ImageX Reports Year-end Results, Optimistic Despite $24 Million Loss
Press release from the issuing company
KIRKLAND, Wash., Jan. 31 - ImageX announced record annual revenues of $56.5 million for the year ended December 31, 2001, compared with revenues of $50.7 million last year. Revenues for the fourth quarter ended December 31, 2001 were $13.5 million, compared with revenues of $19.5 million for the same period last year.
ImageX president and CEO Rich Begert noted that progress this quarter confirms the company's path to cash flow break-even by the first quarter of 2003. "The combination of revenue recovery and excellent cost performance in the fourth quarter illustrates that we know what is required to meet or exceed our goals -- in spite of unpredictable economic conditions,'' Begert added.
"Enhancements to the ImageX Print System helped deliver cost improvements during the quarter and contributed to improved bottom-line performance,'' Begert said. "The ImageX Print System is the only fully automated distributed purchasing, inventory management and distribution system for print in the country, as well as a state of the art production system for file transfer and prepress applications.''
"With five patent Notices issued and 46 additional U.S. patents pending in the print arena alone, we are the only entity in our industry with technologies to support very large corporate re-branding programs as well as comprehensive delivery of customized corporate stationery products. We have been anxiously awaiting these Notices, which provide a foundation from which to offer fully-automated customization and purchasing of sales and marketing materials online as well,'' added Begert.
For the year ended December 31, 2001, the company reported a cash operating loss of $24.0 million, or ($0.83) per basic and diluted share, based on 28.8 million weighted average shares outstanding, again surpassing analyst expectations. For the same period last year, the company reported a cash operating loss of $35.9 million or ($1.53) per share, based on 23.5 million weighted average shares outstanding.
For the fourth quarter ended December 31, 2001, the company reported a cash operating loss of $3.2 million, or ($0.10) per share, based on 30.7 million weighted average shares outstanding, versus analyst estimates for the fourth quarter 2001 of ($0.13) per share. This compares with a cash operating loss of $9.1 million, or ($0.35) per share, based on 26.2 million shares outstanding for the same period last year.
Including non-cash items, the company's 2001 full year net loss was $39.9 million, or ($1.39) per share, compared with $47.5 million, or ($2.02) per share for 2000. For the fourth quarter ended December 31, 2001, the company's net loss, including non-cash items, was $6.5 million, or ($0.21) per share, on 30.7 million weighted averages shares outstanding compared with a net loss of $12.8 million, ($0.49) per share, on 26.2 million weighted average shares outstanding, for the same period ended December 31, 2000.
ImageX reported record gross profit, up 16.1 percent, at $19.5 million for the year ended December 31, 2001, compared with gross profit of $16.8 for the prior year. Gross profit for the fourth quarter of 2001 was $4.9 million. Gross margin improved to 34.5 percent for the year ended 2001 compared with gross margin of 33.1 percent for the year 2000. Total operating expenses before depreciation, amortization, loss on disposal of assets, and the write-off of IPRD were $44.3 million for the full year 2001 compared with $56.4 million for 2000, a decline of 21.4 percent. Fourth quarter cash operating expenses fell over 10 percent when compared against the previous quarter. The company reported cash and cash equivalents of $17.4 million at December 31, 2001 compared with $20.2 million at September 30, 2001 and $40.4 million at December 31, 2000.
Chief Financial Officer, Robin L. Krueger, said, "We are reaffirming our profitability goals and have a solid record of meeting bottom line projections. Our goal of achieving cash flow break-even by no later than the first quarter of 2003 remains and we have more than adequate cash resources to achieve that goal.''
The company cited several major initiatives that supported the company's progress over the past year and quarter:
* Revenue and expense results support push to profitability. Building on existing customer relationships, revenues were up 6 percent in the fourth quarter and operating expenses fell 10 percent compared to the third quarter of 2001. "Compared to the fourth quarter last year, operating expenses declined over 50 percent, Begert said. ''And represented the fifth consecutive quarterly decline in operating expenses." Much of the success in expense reductions during the fourth quarter resulted from actions taken earlier in the year. ''In addition, we have clearly identified other reductions, such as consolidation of leased spaces at our corporate headquarters and other facilities, which will contribute significant cost reductions in the quarters ahead," Begert added. As of December 31, 2001, total team members were 459.
* High volumes and repeat customers build momentum. The company shipped over 200,000 orders in 2001 to more than 18,000 locations at an error rate of less than one-quarter of one percent. Most of the fourth quarter revenue growth was from the Company's largest customers and 34% of revenues were from Fortune 1000 - ranked customers. Retention of major customers remains high with five major relationship renewals in the fourth quarter.
* Five patent notices affirm ImageX's foothold as the premier provider of automated print system technology. The U.S. Patent and Trademark Office issued five Notices of Allowance on ImageX's automated print production technologies making ImageX the only print service provider with a developing patent portfolio. Specifically, these patent filings cover the automation of the hosted prepress printing process, as well as the conversion of a Bitmap or PDF file to a Postscript file format or the conversion of a Postcript to a PDF file, within an automated printing system. With these patents in place, ImageX will be the exclusive owner of the print file conversion processes within an automated print system used by most print service providers in the country. Additional notices are expected this year on ImageX's remaining 80 patent filings.
* New software developments continue at Extensis. Two new product releases highlighted activities at the Company's software division, Preflight Online Digital Ad Delivery and Suitcase 10 for Mac® OS X. The Preflight Online Digital Ad Delivery system, which garnered a "Top 10 ASP'' designation from the Aberdeen Group, expedites receipt of digital ads for printers and publishers, enabling error-free printing. Suitcase 10 is the market leader in workgroup font technology.
* Major B2B initiatives support enterprise-wide ImageX Print System adoption. To support enterprise-wide implementations of the ImageX Print System, ImageX added integration with electronic purchasing systems such as Oracle, SAP and PeopleSoft, and corporate legacy systems, in addition to its long-offered compatibility with Ariba and Commerce One. This means that the ImageX Print Systems can integrate seamlessly with electronic purchasing systems for 95 percent of Fortune 1000-rated companies. The company recently linked significant customers ADP, Merck, Ariba and Unocal to this new B2B platform.
"Our current plans provide for cash flow break-even within the next year,'' stated Krueger. "As a consequence of economic conditions during 2001, revenue growth was slower than anticipated but we still exceeded our original loss per share goals.'' For 2002, we expect revenue to grow approximately 10-15 percent compared with 2001, reaching between $62 and $65 million. First quarter revenues are expected to be approximately $14 million. Cash operating expenses are expected to continue declining with total cash losses for the year of less than $8 million. Cash balances at the end of 2002 are expected to exceed $10 million.
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