New England Business Service, Inc. Announces Third Quarter Results
Press release from the issuing company
GROTON, Mass.- April 18, 2001--New England Business Service, Inc. (NYSE:NEB) today announced results for its third quarter ended March 24, 2001.
Revenues grew 5% to $123.2 million from the prior year's $117.4 million. Included in the quarter are the results of PremiumWear, Inc., which was acquired in July 2000. Net income of $3.5 million, or $.27 per share, compares with $7.5 million, or $.55 per share, in the year ago period. Results in the current period reflect $.9 million of after-tax integration costs, equivalent to approximately $.07 per share. The year ago period benefited by $.05 per share from the effect of a favorable tax ruling. Excluding the impact of these non-recurring items, earnings were $4.5 million in the quarter, or $.34 per share, versus $6.8 million, or $.50 per share, in the prior year's third quarter. Third quarter results for fiscal 2001 include approximately $.15 per share of acquisition-related amortization expense versus $.13 per share last year.
Mr. Robert J. Murray, Chairman and CEO, commented, "The third quarter was a challenging one for the Company as weakened economic conditions reduced demand across our channels. Despite having expanded our product and channel breadth considerably over the past several years, we were unable to avert the impact of this slowdown. We have aggressively managed costs in this environment, and continue to explore profit improvement opportunities which will not sacrifice long-term growth."
Murray added, "Significant progress was made during the third quarter in several key areas. The fulfillment of the Company Colors(TM) work apparel line has been successfully transferred from outside vendors to our facility in Clarksville, Tennessee, thus leveraging the sourcing and embroidery capabilities of PremiumWear. We believe this move will produce significant cost, quality, and customer service improvement as we continue to build this important work apparel business. We continue to be pleased with market acceptance of payroll processing services in conjunction with our Advantage Payroll partnership. To date, approximately 1,000 payroll service agreements have been sold to small businesses under the McBee Payroll(SM) brand, and the momentum continues to build in this initiative. We have also begun to test payroll processing through our NEBS and RapidForms brands with promising early results."
Murray continued, "Our financial outlook for the business this fiscal year remains consistent with our guidance issued in March. Sales for the year ending June 30, 2001, a 53-week fiscal year, are expected to be approximately $550 million, representing a growth rate of approximately 13%, and earnings per share for the year, excluding one-time items, are expected to be in the range of $2.00 to $2.07."
During the third quarter of fiscal year 2001, the Company repurchased 715,000 shares of its stock, leaving approximately 1.2 million shares remaining under the current authorization. For the nine months ended March 24, 2001, stock repurchases totaled 1,095,900 shares.
The Company's Board of Directors declared a dividend of $.20 per share with a record date of May 4, 2001 and a payment date of May 18, 2001.
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