Presstek Reports 1Q: No Clear Uptick in New Equipment Spending
Press release from the issuing company
-- Record consumable plate revenues achieved --
HUDSON, N.H., April 25 -- Presstek, Inc., a leading provider of direct digital imaging technology, today announced financial results for the first quarter ended March 30, 2002.
Presstek's revenues for the first quarter ended March 30, 2002 decreased 19.4% to $20.8 million from $25.8 million in the same period a year ago. Net income for the first quarter of 2002 was $183,000, or $.01 per diluted share, compared to $973,000, or $.03 per diluted share, for the first quarter of 2001.
Revenues for the quarter consisted of product sales of $19.4 million and $1.5 million of royalties and fees from licensees, compared with product sales of $23.7 million and $2.1 million of royalties and fees from licensees in the corresponding quarter last year. Plate media revenues for first quarter 2002 were a record $13.7 million, up 9.6% from $12.5 million in the first quarter of 2001. Equipment revenues for the first quarter were $5.7 million, compared to $11.2 million in the same period a year ago. Lasertel did not record any external revenues during the first quarter.
The company's equipment revenue shortfall was experienced across all products, including imaging kits, press and CTP products. Sales continued to be weak in the first quarter based, in part, on the slowdown in capital spending worldwide, Heidelberg's realignment of its production and inventory levels, and the lack of any significant sales from Xerox. This has been offset somewhat by sales to Ryobi and KBA.
Commenting on the first quarter, President and Chief Executive Officer Edward J. Marino said, "Our core consumables business has taken an encouraging turn, with stronger demand than in the fourth quarter. We have not yet, however, seen clear signs that our capital equipment business has experienced a recovery."
Gross margins for the current quarter were 39%, down from 40% in the corresponding quarter last year, but up from 38% in the fourth quarter of 2001. Gross margins have continued at these levels primarily as a result of a favorable product mix.
The results for the quarter include a $530,000 benefit from the workforce reductions completed in January. The company expects to see a benefit of $650,000 from the reductions in subsequent quarters.
The company's Lasertel operations continued to incur operating losses for the quarter. Lasertel's operating loss before inter-company interest charges was $1.6 million, down substantially from $2.8 million in the corresponding quarter in the prior year. Marino said, "We are continuing to focus on operating performance and targeted opportunities at Lasertel."
During the quarter, the company generated $6.8 million in cash from operations and working capital. As a result, cash and cash equivalents at the end of the quarter were $7.8 million, up from $2.5 million at the end of fiscal 2001. The company has also repaid its revolving line of credit during the quarter. Regarding the balance sheet, Marino said, "We continue to have a strong balance sheet, but need to work on our current high level of inventories. Reducing inventories continues to be a special focus within the organization."
Marino added, "Moosa E. Moosa, Presstek's new chief financial officer, and I have only been on the job for a few weeks, and we are critically reviewing all aspects of our business for optimization. Trends in the industry favor Presstek's fundamentals of digital workflows, direct laser imaging, chemistry- free processes, and more color. We also have key alliances that support our marketing, product and technology efforts. We are confident that all of these factors can be translated into increased market share and improved financial performance. We are, however, in the early stages of the review process and until we get our arms around the entire Presstek outlook, we prefer to limit our guidance regarding second quarter prospects. We plan to keep the shareholders and the financial community fully advised as we progress." Marino continued, "Looking ahead, prospects for the future are bright, but clearly we have work to do now."
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