Xeikon Reports Disappointing 2000 Results, Blames Xerox Woes and US Dollar
Press release from the issuing company
MORTSEL, Belgium-March 8, 2001--Xeikon N.V. (Nasdaq: XEIK), the world's leading supplier of production digital printing systems for a wide range of commercial and industrial printing applications, today reported revenues and earnings for the three-month and twelve-month periods ended December 31, 2000.
For the full year period, revenues were $173.4 million, including $53.9 million from the black & white business. This compares with revenues of $201.7 million for the full year of 1999. Revenues from equipment sales for the full year period were $87.8 million, which included $64.6 million for color equipment and $23.2 million for black & white equipment. Non-equipment revenues for the period were $85.6 million, or $54.9 million in the color business and $30.7 million in the black & white business. This compares with equipment revenues of $127.4 million for the same period last year, $106.4 million of which were composed by sales of color equipment and $21 million by sales of black & white equipment. Non-equipment revenues for 1999 were $74.3 million, including $51.4 million in color sales and $22.9 million in black & white sales. Non-equipment revenues include consumables, spare parts and service contracts.
Gross margin for the full year period declined to 29 percent, compared with 38 percent for the full year of 1999. Gross profit for the full year was $49.6 million, down from $75.7 million in last year. Operating results for the full year period showed a loss of $27.6 million, compared with income of $21.8 million for the previous year.
For fiscal 2000, Xeikon posted a net loss of $24.6 million, or a loss of $0.83 per basic and diluted share. This compares with net income of $14.9 million, or $0.52 per basic and $0.51 per diluted share last year.
Results for the period were adversely affected by a 16 percent year-over-year appreciation of the U.S. dollar, the reporting currency of the Company, against the Euro, the Company's functional currency. Excluding the non-recurring charges related to the impairment of Xeikon's investment in Varis Corporation and the in-process R&D of the Agfa DPS integration, the operating loss for the year would have been $20.5 million and the earnings per share for this period would have been a loss of $0.59 per basic and diluted share.
Commenting on the results, Alfons Buts, president and CEO of Xeikon said: "Our results for 2000 have remained far below our expectations for several reasons. First, lower sales to OEMs had a substantial negative effect. Sales to Xerox, which accounted for 29% of our total revenues in1999, declined to 14% during 2000. We also experienced a significantly lower-than-planned number of commercial shipments of our new CSP system, as well as no growth in our B&W business and a deteriorated gross margin. In addition, while our costs increased as a result of the Agfa DPS integration, this acquisition has not yet translated into additional revenues or improved margins."
Mr. Buts added: "We are in the process of implementing a series of measures aimed at bringing the Company back to growth and profitability. In addition to building on our strategic relationships with IBM and MAN Roland, during 2001 we will strengthen our Xeikon-branded channels, including expanding the Xeikon sales and customer support resources in key markets. In addition, the Company has initiated a series of measures to improve overall gross margin and especially on black and white products and at the same time to significantly reduce G&A and R&D expenses."
Xeikon N.V. develops, produces and markets commercial digital color printing systems and related consumables specifically designed to meet the quality, speed, reliability, cost, variable content and on-demand requirements of the global digital color printing market. Xeikon supplies both original equipment manufacturers, as well as a global network of over 30 value-added distributors (VADs) operating in more than 40 countries.
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