Indigo Reports First Quarter Results, Revenue Up 19% to $42.6 Million
Press release from the issuing company
Maastricht, The Netherlands, April 30, 2001 - Indigo N.V. (NASDAQ: INDG), a leader in digital color printing systems, today reported first quarter revenues of $42.6 million, compared with first quarter revenues of $36.0 million in 2000. Operating revenues grew 19 percent, compared with the first quarter of 2000. Revenues were the highest ever reported by the Company for a first quarter, traditionally the year's weakest quarter.
Indigo continued to have strong unit shipments in the first quarter across its broad product line, increasing 11 percent over the first quarter of 2000. Revenue from equipment sales increased 20 percent to $24.1 million, compared to $20.1 million in the first quarter of 2000. Post-sales revenues, including consumables and service, were $18.5 million in the first quarter of 2001, a 17 percent increase compared with the first quarter of 2000. A 20 percent increase in the number of pages printed by Indigo customers worldwide was offset by lower service and consumables pricing, low post-sales revenues from Asia Pacific, and a negative impact from currency conversion. Post-sales gross margin was $9.9 million, or 54 percent of post-sales revenues.
"We're encouraged by the results for the first quarter and the progress Indigo is making on many fronts," said Benny Landa, Indigo's chairman and chief executive officer. "We continue to see growing evidence of the printing industry's shift to digital printing. No less importantly, there is continued demand for the UltraStream 2000 press, our highest performance offering. In addition to sales to new customers, current customers are upgrading from their TurboStreams to the faster UltraStream 2000, and we see a progressive increase in shipments to larger printing companies.
Notably, UltraStream 2000 customers print, on average, 2 to 3 times higher volumes than our existing installed base, which will translate into higher post-sales revenue for Indigo." Indigo's net loss for the quarter was $3.5 million, compared with a net loss of $4.1 million for the first quarter of 2000. Loss per common share was $0.03, compared with $0.09 ($0.11 loss after cumulative effect of an accounting change), in the first quarter of 2000.
"While we are never satisfied reporting a loss in any quarter, we were able to report a lower loss than expected," noted Landa. "We remain optimistic about the rest of 2001 and expect to be break-even for the rest of the year, with an objective of achieving sustainable profitability by the end of this year. To date, the economic slowdown has not had any significant impact on Indigo's equipment sales. We will continue to closely monitor all of our market indicators for any signs of a slowdown in business."
First quarter net research and development (R&D) expenses decreased 9 percent to $4.4 million, compared with $4.8 million in the comparable quarter last year. Gross R&D expenses of $6.2 million reflect a consistent level of expenditures with the first quarter of last year. First quarter sales, general and administrative (SG&A) expenses increased 21 percent to $18.5 million from $15.3 million in the first quarter of 2000.
General and administrative expenses declined from the prior year as a result of effective cost controls while sales expense increased due to the additional resource
commitment the company made to its direct sales force. Indigo's chief financial officer, Alon Bar-Shany, commented, "This is the 15th quarter in a row that our operating revenues have grown compared to the same quarter in the previous year. We are beginning to see results from the new Distributor Channel management team that we put in place in the 2nd half of last year. Our indirect sales channels had a strong quarter, led by the performance in Latin America. The balanced product mix in the quarter, as well as the growth in our indirect channels, resulted in equipment gross margins of 36 percent for the quarter."
Mr. Bar-Shany added, "Our objective is for Indigo's revenue growth to exceed the growth rate forecast for our industry by leading industry analysts. We ended the quarter with a strong balance sheet, anchored by $84 million in cash and investments, utilizing only $10 million out of our credit facilities with Citibank and the leading Israeli banks."
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