Impreso Reports Results for FY2005
COPPELL, TX -- 12/15/2005 -- Impreso, Inc. (NASDAQ: ZCOM), which through its
subsidiaries is involved in (1) the manufacture and distribution of paper
and film hard copy imaging products for commercial and home office
applications; (2) the development of eCommerce initiatives; (3) the natural
spring bottled water business, today announced sales and earnings for
FY2005.
Net sales for the fiscal year ended August 31, 2005, decreased to $77.7
million, compared with net sales of $104 million in the previous fiscal
year. Net income decreased to a loss of $2.9 million, or $(0.55) per share,
compared with net income of $1 million, or $0.19 per share, in FY 2004, and
$618,000, or $0.12 per share, in FY 2003. Gross profits decreased to $4.2
million in FY2005, versus gross profits of $13.7 million in the prior-year
period.
For the three months ended August 31, 2005, the Company reported a net loss
of $366,000 or $(0.07) per share, on net sales of $19.3 million. These
results compared with a net loss of $65,000, or $(0.01) per share, and net
sales of $26 million, in the corresponding period of the prior year.
"This year our Company's net income declined materially, as we felt the
impact of the losses of sales of continuous computer forms to significant
customers in the beginning of Fiscal 2005," commented Marshall Sorokwasz,
President and Chief Executive Officer of Impreso, Inc. "In response to
these losses, the Company implemented a cost reduction savings plan, and
was successful in achieving many of the planned steps, such as selling real
estate, reducing inventory, and other cost cutting measures. However,
unanticipated escalating freight and fuel costs partially offset some of
the potential gain from the plan in the Fiscal 2005 year. In the first
quarters of the year ending August 31, 2006, we are introducing revised
freight policies to recapture these expenses."
"For the first time in our Company's 30 year history, sales of continuous
computer forms comprised less than 50% of our revenue in the Fiscal 2005,"
continued Mr. Sorokwasz. "The engineering roll and small point of purchase
rolls market have had excellent growth in the past few years, and are now
our largest hard copy imaging product categories.
"In Fiscal 2005, we had begun to build bottled water inventory at our five
plant locations, when the multiple natural disasters in late Fiscal 2005
placed a great demand on our bottled water products. While the Company
benefited during these disasters with increased water sales, the loss of
sales of hard copy imaging products in the affected areas and escalating
freight costs in the United States, materially affected results of
operations in Fiscal 2005," concluded Mr. Sorokwasz.
About Impreso, Inc.
Impreso, Inc. is a holding company for TST/Impreso, Inc. HotSheet.com,
Inc., and Alexa Springs, Inc. TST/Impreso, Inc. is a manufacturer and
distributor of hard copy imaging products for commercial and home use in
domestic and international markets. HotSheet.com, Inc. primarily owns
HotSheet.com, a single-page, online Internet directory with categorized
links to premier web destinations. Alexa Springs, Inc. is a natural spring
water bottler. The Company's website domains are www.hotsheet.com,
www.alexasprings.com, www.impreso.com, and www.tstimpreso.com.
Impreso, Inc. is headquartered in Coppell, Texas, and its common stock
trades on the Nasdaq Capital Market under the symbol "ZCOM."
This press release may include statements that constitute
"forward-looking" statements, usually containing the words "believe,"
"estimate," "project," "expect" or similar expressions. These statements
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements inherently
involve risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements. Factors that would cause
or contribute to such differences include, but are not limited to,
continued acceptance of the Company's products in the marketplace,
competitive factors, new products and technological changes, paper prices
and raw material costs, dependence upon third-party vendors, and other
risks detailed in the Company's periodic report filings with the Securities
and Exchange Commission. By making these forward-looking statements, the
Company undertakes no obligation to update these statements for revisions
or changes after the date of this release.
IMPRESO, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended August 31,
2005 2004
------------ ------------
Net sales $ 19,292,466 $ 26,024,469
Cost of sales 17,748,261 22,223,657
------------ ------------
Gross profit 1,544,205 3,800,812
Gain on sale of assets (409,780) -
Embezzlement recovery (253,313) -
Selling, general and administrative expenses 2,457,839 3,705,937
Operating (loss) income (250,541) 94,875
------------ ------------
Other expenses (income):
Interest expense 339,891 207,204
Extinguishment of debt - -
Other expense (income), net 147,510 (44,687)
------------ ------------
Total other expenses 487,401 162,517
------------ ------------
(Loss) income before income tax expense (737,942) (67,642)
------------ ------------
Income tax (benefit) expense:
Current 508,853 312,642
Deferred (880,168) (315,601)
------------ ------------
Total income tax (benefit) expense (371,315) (2,959)
------------ ------------
Net (loss) income $ (366,627) $ (64,683)
============ ============
Net (loss) income per common share $ (0.07) $ (0.01)
(basic and diluted) ============ ============
Weighted average shares outstanding (basic) 5,278,780 5,278,780
============ ============
IMPRESO, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Years ended August 31,
2005 2004
------------ ------------
Net sales $ 77,727,971 $103,989,229
Cost of sales 73,551,166 90,283,782
------------ ------------
Gross profit 4,176,805 13,705,447
Gain on sale of assets (554,374) -
Embezzlement recovery (290,840) -
Selling, general and administrative expense 9,055,980 10,879,310
------------ ------------
Operating (loss) income (4,033,961) 2,826,137
------------ ------------
Other expenses (income):
Interest expense 1,240,794 1,083,289
Extinguishment of debt (489,645) -
Other expense (income), net (279,156) 54,682
------------ ------------
Total other expense 471,993 1,137,971
------------ ------------
(Loss) income before income tax expense (4,505,954) 1,688,166
------------ ------------
Income tax (benefit) expense:
Current (1,120,348) 1,177,802
Deferred (476,278) (503,231)
------------ ------------
Total income tax (benefit) expense (1,596,626) 674,571
------------ ------------
Net (loss) income $ (2,909,328) $ 1,013,595
============ ============
Net (loss) income per common share
(basic and diluted) $ (0.55) $ 0.19
============ ============
Weighted average shares outstanding (basic) 5,292,780 5,292,780
============ ============