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Delphax Reports Continued Profitability for Fiscal 2011

Friday, March 09, 2012

Press release from the issuing company

Delphax Technologies Inc. (Pink Sheets:DLPX.PK), a global provider of high-speed digital printing equipment, today reported continued profitability for fiscal 2011, its third consecutive year of positive net income.

For the fiscal year ended Sept. 30, 2011, net income was $545,000 on net sales of $32.2 million, with R&D expense of $4.2 million. That compares with net income of $2.3 million on net sales of $32.3 million, with R&D expense of $2.1 million in fiscal 2010.

Fiscal 2011 equipment sales were $1.2 million, up from $816,000 in fiscal 2010. Revenues from maintenance, spares and supplies were $30.9 million in fiscal 2011, compared with $31.5 million in fiscal 2010.

“The results underscore a central premise of our planning for Delphax—that our established core business gives us a solid foundation for growth and continuing innovation,” said Dieter Schilling, president and chief executive officer. “The sales performance of our core business in fiscal 2011, led by a 52 percent increase in equipment sales, enabled us to remain profitable while we doubled research and development expense in preparation for our entry into the color printing arena.”

The company, a long-time leader in the development of high-speed toner-based monochrome printing equipment, recently announced plans for a May 2012 introduction of a commercial class high-performance digital color print system based on a unique inkjet technology. The system – elan™ powered by Memjet – represents an entirely new category of high-quality print technology and has been designed as a direct response to growing customer demand for more efficient, versatile and affordable color printing equipment.

During November 2011, Delphax negotiated a new senior credit facility with a commercial bank that provides $6.0 million of revolving credit, subject to a borrowing base of accounts receivable and inventory. In connection with this new financing, the company paid off the final $3.0 million in secured subordinated debt owed to Harland Clarke, its largest customer and primary lender for the last three years.

“We are also encouraged by the number of equipment sales we’ve had so far in fiscal 2012, and believe that our established core business will continue to sustain profitability, net of R&D expense, as we take the final steps in preparing for market,” Schilling said.  “The addition of high-speed color capability is an exciting and essential strategic advance for Delphax, and we believe we are well prepared for it.”

Delphax will introduce elan at the drupa 2012 international trade fair May 3-16 in Dusseldorf, Germany. Shareholders who are able to attend the company’s annual meeting on April 19 will see a preview of the presentation of elan as it will be offered at drupa. Customer beta testing is scheduled to take place in the first half of fiscal 2013, with production shipments scheduled to commence shortly thereafter.


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