LOD, Israel, Feb. 26 -- NUR Macroprinters, a leading supplier of wide-format inkjet production printing systems, today announced that after more then two years, it has returned to profitability (on a non-GAAP basis) and a positive cash flow from operating activity in the fourth quarter ended December 31, 2003. The Company has also reported a positive cash flow from operating activity, such that in addition to an exercise of $2.0 million of a convertible stand-by loans, has raised cash levels above $11.0 million.
On a GAAP basis the Company reports a loss of $4.8 million, which includes extraordinary charges and write-off of inventory of $5.3 million. The Company believes that since the extraordinary charges and write-offs are related to its previously announced reorganization plan, they do not reflect the true current business of the Company.
The Company also reported that it had reached new agreements with its banks regarding loan covenants which better suits the Company's business plans going forward.
Revenues for the fourth quarter of 2003 were $18.2 million, compared to $19.5 million in the fourth quarter of 2002, and $17.1 million during the prior quarter. Excluding extraordinary charges and write-off of inventory of $5.3 million, operating profit in the fourth quarter of 2003 was $0.9 million and net income was $0.5 million or $0.03 per basic share, compared to an operating loss of ($1.1) million, excluding extraordinary charges and write- off of inventory of $15.7 million, and a net loss of ($1.4) million or ($0.08) per basic share in the fourth quarter of last year. Taking into account extraordinary charges and inventory write-off, results for the fourth quarter were an operating loss of ($3.7) million and a net loss of ($4.8) million or ($0.28) per basic share, compared to an operating loss of ($16.8) million and a net loss of ($17.1) million or ($1.00) per basic share in the fourth quarter last year.
Revenues for the full year 2003 were $65.6 million compared to $85.3 million in 2002. Excluding extraordinary charges and write-off of inventory of $24.1 million, operating loss in 2003 was ($1.6) million and net loss was ($3.6) million, or ($0.21) per basic share, compared to an operating loss of ($4.5) million in prior year, excluding extraordinary charges and write-off of inventory of $18.1 million compared to a net loss of ($6.0) million, or ($0.35) per basic share, in the prior year. Taking into account extraordinary charges and inventory write-off, results for 2003 included an operating loss of ($25.0) million and a net loss of ($27.7) million, or ($1.60) per basic share, compared to an operating loss of ($22.6) million and a net loss of ($24.1) million, or ($1.42) per share, in the fourth quarter 2002.
Dan Purjes, Chairman of the Board, commented, "In the past few months we brought in a new management team to NUR that has revitalized the Company. Led by CEO David Amir, the management team has tackled many difficult challenges and was able to complete the restructuring of the Company and to restore it to profitability. With improving business conditions the Company is well positioned to capitalize its energies on growth and profits. The Board is very pleased with NUR's progress and stands ready to provide it with whatever support is needed to ensure continued success."
David Seligman, Chief Financial Officer of NUR Macroprinters, commented, "The return to profitability and positive cash flow from ordinary business activities, as presented in our non-GAAP results, represents the completion of our transition and transformation period, and the return to our core mission of being the leading supplier of market-driven digital wide-format inkjet printing systems and services. We have completed the transfer of our U.S. headquarters from San Antonio Texas to the New-York metropolitan area; moved and integrated the U.S. based ink and machine production to Israel; replaced six of the top seven senior management positions around the world; and carried out major cost cutting and rationalization programs."
Seligman continued, "We now believe that our assets better suit our reorganized operations. NUR has dramatically improved its manufacturing capacity and has stabilized operations, including logistics and services, quality control and excellent product development. We have also reached a new agreements with our banks, regarding new loan covenants that better suite our business plan"
"We are on track in our plan to improve our financial performance. Our fourth quarter results, on a non-GAAP basis, are even better than expected and as guided in our conference call last October. We have attained continuing improvement in our operating profit, on a non-GAAP basis, and expect this trend to continue. We are also reporting an extraordinary charge and an inventory write-off of $5.3 million, resulting from the completion of the restructuring plan, including write-off of lease improvements to our former building in Boston and to a one-time non-cash charge of $0.7 million for a beneficial conversion feature of the convertible loan. NUR now believes that its reorganization is behind it and that it can go forward with its business plans," concluded Seligman.
David Amir, CEO and President of NUR Macroprinters, gave this assessment, "Since taking the position of CEO of NUR in April 2003, my emphasis has been on a return to positive cash flow, profitability and sales growth, in that order. We believe that we have achieved these objectives and we are now moving to the next stage: grow the business while improving cash flow and profitability."
Amir continued, "Our product lines have been streamlined and provide good answers to the variety our market requires: The Tempo is extremely well accepted worldwide, the Fresco has strengthened its position as the "industry workhorse" and the Ultima HiQ is being offered as a cost-effective production machine. We now manufacture all machines in one place, which provides reduced cost and greater flexibility.
Mr. Amir concluded: "During 2004, we plan extensive marketing activities in which we will introduce new products that address market needs as well as include exciting innovations for long term breakthroughs. These new products will be unveiled at trade shows during the second quarter 2004. We will participate in the "Sign UK" show in March, "ISA" (International Sign Expo. U.S.) show in April and DRUPA show (Germany) in May."
The Company also reported that it expects revenue in the first quarter 2004 to be $17 to $18 million, gross margins to be 40-41 percent and operating expenses to be $7 to $8 million. As a result it expects to show a nominal net profit or $0.00 per share in the first quarter 2004. For the full year 2004 it expects revenue to be $80 to $82 million, with similar gross margins and operating expenses of $29 to $32 million. As a result of financial and other expenses of $2.0 to $2.8 million, it expects to report a net profit of $2.0 to $2.5 million, or $0.08 to $0.12 cents per share, for the full year 2004.
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