X-Rite Grows Top Line by 13% and Reports 87% Increase in Operating Income Q2
Press release from the issuing company
GRANDVILLE, Mich.--July 22, 2004-- X-Rite, Incorporated, today announced its financial results for the second quarter ended July 3, 2004.
Second Quarter Highlights:
Record second quarter net sales of $31.8 million, up 13 percent over second quarter 2003.
Eighth consecutive quarter of year-over-year sales growth.
Gross margins were 66.3 percent, up 6 percent from the second quarter 2003.
Operating income increased by 87 percent from the second quarter 2003.
Acquired Moniga Gremmo S.r.l., an industrial and ink formulation software company based in Milan, Italy.
Launched seven new products under the Streamlined Color Management(TM) banner at Drupa, the world's largest International graphic arts expo, held in Germany in May.
The Company reported second quarter 2004 net sales of $31.8 million, an increase of 13 percent over the second quarter of last year. Operating income was $4.8 million for the quarter, compared with $2.6 million in the second quarter of 2003. Gross margins increased to 66.3 percent in 2004 from 62.6 percent in 2003, due principally to changes in product mix and lower manufacturing costs. Operating income was 15.1 percent of sales in the second quarter of 2004 as compared to 9.1 percent in the prior year period.
"We are very encouraged by the progress we have made in the first two quarters of 2004," said Michael C. Ferrara, Chief Executive Officer of X-Rite. "We recorded the highest level of second quarter sales revenue in the company's history and have now delivered eight consecutive quarters of growth. Further, we have been able to do so with a continued emphasis on margin improvement."
Ferrara continued, "During the second quarter, we continued to invest in engineering, sales, and marketing to support the launch of seven new products under the Streamlined Color Management(TM) banner. In addition, our acquisition of Milan-based Moniga Gremmo S.r.l positions the company to enhance our global product offering and grow our revenue base in the European market. As we move into the second half of the year, our focus is on meeting our global customers' needs and executing our product development strategy. We remain confident in our ability to deliver double-digit revenue growth and higher operating income throughout 2004 versus 2003."
"Our revenue growth continues to be strong, especially in Asia and Europe," said Mary E. Chowning, Chief Financial Officer. "Our continued ability to leverage our cost structure and control operating costs enabled us to increase our operating income by close to 90 percent in the second quarter."
The Company reported a net loss of $680 thousand or 3 cents per share in the second quarter of 2004 after a non-cash charge of $3.6 million (17 cents per share) related to Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (SFAS No. 150). SFAS No. 150 requires certain long-term liabilities be adjusted quarterly based on the Company's current stock price. These liabilities relate to the repurchase agreements with the Company's founders, the value of which was previously reflected as temporary equity prior to the implementation of SFAS No. 150.
"The Company reported net income, excluding the impact of SFAS No.150, of $3.0 million or 14 cents per share for the second quarter," continued Chowning. "This represents a 51 percent increase over the second quarter net income in 2003."
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