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Baldwin Reports Fiscal 2001 Year-End Results, Tough Year Despite Restructuring

Press release from the issuing company

SHELTON, CT--August 22, 2001--Baldwin Technology Company, Inc. (ASE:BLD) announced today a net loss for the fiscal year ended June 30, 2001, prior to writing-off goodwill and assets associated with the divestiture of certain businesses, of ($1,502,000) or ($0.10) per diluted share. This compares to net income of $4,836,000, or $0.31 per diluted share, for the prior fiscal year. The results for this year include an additional pre-tax charge associated with the previously announced restructuring plan of $2,276,000, and a pre-tax charge associated with management organization changes of approximately $1,400,000. The company announced on July 23, 2001 that it had signed a purchase and sale agreement to divest its Roll Handling Group. The sales price is approximately $10,000,000. Goodwill and asset write-offs associated with this transaction, and the Print On-Demand Group, added ($12,517,000), or ($0.85) per diluted share, to the loss. Consequently, the company's reported net loss for the period ended June 30, 2001 was ($14,019,000), or ($0.95) per diluted share. Net sales for the current year were $183,615,000 compared to $198,602,000 for the prior year. Currency translation impacts related to the strong U.S. dollar decreased net sales by $14,676,000 and increased the net loss by $581,000 ($0.04 per share), compared to the prior year. The net loss for the three months ended June 30, 2001, excluding the impact of the goodwill and asset write-offs but including the aforementioned restructuring and management charges, was ($3,641,000), or ($0.25) per diluted share, as compared to net income of $1,905,000, or $0.13 per diluted share, for the quarter ended June 30, 2000. Including the impact of the goodwill and asset write-off, the net loss was ($16,158,000), or ($1.10) per diluted share. Net sales for the quarter were $45,322,000 compared to $50,886,000 for the quarter ended June 30, 2000. Currency translation decreased net sales by $4,665,000 compared to the prior year, while the impact on the net loss was negligible. Excluding the impact of the previously divested Stobb operation, orders for the year and quarter ended June 30, 2001 were $179,186,000 and $39,204,000, respectively, compared to $191,885,000 and $43,488,000 for the prior year periods. Backlog at June 30, 2001 was $61,126,000 versus $60,448,000 at June 30, 2000. Currency translation resulted in decreased orders and backlog for the year ended June 30, 2001, of $14,336,000 and $4,869,000 respectively when compared to the prior year. Gerald A. Nathe, Chairman and CEO, commented: "Fiscal 2001 was a difficult and disappointing year for Baldwin. The year started well during our first quarter, but a slowness in orders that became apparent in November and December in the Americas never changed as the year progressed, especially in the commercial sheetfed market. While most of Baldwin's global operating locations adjusted to the changing economic environment and had comparable or improved performances in comparison to the prior year on a local currency basis, one domestic location performed poorly as a result of a sharp sales decline, and one European operation experienced difficulty with a new product design." John T. Heald, President and COO noted: "Recognizing that it is likely that there will be continuing weakness in our markets for the next six to nine months, we are actively pursuing profit improvement initiatives on several fronts. Cost reduction efforts have been significantly reinvigorated with a focus on facility consolidation, cost containment, product standardization and productivity improvement. At the same time, we are stepping up substantially the level of our sales and marketing activities to increase our revenue levels during these slow times, in both our traditional markets as well as in new market segments such as packaging."