NUR Macroprinters Reports 12% Revenue Growth in Q4
Press release from the issuing company
LOD, Israel--July 11, 2005-- NUR Macroprinters Ltd., a leading supplier of wide-format inkjet production printing systems for the out-of-home advertising market, today reported its unaudited financial results for the fourth quarter ended December 31, 2004 and audited financial results for the full year ended December 31, 2004. NUR also reported today its preliminary unaudited financial results for the first quarter ended March 31, 2005.
"With the release today of our financial results, we have made another step in our multi phase plan to bring NUR closer to a position of financial stability and prosperity. We now face the task of negotiating a financial transaction intended to strengthen our cash position and improve our financial stability," said David Amir, President and CEO. "We are proud to report a 12% growth in annual revenue which is supported by our strong product portfolio. Our next objective is to increase our market presence and emphasize our customer services. Throughout fiscal year 2004 and the first quarter of 2005 we have commenced development of the next generation of our products and technologies. We believe that these next generation products will strengthen our position in our current markets and will allow us to address additional markets which we believe offer significant growth potential."
These financial results include a previously announced write-off of $18.5 million of assets from the December 31, 2004 balance sheet. This figure primarily consists of a $9.7 million inventory write-off and a $6.3 million write-off of various receivables, both of which are related to the decision to cease selling the Ultima/Salsa product lines. The balance of $2.5 million consists of a write-off of a deferred tax asset that is also being restated back to 2003, intangibles assets and increase of accrual for liabilities.
NUR is also announcing its decision to change its revenue recognition policy to better suit the business environment in which it is operating. As a result of this change, NUR has reviewed its prior year's financial reports and has restated its financial reports for the years 2002 and 2003. NUR previously recognized revenue from sales of equipment when persuasive evidence of an agreement existed; the product was delivered and title and risk of loss were passed to the buyer; the sales price was fixed and determinable; no further obligations existed; and collectibility was probable. The new revenue recognition policy reflects the importance of the installation of equipment sold as part of the delivery process. NUR's new revenue recognition policy calls for revenue to be recognized when persuasive evidence of an agreement exists; the product has been delivered and installed, title and risk of loss have passed to the buyer; the sales price is fixed and determinable, no further obligations exist, and collectibility is probable. NUR does not grant a right of return. As a result of this change in its revenue recognition policy, NUR has deferred $13.3 million in revenue which under prior policy would have been recognized during 2004, and under the new policy will be deferred until installation is completed. The inventory has increased by $6.8 million associated with these deferred revenue the balance of $6.5 million of gross profit was deferred until installation is complete. The effect of this change in the revenue recognition policy on the net income for the years 2002 and 2003 is $479,000 and ($572,000) respectively.
Revenues for the fourth quarter of 2004 were $19.5 million, a 9% decrease compared to $21.4 million in the fourth quarter of 2003 (reflecting the restatement of revenue for the prior year). Operating loss in the fourth quarter of 2004 was $20.1 million and net loss was $21.5 million or $0.82 per share. Operating loss and net loss for the fourth quarter of 2003 (reflecting the restatement of income statement for prior year) was $2.2 million and $3.3 million or $0.19 per share, respectively.
Revenues for the full year 2004 were $76.7 million, a 12% increase compared to $68.7 million in the year 2003 (reflecting the restatement of revenue for the prior year). Operating loss in the full year 2004 was $19.0 million and net loss was $22.5 million or $0.93 per share. Operating loss and net loss for the year 2003 (reflecting restatement of income statement for prior year) was $23.6 million and $27.2 million or $1.57 per share, respectively.
"We have adjusted the company's revenue recognition policy to better suit the business environment in which we are operating. From our experience in the past two years, we have concluded that the completion of installation is indeed the key indicator to a successful deal and therefore we feel that this is the most appropriate measurement for revenue recognition," said David Seligman, Chief Financial Officer. "In addition, the major write-off of old account receivables and inventory resulting from old product lines, marks a new era of focusing on our newer product lines and future developments."
The release of NUR's financial results follows reaching a previously announced agreement with NUR's lender banks not to accelerate its outstanding bank debt and implementation of a plan to lower operating costs and preserve cash. NUR's outstanding bank debt will come due in January 2006 absent an agreement with its lender banks to modify the maturity of its outstanding bank debt. NUR believes that the steps it has recently taken to reduce operating costs, together with its backlog of orders and active sales prospects it is pursuing, will enable the Company to return to profitability and positive cash-flow. However, because there can be no assurance that NUR will be able to enter into an agreement with its lender banks regarding the restructuring of its outstanding bank debt and because there can be no assurance that NUR's plans for reducing operating costs and increasing revenues will be effective, NUR's financial statements include a going concern qualification.
NUR also reported today its preliminary unaudited results for the first quarter ended March 31, 2005. Revenues for the first quarter of 2005 were $18.4 million. Operating loss in the first quarter of 2005 was $0.4 million and net loss was $1.4 million or $0.05 per share. Operating profit and net profit for the first quarter of 2004 (reflecting the restatement of income statement for prior year) was $3.7 million and $2.4 million or $0.12 per share, respectively.
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