Presstek Reports Pre-3Q Results, Expects Greater Than Expected Loss
Press release from the issuing company
HUDSON, N.H., Oct. 10 - Presstek, Inc. a leading provider of direct digital imaging technology, today announced that based on preliminary financial data, it anticipates that revenue for the third quarter of 2001 will be in the range of that reported for the second quarter ended June 30, 2001 and in line with the company's prior expectations for the quarter. Sales of equipment based on our imaging technology continued at satisfactory levels, while consumable revenues continued to be impacted by economic conditions. Also, following unexpectedly high legal and warranty expenses, the company anticipates a greater than expected loss for the quarter.
In the company's investor call announcing financial results for the second quarter, the company indicated that it expected operating expenses to increase in the third quarter due to patent litigation and attendance at the Print '01 trade show. Preliminary third quarter figures now indicate that legal expenses for the third quarter were greater than expected. In addition, the company experienced significantly higher-than-expected warranty expenses in the third quarter for customer service on the company's new Dimension platesetter products. As a result, the company expects to report a loss in the range of ($.06) to ($.08) per diluted common share for the third quarter of 2001. Revenues for the third quarter are expected to be in the range of $25.5 million to $26.5 million.
Commenting on the company's new Dimension/Anthem CTP system, Presstek president and CEO Robert Hallman said, "While any new product offering brings increased warranty obligations, which we had anticipated, the support costs in the quarter necessitated by unanticipated product performance issues associated with our new Dimension product line were beyond our expectations. The expenditures associated with providing that support were necessary in order to keep our customers' needs filled and our relationships sound. We believe we have now solved the Dimension performance issues and substantially implemented the necessary field fixes and replacements. Accordingly, we expect warranty expenses should return to normal levels by the end of the year.''
"Although we are disappointed with the third quarter results, we are making good progress with the company-wide cost reductions that we implemented late in the third quarter, and we expect legal expenses to return to normal levels in the fourth quarter. In addition, we are pleased to report that the Print '01 trade show was successful for Presstek and its partners,'' said Hallman. "While the short term remains clouded by economic and global uncertainties, we believe Presstek's unique competitive advantages will enable us to take advantage of the opportunities for growth in the long term.''
Presstek will report its third quarter 2001 earnings on October 25, 2001. It will hold a live conference call and web cast on the same day to discuss the quarter's results and expectations for the future. Details of the conference call and web cast will be announced later.
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