Presstek Reports Improved Sequential First Quarter 2011 Revenue and ProfitMay 9, 2011
First Quarter 2011 Financial Results Total revenue in the first quarter of 2011 was $31.9 million, up $0.8 million from the previous quarter and a decrease of $2.6 million from the first quarter of 2010.
• Equipment revenue decreased $1.3 million, to $5.1 million in the first quarter of 2011, compared with the same period last year.
• Consumables revenue totaled $20.7 million in the first quarter of 2011, compared with $21.5 million for the same period last year, as bad weather across much of the U.S. and Canada during January and February resulted in reduced customer demand. However, March sales showed a strong recovery, resulting in a sequential quarterly increase of 6.4%. Consumable sales in the Europe, Africa and Middle East Region during the first quarter were up 11.4% from the comparable year-ago quarter.
• Service revenue declined 8.7% to $6.0 million in the first quarter of 2011 compared to the year-ago quarter. This decline is primarily due to the continued erosion of the analog service base, lower installation revenue and a general trend by customers to delay service calls and maintenance to save money in a difficult economy. Service revenue has remained fairly stable during the past four quarters.
Gross margin percent for the first quarter of 2011 was 31.2% compared to 33.0% in the first quarter of 2010. The reduction versus the first quarter of 2010 was due primarily to lower service and equipment margins. The Company implemented cost reduction actions in the Service business during the first quarter of 2011 in response to lower Service margins.
Operating expenses declined by $0.5 million, or 4.2%, from the first quarter of 2010. Excluding special charges of $0.3 million, operating expenses were down 6.8% on a year-over-year basis. The decline in operating expenses was primarily related to reduced payroll costs, professional service fees, and equity-based compensation. The Company incurred restructuring expenses of $0.3 million during the first quarter of 2011 related to cost actions taken to reduce future annual operating expenses and Service business costs aggregating approximately $1.3 million.
As the Company expected, debt net of cash increased during the first quarter of 2011, ending at $8.8 million compared to $6.1 million at the end of fiscal 2010. The primary causes of the increase were cash expenditures incurred with the introduction of the new 75DI press, pre-payment of certain annual operating expenses in the normal course of business, and higher receivables resulting from stronger March sales.
"Despite the continued impact of a soft economy and bad weather across much of the U.S. during the first quarter, we are pleased that our results exceeded our expectations," said Presstek Executive Vice President and Chief Financial Officer Jeff Cook. "In addition, we have seen an increased level of equipment sales activity during the early part of the second quarter of 2011, and expect to report both sequential and year-over-year equipment revenue growth for the quarter. (See "Information Regarding Non-GAAP Measures")
Information Regarding Non-GAAP Measures In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides non-GAAP financial measures, including operating expenses excluding special charges; adjusted EBITDA; debt net of 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.
Conference Call and Webcast Information Management will discuss Presstek's first quarter 2011 results in a conference call on Monday, May 9, 2011 at 10:30 a.m. Eastern Time. Conference call information is below:
Conference Call Access: Domestic Dial In: (866) 510-0704
International Dial In: (617) 597-5362 Passcode: 73460308
In addition, for those unable to participate at the time of the call, a rebroadcast will be available following the call from Monday, May 9, 2011 at 1:30 PM Eastern Time until Monday, May 16, 2011 at 11:59 PM Eastern Time.
Rebroadcast Access: Domestic Dial In: (888) 286-8010 International Dial In: (617) 801-6888 Passcode: 25209696
An archived webcast of this conference call will also be available on the "Investor Events Calendar" page of the Company's web site, www.presstek.com.
Presstek, Inc. is a leading supplier of digital offset printing solutions to the printing and communications industries. Presstek's DI 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. 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. Visit www.presstek.com or call +1.603.595.7000 for more information. DI is a registered trademark of Presstek, Inc.
Source: financial release.