Editions   North America | Europe | Magazine


Creo Expects 4Q Loss of $5-$10 Million, Includes Write-downs of Certain Assets

Press release from the issuing company

VANCOUVER, B.C.--Oct. 11, 2001--Creo Products Inc. today revised expectations for the fourth quarter and fiscal year ending September 30, 2001, reported in U.S. dollars under Canadian GAAP. Based on preliminary information, Creo anticipates revenues for its fourth quarter ending September 30, 2001 to be in the range of $140 to $145 million compared to earlier guidance of $145 to $150 million. The preliminary results reflect continued weakness in the global economy as well as the impact of the September 11th tragedy late in the quarter. The company now expects an adjusted loss from operations of between $5 and $10 million, and an adjusted loss per share of between $0.10 and $0.20. This excludes the effects of severance costs of $4 million related to personnel reductions announced in August 2001 and $19 million in the amortization of goodwill and intangibles. Also excluded are one-time write-downs of $10 million (after tax) of accounts receivable, obsolete inventory and other assets; $266 million of goodwill and other intangibles; $70 million of investments; and $16 million of future tax assets. These revised estimates are based on preliminary unaudited information and may be subject to change. "The primary reason for the shortfall in our results is the greater than expected weakness in global economic conditions while shifts in our product mix also contributed to reduced gross margins,'' stated Amos Michelson, Creo's chief executive officer. "We are committed to our business strategy, which includes implementing the efficiency measures announced in August, and investing in areas such as R&D and customer focused activities in order to enhance our market leadership. We believe our new strategic initiatives, especially our entry-level product lines and consumable relationships, will begin to have an effect in Q1. We remain confident in the health of our business.'' These write-downs will include goodwill and intangible assets associated with the acquisition of Carmel Graphics Systems Inc., Intense Software Inc. and the prepress division of Scitex Corporation Ltd.; and investments in printCafe, Inc. and Creo Ltd. "In accordance with our year-end review of our balance sheet, we determined these adjustments were necessary,'' stated Mike Graydon, Creo's chief financial officer. "These adjustments do not reflect the strength of our overall business. Creo remains in a strong financial position with virtually no debt and a cash balance of over $60 million.'' For the fiscal year ending September 30, 2001, the company expects revenues in the range of $653 to $658 million. Excluding business integration costs, amortization of goodwill and intangible assets, and one-time write-downs, adjusted earnings will be between $22.7 to $27.7 million, and adjusted earnings per share of between $0.45 to $0.55. "We remain very positive about our product offering and continue to develop products critical to our customers' success,'' Amos Michelson continued. "Even in this challenging economic environment, we see continued customer demand for our broad array of products and services. While a cautious economic outlook continues for the short term, recent successes lead us to believe our fiscal first quarter 2002, ending December 31, 2001, will show improvement over the fourth quarter 2001.'' Additional details regarding the fourth quarter and fiscal year-end results will be communicated on Monday, November 19, 2001 after market close when the company announces its financial results for the quarter and fiscal year ended September 30, 2001.

WhatTheyThink is the official show daily media partner of drupa 2024. drupa Event Coverage | drupa daily programs