X-Rite Sales Hit Record

X-Rite has announced record net sales of $28.5 million, up by 20.8%, for the first quarter of 2004 with gross margins of 63.6%.

X-Rite has announced record net sales of $28.5 million, up by 20.8%, for the first quarter of 2004 with gross margins of 63.6%.

The company said it is now in its seventh consecutive quarter of year-on-year sales growth, with operating income of $1.7 million compared with $1.6 million in the first quarter of 2003 whilst it maintains continued strong investments in engineering, sales and marketing.

Prior year results included a non-recurring expense reimbursement from a large customer of $1.0 million.

Excluding 2003's expense reimbursement, first quarter 2004 operating income increased $1.1 million.

Operating income was 6.0% of sales in the first quarter of 2004 as compared with 2.4% in the prior year period, excluding the 2003 expense reimbursement.

"We finished 2003 on a strong note, and our momentum continues in 2004," said Michael C.

Ferrara, chief executive officer of X-Rite.

"We recorded the highest level of first quarter sales in our history, and have now experienced seven successive quarters of year-on-year revenue growth.

This success can be attributed to our customer-driven strategy and our culture of accountability." X-Rite will introduce at Drupa 2004 seven new colour management tools that the company believes will enable improved colour results with minimal investment and maximum efficiency.

Called Streamlined Colour Management, it exemplifies the types of customer-driven products the company will focus on said Mary E.

Chowning, X-Rite's chief financial officer.

"We are seeing revenue growth in all major colour businesses and all geographic markets, and cost discipline efforts in the sales and marketing and general and administrative areas are beginning to show results," she added.

Ferrara added, "We remain confident in our ability to deliver double-digit revenue growth and higher operating income throughout 2004 versus 2003.

The Company reported a net loss in the first quarter of 2004 of $3.8 million or 18 cents per share due to a non-cash charge of $4.9 million (23 cents per share) related to Statement of Financial Accounting Standards No.

150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (SFAS No.

150).

SFAS No.

150 requires certain long-term liabilities be adjusted quarterly based on the Company's current stock price.

These liabilities relate to the repurchase agreements with the Company's founders, the value of which was previously reflected as temporary equity prior to the implementation of SFAS No.

150.

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