Presstek Delivers Solid Financial Performance in Q1
Press release from the issuing company
HUDSON, N.H., April 29 -- Presstek, Inc., a leading provider of direct digital imaging technology, today announced financial results for the first quarter ended April 3, 2004.
The company reported consolidated net income of $1.9 million, or $.06 per basic and $.05 per diluted share in the first quarter of 2004, compared to $1.8 million, or $.05 per basic and diluted share, in the corresponding period in the prior year, and net income of $2.0 million, or $.06 per basic and diluted share in the fourth quarter of 2003. First quarter 2004 net income includes a $296,000 reversal of special charges, which were originally recorded in the last two years.
The company reported consolidated revenue of $23.3 million in the first quarter 2004, compared to $22.4 million in the same period a year ago, and $22.5 million in the fourth quarter of 2003. Equipment revenue for the first quarter was $9.7 million, up 35% from $7.2 million in the same period a year ago, and up 7% from $9.0 million in the previous quarter. Consumable revenue for the first quarter of 2004 was $13.0 million, down from $13.6 million in the corresponding period in the prior year, and up 5% from $12.4 million in the fourth quarter of 2003.
Revenue from Presstek's New Technology Business, which consists of all business other than the Quickmaster DI platform products, was $14.9 million in the first quarter of 2004, up 57% from $9.5 million in the corresponding quarter in the prior year, and up 11% from $13.4 million in the fourth quarter of 2003. New Technology equipment revenue increased 57% from the same period a year ago, and increased 10% from the previous quarter. New Technology consumable revenue was up 54% compared to the same period last year, and up 16% from the fourth quarter of 2003.
Presstek's President and CEO Edward J. Marino said, "We are very pleased with Presstek's financial results for the first quarter of 2004. More significant, however, was the continued growth of our New Technology Business. We delivered a solid quarter and at the same time continued the development of important new products specifically designed to further that growth."
Results for the first quarter of 2004 include a net operating loss of $1.4 million at the company's Lasertel subsidiary, compared to a net operating loss of $1.2 million in the same period a year ago, and a net operating loss of $800,000 in the fourth quarter of 2003. Lasertel recorded $540,000 in revenue from sales to external commercial customers in the first quarter of 2004, compared to $275,000 in the same period a year ago, and $722,000 in the fourth quarter of 2003.
Commenting on Lasertel's results, Presstek's Chief Financial Officer Moosa E. Moosa said, "Lasertel's results were impacted by the following: (a) we reduced the inventory of our ProFire laser diodes by approximately $600,000 in anticipation of the release of our newly announced ProFire Excel laser diodes; (b) the scale up for the new ProFire Excel diodes resulted in lower yields at Lasertel; and, (c) delivery to Lasertel's defense customer was reduced by approximately $200,000 during the quarter as a result of purchase pattern variations. We expect Lasertel's revenue and production efficiencies to return to more normal levels as 2004 progresses. On a more favorable note, Lasertel's recent purchase order from a new industrial customer is expected to bring nearly $1 million in revenue to Lasertel over the next twelve months."
Consolidated gross margins for the first quarter of 2004 were 38%, compared to 42% in the first quarter of 2003, and 41% in the previous quarter. This was primarily the result of lower absorption of labor and overhead resulting from the inventory reduction of old technology laser diodes, manufacturing scale ups, as well as the lowered Quickmaster DI platform sales. The company expects to see an improvement in gross margins as these issues are resolved.
Moosa continued, "In spite of the increased level of new product introductions scheduled for drupa 2004, operating expenses (being the sum of research & development and sales, general & administrative expenses) at $7.1 million were lower in the first quarter of 2004, compared to $7.5 million in the same period last year, and $7.4 million in the fourth quarter of 2003."
Commenting on Presstek's cash position, Moosa said, "We are pleased to again report that our balance sheet continues to be strong. The company generated $3.1 million in cash from operations in the first quarter of 2004. Cash and cash equivalents at the end of the quarter were $31.6 million, up from $20.6 million at the same time last year, and up from $28.2 million at the end of the fourth quarter of 2003. Total debt at the end of the first quarter of 2004 was down $535,000 from the previous quarter."
New Products and Technology
"Presstek has recently announced several new products and technologies which are scheduled for release at the drupa 2004 exposition in Dusseldorf, Germany, taking place May 6th through the 19th. The Dimension Excel, Presstek's next generation CTP platform, adds new capabilities and enhanced performance to Presstek's very successful Dimension line of platesetter products. Powered by our new ProFire Excel thermal imaging technology, the Dimension Excel is designed to offer higher quality imaging, new automation features and improved productivity. It is compatible with both our Anthem chemistry-free and Applause process-free thermal plates."
"This week we announced a new laser imaging platform for low cost, chemistry-free thermal CTP system development," said Marino. "The new SureFire laser imaging technology is an important advance in chemistry-free thermal imaging because it breaks down the cost barrier which, until now, has limited the smaller commercial and in-plant printers to primarily visible light imaging and polyester plate CTP systems. It opens a new market for Presstek's laser imaging and plate products, and provides the smaller printer with the price, quality, process and environmental benefits they are looking for."
Marino continued, "There is considerable excitement building around our on-press Direct Imaging line of products. First, through our various partners we are preparing for the introduction of two new DI press models -- a new high quality DI press and a new entry level DI press. Both of these presses will incorporate the ProFire Excel imaging system and both will be built on the Ryobi platform. These new DI presses will image a new improved DI plate that is optimized for use with ProFire Excel enabled DI presses. Second, in early April, Heidelberg announced that it intends to exhibit an enhanced Quickmaster Pro press containing Presstek's new ProSpot imaging technology."
Marino concluded, "We began a process some time ago to develop, and then deliver, new technologies and new products to expand the business and market opportunities for Presstek. The announcements you are seeing are all part of this process. This is a new Presstek. In this new world, we will continue to develop and deliver business opportunities to achieve our longer term growth objectives."
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