Presstek Releases Q4 Financial Results; 2012 Outlook PositiveMarch 15, 2012
GREENWICH, CT—March 15, 2012—Presstek Inc. (NASDAQ: PRST), a leading supplier of digital offset printing solutions to the printing and communications industries, today reported financial and operating results for the fourth quarter and fiscal year ended Dec. 31, 2011.
In the quarter, the company reported total revenue of $29.8 million compared to $31.1 million in the fourth quarter of 2010, and adjusted EBITDA of negative $0.9 million compared to $0.6 million in the prior year fourth quarter.
For 2011, the company reported total revenue of $120.0 million compared to $128.6 million for 2010, and adjusted EBITDA of negative $1.4 million compared to $4.0 million for the prior year.
In the fourth quarter of 2011 the company had a net loss of $3.8 million, or $0.10 per share, compared to a net loss of $6.7 million, or $0.18 per share, in the prior year quarter. The fourth quarter of 2010 included a $2.7 million valuation allowance against certain deferred tax assets outside the United States, as well as a $1.9 million expense related to a bad debt reserve established for a single customer. For 2011 the Company had a net loss of $12.4 million, or $0.33 per share. The company's 2010 net loss from continuing operations was $10.6 million, or $0.29 per share.
"Presstek faced another challenging year in 2011, as adverse economic and industry conditions continued to negatively impact print volumes," said Stanley E. Freimuth, Presstek's Chairman, President and CEO. "However, we were pleased with activity in the fourth quarter. We had previously reported that we expected fourth quarter revenue and gross margin dollars to be flat relative to third quarter numbers, and our results were better than expected. With the significant cost reductions that we implemented at the end of 2011, we expect adjusted EBITDA to be positive for 2012."
Fourth Quarter 2011 Financial Results Total revenue in the fourth quarter of 2011 was $29.8 million, a decrease of $1.2 million from the fourth quarter of 2010.
- Equipment revenue increased $0.5 million, to $6.0 million, in the fourth quarter of 2011 compared with the same prior year period due to a favorable mix of DI press sales.
- Consumables revenue totaled $18.1 million in the fourth quarter of 2011 compared with $19.5 million for the same period last year due primarily to reductions in legacy product categories.
- Service revenue declined $0.3 million in the fourth quarter of 2011 compared to the year ago quarter due to lower contract service and parts revenue.
Gross margin percent for the fourth quarter of 2011 was 25.0 percent compared to 31.9 percent in the fourth quarter of 2010. Lower margins were primarily the result of a lower mix of higher margin consumables revenue, a stronger yen, and unabsorbed manufacturing overhead in our factories resulting from lower overall production.
Total operating expenses in the fourth quarter were $10.5 million, compared with $13.3 million in the prior year period. Operating expenses, excluding special charges, declined by $3.8 million, or 29 percent, from the fourth quarter of 2010. The decline in operating expenses was primarily related to reduced payroll and other costs resulting from recent cost reduction initiatives, as well as reduced bad debt and stock compensation expenses. (See "Information Regarding Non-GAAP Measures")
2011 Financial Results Total revenue in 2011 was $120.0 million, a decrease of 6.7 percent, or $8.6 million, from 2010.
- Equipment revenue decreased 3.1 percent to $20.7 million in 2011 compared with last year. The Company did, however, sell five 75DI presses on three different continents during the year.
- Consumables revenue totaled $76.3 million in 2011 compared with $82.3 million for the prior year resulting from general declines in our plate and consumables product lines.
- Service revenue declined 7.6 percent, to $23.0 million in 2011 compared to the prior year primarily due to a decline in our analog service customer base.
Gross margin percent for 2011 was 28.9 percent compared to 32.6 percent in 2010. The reduction was primarily the result of unfavorable equipment and consumables product mix, a stronger yen, and unabsorbed manufacturing overhead in our factories.
Full year 2011 operating expenses of $44.8 million represented a reduction of $3.9 million from the prior year. The decline in operating expenses was primarily attributable to the Company's cost reduction activities and lower stock compensation expense, partially offset by higher restructuring charges of $1.3 million.
"As a result of the additional cost actions taken during 2011, all of which will be fully reflected beginning in the first quarter of 2012, Presstek has positioned itself to benefit from the favorable impact of an improving market," said Arnon Dror, Presstek's Vice President, Chief Financial Officer and Treasurer. "With the worst of the economic downturn hopefully behind us, we expect that our reduced cost structure will help drive enhanced bottom line results in 2012."
"In May we will be showcasing our 75DI press for the first time on a worldwide stage at the Drupa trade show in Dusseldorf, Germany," said Freimuth. "We are excited for the world to see the capabilities of this dynamic and versatile press. The technology in Presstek's DI presses is truly remarkable, and has come a long way since the DI press was first introduced many years ago. The 75DI is the only press on the market that can go from digital file to saleable sheet in six minutes and print at 16,000 impressions per hour. It is also the most economical press in the market for four or more color jobs with run lengths between 500 and 20,000 impressions, which is the range of most jobs being run today. We will be driving this message harder to the market to create more opportunities for Presstek as the printing industry recovers from the effects of the economic downturn."
Presstek Inc. is a leading supplier of digital offset printing solutions to the printing and communications industries. Presstek's DI(R) digital offset solutions bridge the gap between toner and conventional offset printing, enabling printers to cost effectively meet increasing customer demand for high quality, short run color printing with a fast turnaround time while providing improved profit margins. The Company's CTP portfolio ranges from two-page to eight-page systems, many of which are fully automated. These systems support Presstek's line of chemistry-free plates as well as Aeon, a no preheat thermal plate which offers run lengths up to one million impressions and PhD 830, a high resolution preheat, thermal CTP plate that offers run lengths of one million and more impressions. Presstek also offers a range of workflow solutions, pressroom supplies, and reliable service. Presstek is well positioned to support print environments of any size on a worldwide basis.