Creo Completes Acquisition of Plate Manufacturing Facility, Confirms Guidance
Press release from the issuing company
VANCOUVER, British Columbia--Dec. 8, 2003-- Creo Inc. has completed the acquisition of a printing plate production facility from First Graphics (Pty) Limited for a final purchase price of US$11.34 million in cash. The acquisition was first announced on September 15, 2003 along with the launch of the company's own thermal printing plate and the expansion of its digital media strategy.
"Our first priority in fiscal 2004 is to aggressively pursue our digital media strategy," stated Amos Michelson, Creo chief executive officer. "This acquisition provides us with secure, wholly-owned manufacturing capacity to supplement our out-sourced manufacturing and serve our customers worldwide. The facility has a modern plate manufacturing line installed in 2001, which is already producing the Creo PTP plate. We believe this manufacturing capacity will be a key part of our growth in 2004 and beyond."
Mr. Michelson continued, "Through the expansion of our digital media strategy, we have opened an important opportunity for profitable growth. We expect the proportion of transactions in which Creo provides a complete solution, including our computer-to-plate (CTP) systems and our competitively-priced plates, to increase over time. This capability is particularly important to our continued penetration of the growing market of mid-sized and smaller commercial printers."
As part of the acquisition, Creo will receive over 10 acres of land and approximately 151,000 sq. ft (14,000 m2) in manufacturing and storage facilities located in Pietermaritzburg, South Africa. The manufacturing facility employs approximately 150 people.
"We expect this acquisition to be accretive to our earnings by the 2004 fiscal second quarter," stated Mark Dance, chief financial officer and chief operating officer of Creo. "Our guidance for the 2004 fiscal first quarter remains the same with revenue between $148 million and $153 million and GAAP earnings per diluted share between 19 and 25 cents. As we said in our recent quarterly conference call, we continue to control our cost structure. As part of those efforts, we have delayed some expected project ramp-ups and marketing expenses and have deferred our annual employee compensation review by up to six months. These actions have been undertaken in order to maximize operating leverage as our digital media sales grow through the next several quarters."
First Graphics will continue to act as the exclusive distributor for Creo products in South Africa.
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