating loss of Euro 0.1 million in Q2 2009;
- An adjusted operating loss of Euro 0.7 million this quarter compared with an adjusted operating loss of Euro 0.2 million in Q2 2009;
- An adjusted pre-tax loss of Euro 0.8 million this quarter (or an adjusted pre-tax loss of Euro 0.08 per share) compared with an adjusted pre-tax loss of Euro 0.4 million in Q2 2009 (or an adjusted pre-tax loss of Euro 0.04 per share);
- A net loss of Euro 1.5 million this quarter (or a net loss of Euro 0.14 per share) compared with a net loss of Euro 0.5 million in Q2 2009 (or a net loss of Euro 0.05 per share); and
- An adjusted net loss of Euro 1.0 million this quarter (or an adjusted net loss of Euro 0.10 per share) compared with an adjusted net loss of Euro 0.6 million in Q2 2009 (or an adjusted net loss of Euro 0.06 per share).

Commenting on performance, Gary Fry, Chief Executive Officer, said: "Clearly, the effect of the reorganization that took place in April hit our numbers in the second quarter and the first six months of 2010. This reorganization was successful and has left us with a lower cost base that is manageable on current revenues from existing customers. I have been very proud of how the company and our partners have embraced this change and I believe that we are stronger and more agile going forward.

"Traditionally we enjoy a major bulk order in the second quarter. This customer still has inventory for another quarter and therefore did not need to buy from us during Q2. The lack of this bulk order is the main reason for the drop in sales made in the eDocument segment of the Company's business over those made in the second quarter of 2009.

"I was very pleased to conclude and announce a new five-year partnership deal with HP in May. HP has been a great partner for Global Graphics for many years and our relationship has never been better. We also saw sustained growth from Jaws RIP customers in the wide format segment.

"During the quarter, we launched version 2.5 of gDoc Fusion which has significant enhancements that our early adopter customers had requested. Web sales are still low but are increasing month on month. Corporate sales are progressing, with signed corporate license plans with customers like the United States General Services Administration (the US federal procurement agency), with the UK Home Office via Fujitsu, and several others. We have also started some bundling offers with Mindjet and Quark that we introduced late in the quarter."

Second quarter 2010 performance
Sales for the second quarter 2010 amounted to Euro 2.2 million compared with Euro 2.6 million in the second quarter 2009, or a sequential decrease of 17.4% at current exchange rates, and of 23.1% at constant exchange rates.

Total operating expenses amounted to Euro 3.3 million this quarter compared with Euro 2.6 million in the same period of 2009 and Euro 3.0 million in Q1 2010. Non-recurring expenses for the second quarter 2010 amounted to Euro 0.5 million, and included expenses of Euro 0.4 million with regards to the reorganization plan of the Company which was implemented in April 2010, and another Euro 0.1 million with respect of allowances for certain doubtful accounts.

The Company reported an operating loss of Euro 1.2 million for this quarter (or a loss equivalent to 54.6% of Q2 2010 sales), compared with an operating loss of Euro 0.1 million in Q2 2009 (or a loss equivalent to 2.6% of Q2 2009 sales).

The Company reported an adjusted operating loss (as defined in the accompanying table) of Euro 0.7 million for this quarter (or a loss equivalent to 33.4% of Q2 2010 sales), compared with an adjusted operating loss of Euro 0.2 million, equivalent to 8.1% of Q2 2009 sales.

The Company reported an adjusted pre-tax loss (as defined in the accompanying table) of Euro 0.8 million for this quarter, compared with an adjusted pre-tax loss of Euro 0.4 million in Q2 2009. Accordingly adjusted pre-tax EPS was a loss of Euro 0.08 this quarter compared with an adjusted pre-tax loss of Euro 0.04 per share in Q2 2009.

The Company reported a net loss of Euro 1.5 million for this quarter (or a net loss of Euro 0.14 per share), compared with a net loss of Euro 0.5 million in Q2 2009 (or a net loss of Euro 0.05 per share).

The Company reported an adjusted net loss (as defined in the accompanying table) of Euro 1.0 million for this quarter, compared with an adjusted net loss of Euro 0.6 million in Q2 2009. Accordingly, adjusted net EPS was a loss of Euro 0.10 this quarter, compared with an adjusted net loss of Euro 0.06 per share in Q2 2009.

First six months performance
Sales for the first six months of 2010 amounted to Euro 4.2 million compared with Euro 5.3 million for the same period of 2009, or a sequential decrease of 21.2% at current exchange rates, and 22.2% at constant exchange rates.

Total operating expenses amounted to Euro 6.3 million for the first six months of 2010, compared with Euro 5.3 million for the same period of 2009. Non-recurring expenses for the first six months of 2010 amounted to Euro 0.5 million, and included expenses of Euro 0.4 million with regards to the reorganization plan of the Company which was implemented in April 2010, and another Euro 0.1 million with respect of allowances for certain doubtful accounts.

The Company reported an operating loss of Euro 2.3 million for the first six months of 2010 (or a loss equivalent to 54.6% of the period's sales), compared with an operating loss of Euro 0.2 million for the same period of 2009 (or a loss equivalent to 3.7% of that period's sales).

The Company reported an adjusted operating loss (as defined in the accompanying table) of Euro 1.8 million for the first six months of 2010 (or a loss equivalent to 43.0% of the period's sales), compared with an adjusted operating loss for the same period of 2009 of Euro 0.5 million (or a loss equivalent to 8.7% of that period's sales).

The Company reported an adjusted pre-tax loss (as defined in the accompanying table) of Euro 2.1 million for the first six months of 2010 (or an adjusted pre-tax loss of Euro 0.20 per share), compared with an adjusted pre-tax loss of Euro 0.6 million for the same period of 2009 (or an adjusted pre-tax loss of Euro 0.06 per share).

The Company reported a net loss of Euro 2.7 million for the first six months of 2010 (or a net loss of Euro 0.26 per share), compared with a net loss of Euro 0.6 million for the same period of 2009 (or a net loss of Euro 0.06 per share).

The Company reported an adjusted net loss (defined in the accompanying table) of Euro 2.2 million for the first six months of 2010, compared with an adjusted net loss of Euro 0.8 million for the same period of 2009. Accordingly, adjusted net EPS was a loss of Euro 0.22 per share for the first six months of 2010, compared with an adjusted net loss of Euro 0.08 per share for the same period of 2009.

Commentary on the remainder of 2010
Gary Fry continued: "Our strategy is clear: we will win and grow in the market segments that we have committed to work in, namely production printing, office printing and knowledge worker applications. We have reorganized the Company to be financially sensitive to market conditions and to ensure the correct balance of skills required in all areas. We have also recruited some top talent that will enable us to execute on this strategy. Clearly, overall macro-economic conditions have not been kind to us over the past twelve months, and we have now made the changes to adapt to this.

"We are seeing very positive signs of adoption in the new segments and recovery in the traditional segment. We have worked tirelessly to make sure that our OEMs remain at the leading edge and therefore competitive, and will continue to do so. We have some exciting partnerships that will allow greater and faster adoption of both embedded printing and gDoc applications. I expect to see some positive trends during the next two quarters."

Second quarter 2010 conference call details
Global Graphics will hold a conference call today at 10.00 CET about its results for the second quarter and the first six months of the year ending 31 December 2010.
Callers should dial +44 (0)207 162 0177 and quote "reference number 871834, Global Graphics quarterly results conference call" to the operator. The call will be available for replay for 7 working days by dialing +44 (0)207 031 4064 (freephone number UK only: 0800 358 1860), access code 871834.

Third quarter 2010 results announcement
Global Graphics expects to announce its financial results for the quarter and the nine-month period ending 30 September 2010 on Wednesday 20 October 2010 before market opening.

 

 

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