Product category:
Printing Pre-Press Systems and Materials (Repro, Platemakers, CTP, Workflow, Document Management, Design Software, etc.)
News Release from: Presstek Inc
Edited by the Printingtalk Editorial
Team on 02 October 2006
Digital Shift And Production Problems
Hit Presstek
Presstek's third quarter performance figures have been below expectations and it is only anticipting a break-even operating profit for the period, with a net loss of $0.02 per share diluted.
Presstek's third quarter performance figures have been below expectations and it is only anticipting a break-even operating profit for the period, together with a net loss of approximately $0.02 per share diluted For the third quarter ending September 30, Presstek expects revenue to be between US$65 and US$66 million, compared with expectations of flat sequential revenue of US$74.2 million in the second quarter of 2006
This article was originally published on Printingtalk on 18 Mar 2003 at 8.00am (UK)
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Edward J Marino, the company's president and chief executive officer said: "We are disappointed with the results we expect to report for the third quarter.
A number of factors are leading to revenue below expectations for the quarter.
First, our analogue business was softer than we expected in the third quarter in the equipment, consumables and service areas.
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We expect that this will result in reductions of approximately US$2.5 million in revenues.
This is a non- strategic, lower margin part of our business and we have to make further efforts to get ahead of the declines that will naturally occur in this area of business as our industry continues to move towards digital technology." He continued: "The second factor relates to delays in the timing of certain digital equipment transactions in the quarter.
We weren't able to close on as much business during the quarter as we had anticipated.
These delays will result in reductions of approximately US$3.5 million over the last quarter and we believe the pending Graph Expo Trade Show coming in the middle of October has had a greater impact than we expected." Marino explained that the third issue involved manufacturing of Presstek's Vector CTP product.
The company effectively stopped sales of Vector CTP in the third quarter until it resolved some manufacturing issues.
And he added: "This is expected to result in a decline in CTP units in the third quarter over the previous period, which we believe will result in a reduction of approximately US$1 million in revenue.
We believe that the product improvements we have made will allow us to resume full Vector sales and return to growth in the final quarter and in to 2007." Presstek's DI plate sales were down in the quarter, primarily due to a lowering of inventory by major OEM partners, which the company expect will have an unfavorable impact on its revenue, to the value of approximately US$1 million.
"We do not believe this to be in any way competitive, but rather a business decision on our partners' part," said Marino.
And he emphasised: "We expect to have a better quarter in the fourth quarter but, based on the current trends, we do not expect to realise the anticipated 10 per cent growth in consolidated revenues this year.
The third quarter is not yet over and we will provide a full update during a little later." Moosa E Moosa, executive vice president and chief financial officer of Presstek,said: "The company's performance this quarter was disappointing.
As a result, we expect consolidated equipment revenues to be approximately US$21-$22 million, compared with US$27.5 million last quarter.
Consumables revenues are expected to be approximately US$33 million compared with US$35.0 million last quarter.
Service revenues, which are also impacted by lower equipment installations, are expected to be approximately US$11 million compared with US$11.7 million last quarter." Marino added: "We were not pleased with the quarter, and we are taking actions to improve our business performance.
We will continue to take steps to stem the impact of our analogue business erosion and we have made corrections to address the Vector manufacturing issues.
We also have a number of new digital products in the pipeline that will broaden our portfolio, such as our new 52DI press, which we will be formally introducing in the US at Graph Expo 2006 from October 15 - 18." He explained: "On top of this, our increased emphasis on digital products and services will let us improve our margin potential in the longer-term.".
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