Baldwin announces Y-O-Y sales up almost 9%
Friday, February 11, 2011
Press release from the issuing company
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 second quarter ended December 31, 2010.
- Orders increased 28% year-over-year, including acquired UV products
- Sales up 8.9% year-over-year
- Margins increased quarter-over-quarter
- Mark T. Becker elected President & CEO effective October 1, 2010
Second Quarter Fiscal 2011 Financial Results
The Company reported net sales of $42.2 million for the second quarter, an 8.9% increase over net sales of $38.8 million for the second quarter of the prior fiscal year. Currency translation had virtually no impact on sales for the quarter. Sales from the entities acquired on June 30, 2010 contributed $4.1 million.
Net loss for the second quarter was $0.6 million or $0.04 per diluted share, compared to net loss of $0.4 million or $0.03 per diluted share for the comparable quarter in the prior year. Net loss after adjusting for the net of tax effect of restructuring expenses in the current quarter was $0.3 million, or $0.02 per diluted share.
EBITDA after adjustment for restructuring costs recorded during the quarter was $0.7 million, essentially equal to the EBITDA for the same quarter of the prior year. Cash flow from operations in the quarter was $1 million compared to $10.8 million in the second quarter of the prior year. Cash flow in the prior year quarter included $9.6 million proceeds from settlement of a patent infringement lawsuit.
Orders for the quarter were approximately $44.0 million, compared to $34.3 million for the second quarter of the prior year and $40 million for the prior quarter, an increase of 28% over the same quarter in the prior year and 10% over the prior quarter. Backlog at December 31, 2010 was $33.6 million compared to $31.8 million at September 30, 2010 and $29.9 million at June 30, 2010. Acquired entities contributed $5.4 million of orders for the quarter and comprised $4.2 million of the backlog at December 31, 2010.
President and CEO Mark T. Becker said, "Our order trends for both core and new UV products continue to improve. Year to date, orders exceeded those received during the comparable six-month period last year by 23%. Sales also improved during the first half of fiscal 2011 driven by strength in the Americas in equipment and the acquired UV products, which helped offset weakness in other parts of the world. Year to date sales in the core business has not yet recovered to prior year levels due to timing delays between when orders are received and when they are recorded as sales. The recent increased order activity is expected to have a favorable impact on our fiscal fourth quarter and fiscal 2012 sales.
"We have just completed a functional reorganization of the Company which will enable a consolidation of facilities and adjustment of headcount consistent with the current revenue level. We will be presenting a restructuring plan to the Board of Directors next week for implementation during the third quarter. The restructuring undertaken in the second quarter was a small first step in that larger overall plan. The resulting leaner organization will reposition the Company for profitability and improved cash flow and will also position us to refinance our credit facilities prior to the end of their terms," Becker concluded.
Vice President and CFO John P. Jordan added, "Our ongoing margin initiatives (global sourcing, manufacturing in lower cost countries and standardization of components and controls), combined with increased sales over the prior quarter and the influence of the higher-margin UV business, helped increase margins from 28.1% in the prior quarter to 29.5% in the current quarter. We anticipate that these initiatives will continue to contribute to margin growth.
"Aggressive execution of our inventory reduction initiatives eliminated $1.3 million of inventory (net of foreign exchange impact) during the current quarter. Our new global organization structure and ongoing focus on working capital management are expected to contribute to cash flow in future quarters.
"The debt due under the existing Bank of America credit agreement has been classified as current due to its maturity within one year. The Company met its credit agreement covenant targets during the second quarter, and we anticipate a continuing ability to comply with the covenants and to refinance the Company's credit facilities during 2011. Our internal cash-generating capability is expected to provide adequate liquidity to carry out our operating and restructuring plans," Jordan concluded.
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