Presstek announces 2008's third quarter results

Presstek has announced third quarter results for 2008 of USD0.6m, compared with a USD2.7m loss for the third quarter of 2007.

Net income in the third quarter of 2008 was USD0.2m against a net loss of USD3.6m for the same period last year.

This is the third consecutive quarter of profitability for the company.

These results exclude the company's Lasertel affiliate, as Presstek is preparing to sell this part of the business.

Lasertel will operate as a separate company until it is sold.

Presstek sold its Lasertel land and building in Tucson, Arizona, for USD8.75m this year.

This money and continued operational cash flow improvements resulted in debt net of cash of USD13.3m at the end of the quarter, a USD17.5m or 57 per cent reduction from the third quarter of 2007.

Jeff Cook, executive vice-president and chief financial officer, said: 'As a result of our progress in reducing debt, interest expense in the third quarter of 2008 was USD273,000 or USD484,000 (64 per cent) lower than the equivalent prior year period.' Revenue in the third quarter of 2008 was USD48.5m (excluding Lasertel sales of USD2.5m), a decline of USD9.1m or 16 per cent versus the third quarter of 2007, driven primarily by weakness in US equipment and consumables sales.

These were partially offset by increases in European equipment sales.

Revenue declined 14 per cent, excluding the impact of foreign currency.

Europe's equipment sales during the quarter increased by 35 per cent versus 2007, due in part to a successful Drupa show during the second quarter of 2008.

Sales of DI presses were comparable in the third quarter of 2008 to prior year levels.

Presstek branded DI plate sales also increased slightly.

Presstek's traditional product portfolio declined because of economic weakness.

Gross margin in the third quarter of 2008 was 34.7 per cent versus 26.2 per cent a year ago.

Equipment gross margin in the quarter increased to 15.1 per cent versus 0.3 per cent in 2007 and consumables gross margin in the quarter was 49.5 per cent versus 45.7 per cent in 2007.

Service margins improved to 26.1 per cent in 2008 versus 14.7 per cent in 2007.

The company's improved operating discipline in 2008 meant it didn't have to pay the USD3.4m of charges it incurred in 2007.

Operating expenses in the third quarter of 2008 declined 27 per cent, or USD5.5m, versus 2007.

Approximately USD0.6m of the year-to-year operating expense decline was related to lower litigation and professional fees.

Operating income of USD2.1m increased USD7.3m during the third quarter of 2008 compared with the same prior year period.

Operating margin from continuing operations, excluding restructuring and stock compensation expense, was 6.2 per cent in the third quarter of 2008 and 5.8 per cent for the year-to-date period.

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