Business News
Presstek Announces First Quarter 2008 Net Profit
Friday 09. May 2008 - Increased Gross Margins; Reduced Operating Expenses
Presstek, Inc. (NASDAQ:PRST) today reported a net income from continuing operations in the first quarter of 2008 of $0.2 million, or $0.01 per share, versus a net loss from continuing operations of ($0.9) million, or ($.03) per share, in the first quarter of 2007. First quarter 2008 results include pre-tax restructuring and other charges of $0.6 million related to the company’s Business Improvement Plan (“BIP”). First quarter 2007 operating results included pre-tax restructuring and other charges of $0.3 million.
On April 3, 2008, the company announced it expected revenue in the first quarter of 2008 to be as much as 20% below prior year levels, driven by reduced European revenues due to the disruption in the company’s European operations related to the company’s recently completed business reviews, U.S. economic weakness, and customer anticipation of a major industry convention in Germany in May 2008. As expected, first quarter revenue decreased $12.7 million or 19.5% to $52.4 million due to the above-mentioned issues.
“Despite a 19.5% revenue decline versus last year’s first quarter, the company reported gross profit only slightly below first quarter 2007 levels and positive earnings versus a loss in the same period a year ago,” commented Presstek President and Chief Executive Officer Jeff Jacobson. “In addition, we were pleased to see a 38% increase in DI plate sales in the quarter, and service margins of approximately 26%. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) adjusted for special charges was $3.4 million in the first quarter, and debt net of cash at March 29, 2008 was $22.1 million, a 40% improvement over last year at the same time. First quarter results demonstrate that our Business Improvement Plan has been successful in enhancing profitability. We continue to expect that revenue in the second quarter of 2008 will exceed first quarter levels, and gross profit and operating expenses will continue to reflect the ongoing positive impact of our Business Improvement Plan.”
Consolidated gross margin in the first quarter of 2008 was 34.5% versus 28.4% a year ago. Gross margin improvements were driven by the positive impact of the company’s BIP. In addition, the company’s higher margin consumables and service annuity businesses represented a greater proportion of total sales in the quarter which had a positive impact on gross margin. First quarter 2008 operating expenses declined $1.5 million to $17.3 million in the quarter versus $18.8 million in 2007. Excluding restructuring and other charges, operating expenses declined 9.8% year over year.
Lasertel’s external sales were $1.6 million, slightly below year ago levels largely due to the timing of orders. Lasertel recorded an operating loss in the first quarter of $1.0 million.
The company also announced it has reached an agreement to sell its Lasertel property in Tucson, Arizona. The company expects this transaction to close during the third quarter of 2008.
The company also announced that its Annual Meeting of Stockholders will be held on Wednesday, June 11, 2008, commencing at 1:30 P.M. local time, at the Waldorf Astoria, 301 Park Avenue, New York, New York.
“As I complete my first year as President and Chief Executive Officer of Presstek,” Mr. Jacobson concluded, “I recognize that there’s still a great deal of work ahead of us, but I am also pleased with the substantial progress we have made. Our business reviews are complete; our BIP is executing well; and debt net of cash has significantly improved. Our leadership team is excited at the prospect of driving long-term revenue growth, leveraging our improving operating structure and delivering increased profitability.”
Information Regarding Non-GAAP Measures
In the first quarter of 2008, in addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the company provides non-GAAP financial measures, including debt net of cash, which is defined as debt minus cash, and other GAAP measures adjusted for certain charges, which the company believes are useful to help investors better understand its past financial performance and prospects for the future. A full reconciliation of GAAP to non-GAAP measures is provided in the financial tables below. Supplemental financial information has been provided with this release to provide additional details on the company’s performance.