iPrint Reports Q3 Results: Continues Cost Reduction, Top Execs Take Pay Cut
Press release from the issuing company
REDWOOD CITY, Calif., Oct. 29, 2001 -- iPrint Technologies, inc., the leading online printing technology and infrastructure provider, today announced revenues of $1.6 million for the third fiscal quarter of 2001. Pro forma net loss for the third quarter was $3.4 million, or $0.11 per share, compared with a pro forma net loss of $3.5 million, or $0.12 per share, in the second quarter of 2001, and a pro forma net loss of $6.7 million, or $0.23 per share, in the third quarter of 2000.
On a comparative basis, the pro forma net loss for the third quarter beat the unrevised First Call consensus estimate of a net loss of $0.13 per share by $0.02. Pro forma net loss and pro forma net loss per share excludes non-cash compensation charges and corporate restructure costs.
"In Q3, we put energy into reorganizing in preparation for our merger with Wood Associates,'' stated Royal P. Farros, Chairman and CEO of iPrint Technologies, inc. "We are pleased to say that iPrint and Wood shareholders have approved the merger and the transaction should close within the week. We expect to see a big jump in Q4 revenues as a result.''
On October 25, 2001, iPrint announced that its stockholders had approved a proposal for iPrint to merge with Wood Associates, one of the leading suppliers of custom imprinted promotional items and marketing programs to the Fortune 1000. With 19 offices nationwide, Wood Associates services over 200 Fortune 1000 enterprise customers, including AOL Time Warner, BP, Charles Schwab, and Compaq.
"We've already begun making sweeping changes within our organization, particularly in our sales and operating infrastructures where we believe we will see a lot of leveraged operating benefits and cost savings,'' continued Farros. "With Wood's presence in the Fortune 1000, this combination gives iPrint Technologies a much stronger base to service the enterprise marketplace.''
Cash, short-term investments and short-term restricted cash totaled $12.0 million as of September 30, 2001, compared to $18.2 million as of June 30, 2001. Including secured, long-term notes payable to the company on demand as of September 30, 2001, the total is $12.9 million compared to $19.1 million as of June 30, 2001. As of September 30, 2001, there were approximately 30.2 million shares of common stock outstanding.
"In addition to the infrastructure changes we're making, our executive team will be taking a 10% salary reduction and we'll be suspending any executive cash bonus programs from the merger date throughout Q4,'' added Farros. "We will also implement a mandatory time-off policy for appropriate personnel through the Thanksgiving and year-end holiday weeks. We will continue these and other aggressive cost-cutting activities--while simultaneously focusing on just the strongest areas of our business--until we achieve our most important goal: Profitability.''
Other Third Quarter Highlights
- Gross margin was 37% compared to 31% in Q3 2000.
- Performed additional cost cutting actions at the end of Q3,
including reducing headcount from 80 at the end of Q2 2001 to 68 at
the end of Q3 2001 and vacating the Menlo Park, CA facility.
- Delivered proxy statement/prospectus to shareholders with detailed
information about the proposed merger transaction with Wood
- Executed Strategic Development Agreement with Wood Associates that
allowed iPrint to begin integrating technology platforms while
awaiting shareholder approval.
Previous guidance contemplated the merger transaction being concluded by the end of Q3. The merger is now expected be consummated on October 31, 2001. As a result, the company believes fourth quarter operating results will include two months of joint operation, not three. On a pro forma basis, the company believes revenues will be up significantly in Q4 to $8 million as compared to $1.6 million in Q3 and loss per share will remain flat to slightly higher as compared with Q3.
Because of the delayed merger timing, the company is revising annual guidance to $15.5 million as compared to previous low end guidance of $22.5 million and a pro forma net loss per share of $0.52-$0.55 as compared to $0.45-$0.50.
The company believes it has appropriate cash reserves to reach profitability.
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