Baldwin announces Q4 and full year FY2010 profit
Wednesday, September 01, 2010
Shelton, Conn. – Baldwin Technology Company, Inc., a global leader in process automation technology for the printing industry, today reported its financial results for the Company's fiscal year and fourth quarter ended June 30, 2010.
- Fourth quarter EBITDA as reported of $2.6 million
- Full year net income was $5 million, or $0.32 per share
- Total year cash flow from operations was $11.5 million
- Reduced net debt by $9.1 million to $5.1 million during the year
- Expanded product portfolio and entered digital market through acquisition of UV curing technology
Fourth Quarter and Fiscal Year 2010 Financial Results
The Company reported fourth quarter net sales of $37.4 million, a decrease of $0.9 million, or 2.3% from net sales of $38.3 million for the fourth quarter of the prior year. Currency had relatively little impact on sales.
Net sales for the fiscal year ended June 30, 2010 were $151.8 million compared to net sales of $176.6 million for the year ended June 30, 2009, a decrease of $24.8 million, or 14%. Approximately $4.8 million of the decrease, or 2.7%, was attributable to the effect of currency.
Net income for fourth quarter was $1.4 million or $0.09 per diluted share, compared to the net results of $0 million or $0.0 per diluted share for the comparable quarter in the prior year. The results of the current quarter included charges for restructuring of $0.5 million, expenses related to the acquisition of the graphic arts UV curing business of Nordson Corporation of $0.3 million, costs related to an amendment of the Company's primary credit agreement of $0.3 million and a gain on bargain purchase related to the Nordson UV acquisition of $3.0 million.
Net income for fiscal year 2010 was $5 million or $0.32 per diluted share compared to a net loss of $11.8 million or $0.77 per diluted share for the prior year. Eliminating several non-routine charges, as detailed on the attached schedule, the Company recorded a net loss of $2.4 million, or $0.16 per diluted share for the year.
Adjusted EBITDA, which the Company defines as earnings (loss) before interest, taxes, depreciation, amortization, and other non-routine expenses, as shown in the attached schedule, was $0.2 million for the FY 2010 fourth quarter, compared to $0.7 million for the same quarter of 2009, and $2.0 million and $1.6 million for the full fiscal years of 2010 and 2009, respectively.
Cash flow from operations was $11.5 million and $2.6 million in FY2010 and FY2009, respectively.
Orders for the fiscal fourth quarter were approximately $32.7 million, a decrease of 14.4% from orders of $38.2 million during the fourth quarter of fiscal year 2009. Orders for the year were $137.6 million, a decrease of 18.1% from prior year orders of $168.0 million. However, orders for the second half of fiscal 2010 were flat compared to the second half of fiscal 2009. Backlog as of June 30, 2010 was $29.9 million which included $4.4 million from the acquired Nordson UV curing business, compared to $39.7 million a year earlier.
Please refer to the schedule following the reported GAAP results which shows a reconciliation of GAAP results to non-GAAP adjusted results, and the notes below explaining management's reasons for providing certain non-GAAP financial measures.
Credit Facility Amendment
The Company concluded an amendment to its bank credit agreement on June 12, 2010, which provided approval for the acquisition and amended certain covenant targets. The Company expects to conclude an amendment soon that will establish the covenant targets for Fiscal Year 2011.
New Product Introductions
At Graph Expo 2010, held October 3 through 6 in Chicago, Baldwin will showcase its expanded suite of drying products by featuring the recently acquired Nordson UV curing technology. Additionally, Baldwin will introduce CleanPac cleaning cloths, a new consumables offering targeted at manual cleaning applications in the press room. Baldwin will also be highlighting its "Cleaning Combination Products" at IfraExpo 2010 being held October 4 through 6 in Hamburg, Germany.
President and CEO Karl S. Puehringer said, "We are at the completion of a challenging year during which we experienced further declines in demand. Through our early and diligent execution of cost reduction programs, we positioned the Company well to maintain profitability and positive cash flow even at lower revenue levels. Given the stabilization of orders and sales and gross margins during the second half of fiscal 2010, we are now focused on growth opportunities to further strengthen the Company's competitive position.
"We are excited with our acquisition of the graphic arts UV curing business of Nordson Corporation. This complements our IR drying portfolio and is in line with our strategy to strengthen the Company's position as a leader of process automation in print. This acquisition also facilitates the Company's entry into the fast growing digital printing sector of graphic arts. We are now in the process of integration and are very impressed by the high quality and professionalism of the Nordson UV personnel.
"The introduction of new product technologies into the flexography and digital printing sectors, as well as the expansion of alliances and initiatives in the emerging markets are yielding positive results. We expect these areas to make important contributions to future revenue growth and profitability."
Vice President and CFO John P. Jordan said, "We will continue our commitment to tight cost management and margin improvement initiatives. Our programs of global sourcing, manufacturing in lower cost countries and standardization of components have enabled us to recover margin points lost during the economic downturn and should continue to drive improved gross margins in the current year. Those disciplines, combined with tight management of working capital, generated a cash flow from operations for the fiscal year of $11.5 million or $1.9 million after eliminating one-time items and contributed to a reduction of net debt from $14.2 million to $5.1 million."