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 March 31, 2012. The Company reported total revenue of $27.0 million compared to $31.9 million in the first quarter of 2011.
The Company generated positive adjusted EBITDA of $0.5 million for the quarter, a reduction of $0.3 million from the prior year but an increase of $1.4 million on a sequential quarter basis. The Company had an operating loss of $0.7 million in the first quarter of 2012 versus an operating loss of $1.2 million in the 2011 first quarter, an improvement of $0.5 million. Cost reduction actions undertaken in the latter half of 2011 contributed significantly to this improvement. During the first quarter of 2012, the Company incurred a net loss from continuing operations of $1.2 million, or $0.03 per share, compared to a net loss from continuing operations of $1.5 million, or $0.04 per share, in the first quarter of 2011. (See "Information Regarding Non-GAAP Measures")
"We are still in the early stages of the recovery as spending remained cautious in the first quarter; however, the number and quality of opportunities in our pipeline has definitely strengthened," said Stanley E. Freimuth, Presstek's Chairman, President and Chief Executive Officer. "We continue to make good progress in our drive to reduce operating expenses to improve profitability, and we are pleased to report positive adjusted EBITDA of $0.5 million. Our focus on optimizing our operations is on track, and we are well positioned to leverage our lowered fixed cost base as our sales grow.
"At the drupa 2012 trade show, the highlight of the event for us was the global commercial introduction of the 75DI, our revolutionary B2 format digital offset press, with a number of important capability enhancements. Through the first 11 days of the 14 day show we conducted more than 100 individual customer demonstrations on this press and the early feedback and interest has been very favorable. We achieved a significant milestone, just prior to drupa 2012, with the announcement of one of our largest 75DI press orders to date to a North American based packaging printer. The packaging industry is a growth segment of the printing market, and we believe this press, due to its unique operating advantages, is an ideal solution for the shorter run lengths and increased versioning which are becoming more prevalent particularly in the folding carton sector of the packaging industry.
"Our growth strategy, which centers on enhancing our product portfolio to meet the requirements of larger commercial printers and the packaging market, expanding our base of recurring revenue from consumables, and leading with innovative products like the 75DI is beginning to gain traction."
First Quarter 2012 Financial Results Total revenue in the first quarter was $27.0 million, a decrease of $4.9 million from the first quarter of 2011.
-- Equipment revenue decreased $1.6 million, to $3.5 million, compared
with the same prior year period. Although sales of DI units improved
year over year, a higher mix of refurbished units resulted in a
reduction in revenues.
-- Consumables revenue totaled $17.6 million compared with $20.7 million
for the same prior year period resulting primarily from generally weak
economic conditions, particularly in Europe, as well as the gradual
erosion of some of our legacy product lines.
-- Service revenue of $6.0 million was essentially flat compared to the
year ago quarter.
Gross margin percent was 27.0% compared to 31.2% in the first quarter of 2011. Lower margins were primarily the result of unfavorable equipment and consumable product mix, higher DI equipment costs resulting from a stronger yen, and unabsorbed manufacturing overhead in our factories resulting from lower overall production.
First quarter operating expenses declined $3.2 million, or 28%, to $8.0 million compared with the prior year period. The decline in operating expenses was primarily related to reduced payroll and other costs resulting from recent cost reduction initiatives, as well as reduced bad debt and stock compensation expenses. (See "Information Regarding Non-GAAP Measures")
Debt net of cash, which improved from $11.2 million to $8.8 million on a sequential quarter basis, closed at its lowest level since the fourth quarter of 2010 resulting from a continued emphasis on effectively reviewing and managing working capital.
Information Regarding Non-GAAP Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides non-GAAP financial measures, including operating expenses excluding special charges; adjusted EBITDA; debt net of cash; and other GAAP measures adjusted for certain charges, which the Company believes are useful to help investors better understand its past financial performance and prospects for the future. A full reconciliation of GAAP to non-GAAP measures is provided in the supplemental financial information provided with this press release.
Conference Call and Webcast
Information Management will discuss Presstek's first quarter 2012 results in a conference call on Tuesday, May 15, 2012 at 10:30 a.m. Eastern Time. Conference call information is below:
CONFERENCE CALL ACCESS Domestic Dial In: (866) 804-6929
International Dial In: (857) 350-1675 Passcode: 79247438
Investors can access the call in a "listen only" mode via the Internet at http://www.presstek.com
In addition, for those unable to participate at the time of the call, a rebroadcast will be available following the call from 12:30 PM Eastern Time on Tuesday, May 15, 2012 until 11:59 PM Eastern Time on Tuesday, May 22, 2012.
REBROADCAST ACCESS Domestic Dial In: (888) 286-8010 International Dial In: (617) 801-6888 Passcode: 59405233
An archived webcast of this conference call also will be available on the "Investor Events Calendar" page of the company's web site.