-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BJqso8Z2XR3YNE+IEMM/YcFs3rfZ9rw3ckSLEFf97YIm8Xpmf72p4sd7JFas99dO ALpGjYE6a0evvpi+lbg3kw== 0000897101-03-000317.txt : 20030423 0000897101-03-000317.hdr.sgml : 20030423 20030423162955 ACCESSION NUMBER: 0000897101-03-000317 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030423 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030423 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RIMAGE CORP CENTRAL INDEX KEY: 0000892482 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 411577970 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20728 FILM NUMBER: 03660321 BUSINESS ADDRESS: STREET 1: 7725 WASHINGTON AVE S CITY: EDINA STATE: MN ZIP: 55439 BUSINESS PHONE: 6129448144 MAIL ADDRESS: STREET 1: 7725 WASHINGTON AVENUE SOUTH CITY: EDINA STATE: MN ZIP: 55439 8-K 1 rimage031909_8k.txt RIMAGE CORPORATION FORM 8K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): April 23, 2003 RIMAGE CORPORATION ------------------ (Exact name of Registrant as specified in its charter) Minnesota 0-20728 41-1577970 --------- ------- ---------- (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation) Identification No.) 7725 Washington Avenue South Minneapolis, MN 55439 - ------------------ ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (952) 944-8144 Items 1, 2, 3, 4, 6, 8, 10, and 11 are not applicable and therefore omitted. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits The following are filed as Exhibits to this Report: Exhibit No. Description of Exhibit - ----------- ---------------------- 99.1 Press release issued April 23, 2003. 99.2 Statements of Bernard T. Aldrich and Robert J. Wolf for telephone conference held on April 23, 2003. ITEM 9. REGULATION FD DISCLOSURE (ITEM 12, DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION). Pursuant to Item 12 of Form 8-K, Disclosure of Results of Operations and Financial Condition, Rimage Corporation hereby furnishes a press release, issued on April 23, 2003, disclosing material non-public information regarding its results of operations for the quarter ended March 31, 2003. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. RIMAGE CORPORATION By /s/ Robert M. Wolf ------------------------------------- Robert M. Wolf President and Chief Executive Officer Dated: April 23, 2003 EX-99.1 3 rimage031909_ex99-1.txt PRESS RELEASE EXHIBIT 99.1 RIMAGE REPORTS STRONG FIRST QUARTER SALES AND EARNINGS MINNEAPOLIS, MN--APRIL 23, 2003--Rimage Corporation (Nasdaq NMS: RIMG) today reported that net income for the first quarter of 2003 ended March 31 increased 33% to $1,504,000 or $0.16 per diluted share, from $1,134,000 or $0.12 per diluted share in the year-earlier period. Revenues rose 17% to $11,544,000, from $9,886,000 in the first quarter of 2002. Bernard P. (Bernie) Aldrich, president and chief executive officer, commented: "Rimage is continuing to perform at a high level despite the sluggish global economy and uncertainty created by the Iraqi conflict. Our above-plan earnings for this period were generated by the across-the-board strength of Rimage's operations, with no single customer accounting for a disproportionate share of our first quarter sales. As planned, we made significant investments in sales and marketing initiatives during the first quarter. We also launched an important new CD/DVD publishing system, designed specifically for the mini-lab segment of the digital photography market. In addition, a new-generation Desktop publishing system will be introduced in April. These product launches and investments in sales and marketing programs are expected to have a positive impact on our operating results over the balance of 2003. As a result, we remain very optimistic about our near and longer-term prospects." FIRST QUARTER HIGHLIGHTS * International sales accounted for 42% of total first quarter revenues. Currency effects increased worldwide sales by 7.6% in this year's first quarter. * Reflecting the growth of Rimage's worldwide installed base of CD/DVD publishing systems, recurring revenues, including sales of consumable supplies, maintenance contracts, printer ribbons, media and parts, increased 34% in the first quarter from the year-earlier period and accounted for 32% of total sales. * Selling, general and administrative expense increased 15% in the first quarter, reflecting investments in sales and marketing programs aimed at strengthening Rimage's ability to penetrate its targeted markets. These expense levels are expected to remain at relatively high levels for the next few quarters. * Rimage started shipping its new DiscLab system for the photography market in the first quarter. Designed specifically for mini-lab and related environments, the DiscLab system provides mini-labs with the same CD/DVD publishing quality and capabilities as wholesale photo-finishing labs. A significantly upgraded Desktop publishing system, equipped with an HP-enabled inkjet color surface label printer, will be introduced in April. * Cash and short-term investments totaled $37.1 million at March 31, 2003, an increase of $0.8 million from $36.3 million at the end of 2002. The Company's balance sheet remains debt-free, while shareholder's equity rose to $43.7 million as of March 31, 2003. SECOND QUARTER 2003 GUIDANCE For the second quarter of 2003 ending June 30, Rimage is forecasting earnings of $0.15 to $0.17 per diluted share on revenues of $12.0 million to $13.0 million. In the second quarter of 2002, Rimage's operating results were favorably affected by a one-time order from Eastman Kodak totaling approximately $2.0 million. ABOUT RIMAGE Rimage Corporation is the world's leading provider of recordable CD and DVD publishing systems, which are used by businesses to produce discs with customized digital content on an on-demand basis. Rimage's publishing systems, which span the range from high to low CD/DVD production volumes, integrate robotics, software and surface label printers into a complete publishing solution. Rimage is focusing its CD/DVD publishing solutions on a set of vertical markets with special needs for customized, on-demand digital information: digital photography, banking and finance, medical imaging, and government. Statements regarding the Company's anticipated performance in 2003 are forward-looking and therefore involve risks and uncertainties, including but not limited to: market conditions in the computer data storage market, competitive products and changes in technology, factors in overseas markets that could affect international sales, and other factors set forth in the Company's filings with the Securities and Exchange Commission. # # # For additional information, contact: - ------------------------------------ Bernard P. (Bernie) Aldrich, CEO Richard G. Cinquina Robert M. Wolf, CFO Equity Market Partners 952/944-8144 212/461-7145 or 612/338-0810 ================================================================================ RIMAGE CORPORATION Selected Consolidated Financial Information (In thousands except per share data) (Unaudited) CONSOLIDATED STATEMENT OF OPERATIONS INFORMATION: Three months ended March 31, ------------------ 2003 2002 ------- ------- Revenues $11,544 $ 9,886 Cost of Revenues 5,809 5,139 ------- ------- Gross Profit 5,735 4,747 Operating Expenses: Research and Development 848 878 Selling, General and Administrative 2,634 2,298 ------- ------- Total Operating Expenses 3,482 3,176 ------- ------- Operating Income 2,253 1,571 Other Income, Net 115 215 ------- ------- Income Before Income Taxes 2,368 1,786 Income Tax Expense 864 652 ------- ------- Net Income 1,504 1,134 ======= ======= Net Income Per Basic Share $ .17 $ .13 Net Income Per Diluted Share $ .16 $ .12 Basic Weighted Average Shares Outstanding 8,727 8,646 Diluted Weighted Average Shares Outstanding 9,483 9,454 CONSOLIDATED BALANCE SHEET INFORMATION: Balance As Of ------------------------ March 31, December 31, 2003 2002 --------- --------- (Unaudited) Cash and Marketable Securities $37,113 $36,337 Accounts Receivable 6,233 6,644 Inventories 3,918 3,042 Total Current Assets 48,531 47,337 Property and Equipment, Net 1,334 1,314 Total Assets 49,923 48,709 Current Liabilities 6,191 6,552 Stockholders' Equity 43,731 42,157 ======================================================== CONFERENCE CALL AND REPLAY Rimage Corporation will review its first quarter operating results in a conference call at 4:30 PM Eastern today. Investors can listen to the conference call at www.rimage.com or www.vcall.com. It is recommended that listeners go to one of these web sites at least 15 minutes before the scheduled start time to download and install any necessary audio software. A replay of the conference call will be available through April 30 by dialing 719-457-0820 and providing the 507421 confirmation code. EX-99.2 4 rimage031909_ex99-2.txt BERNARD ALDRICH REMARKS EXHIBIT 99.2 BERNARD ALDRICH REMARKS RIMAGE CORPORATION FIRST QUARTER 2003 CONFERENCE CALL APRIL 23, 2003 ================================================================================ * Good afternoon and thanks for taking the time to participate in our first quarter conference call. * Joining me today is Dave Suden, our chief technology officer, and Rob Wolf, our chief financial officer. * In keeping with Regulation FD, which prohibits us from providing an investor with any guidance unless it is also publicly released, we have provided financial guidance in our first quarter release. * Our guidance is subject to a number of risks, including the potential impact of weakness in the national economy on the computer data storage and computer peripherals market. * Other factors that could affect our performance are set forth in our filings with the Securities and Exchange Commission, which we urge you to review. * As evidenced by our strong first quarter results, Rimage is continuing to perform at a high level despite the sluggish global economy and uncertainty created by the Iraqi conflict. * Net income for the first quarter increased 33% to $1.5 million or $0.16 per diluted share, which exceeded our previously reported guidance for this period. * Revenues rose 17% to $11.5 million. * Our performance for this period was generated by the across-the-board strength of Rimage's operations. * No single customer accounted for a disproportionately large share of our first quarter sales. * Our four targeted markets, which include digital photography, medical imaging, banking and finance, and government, contributed a combined 56% to our first quarter sales total. * Our strong first quarter earnings were attained despite a 15% increase in SG&A expense. * This planned increase reflects a concerted effort to further penetrate our targeted markets by implementing a range of new sales and marketing programs. * SG&A expense is expected to remain at relatively high levels over the balance of 2003 in comparison to last year's expense levels. * Now, for the next few minutes, I would like to discuss two recent and important new product introductions. * This week, we will introduce our new Desktop publishing system, which incorporates enriched features and enhancements in comparison to the line it has replaced. * Equally important, our new Desktop system features an inkjet color printer that is the result of our strategic alliance with Hewlett-Packard. * In addition to providing customers with the confidence of using an HP-enabled product, this new printer is significant for another reason. * Our previous Desktop system included an inkjet printer that we purchased from another vendor. * As a result, we did not share in the recurring revenue stream generated by customer sales of replacement printer cartridges and other parts. * That changes with our new Desktop system, since we will be selling all after-market products to our customers. * We believe the recurring revenue stream generated by our new Desktop publishing system could become significant over the next few years. * Our second product introduction involves our new DiscLab publishing system. * The DiscLab system is designed specifically for the photo-finishing mini or one-hour labs found in tens of thousands of retail establishments. * This new system provides mini-labs with the same CD publishing and color label printing quality as found in the higher-volume systems that we sell to large wholesale labs. Moreover, DiscLab has been integrated into the photo-finishing mini-lab equipment sold by the industry's leading players to major retailers. * For this reason, DiscLab represents a key part of our strategy for participating in the conversion of retail mini-labs to digital capabilities, meaning publishing photos on CDs. * We are continuing to pursue a range of promising opportunities in this market segment, and we believe mini-lab sales should grow steadily over the balance of 2003. * We are also encouraged by the progress that we are making in the medical imaging market. * Sales into this market were strong in this year's first quarter, reflecting the growing effectiveness of our strategy of establishing strategic partnerships with industry-leading players. * Thus far, substantially all of our sales have been made into the after-market, where existing medical imaging installations are being converted to provide digital output on CD/DVD media, in addition to conventional analog film. * Industry sources estimate that approximately 80,000 to 100,000 worldwide applications in the medical imaging marketplace currently exist for our CD/DVD publishing systems. * These applications, which include all imaging modalities from CT and MRI to ultrasound and mammography, are found in approximately 20,000 hospitals and clinics around the world. * So, like digital photography, the medical imaging market represents another major opportunity for Rimage that we are aggressively pursuing. * I will conclude my remarks by reviewing the financial guidance included in our first quarter earnings release. * For the second quarter of 2003 ending June 30, we are forecasting earnings of $0.15 to $0.17 per diluted share on revenues of $12.0 million to $13.0 million. * At this point, we believe that our year-over-year comparisons will be affected by the $2 million one-time order that we booked with Eastman Kodak in last year's second quarter. * We are not anticipating an order of this size in the current quarter. * Instead, we believe that our outlook for strong sales and earnings will continue to be driven by the across-the-board strength of our ongoing operations. * As I indicated earlier, this pattern reflects the sustainable underlying strength of our business. * And it is why we are confident in our outlook for strong sales and earnings growth. * Thank you. Now, Rob Wolf will review our first quarter results in some detail. ROBERT J. WOLF REMARKS RIMAGE CORPORATION FIRST QUARTER 2003 CONFERENCE CALL APRIL 23, 2003 ================================================================================ * Thanks, Bernie * Reflecting the steady expansion of our worldwide installed base of CD/DVD publishing systems, sales of consumable supplies, including maintenance contracts, printer ribbons, media and parts, increased 34% in the first quarter from the year-earlier level. * Recurring revenues accounted for 32% of our total first quarter sales. * The expansion of Rimage's recurring revenue stream is providing us with a growing degree of predictability and consistency, and we expect this revenue component to continue growing. * Rimage's gross margin improved to 50% in this year's first quarter, from 48% in the first quarter of 2002, due primarily to improvements in our sales mix. * R&D expense of $849,000 was down slightly from the year-earlier level, but reflecting higher sales in the current quarter, R&D came to 7% of first quarter sales, compared to 9% a year ago. * Selling, general and administrative expense increased 15% in the first quarter from the year-earlier level, reflecting investments in sales and marketing programs aimed at strengthening Rimage's ability to penetrate its targeted markets. * SGA, which is expected to remain at relatively high levels for the next few quarters, came to 23% of revenues in the first quarters of both 2003 and 2002. * Our operating margin improved to 20% in this year's first quarter, from 16% in the year-earlier period. * In addition, our pre-tax margin rose to 21% in this year's first quarter, from 18% a year ago. * Finally, Rimage's effective tax rate was unchanged at 36.5% in the first quarter. * Turning now to the balance sheet, cash and investments totaled $37.1 million at March 31, 2003, up from $36.3 million at the end of 2002. * This rate of cash growth was below that of prior periods due to the approximately $900,000 increase in inventories in this year's first quarter. * Our increased inventories for this period resulted primarily from the delayed introduction of our new Desktop product line. * Now that shipments of this new product are scheduled to begin this week, we expect inventories to decline by the end of the second quarter. * Shareholders' equity improved to $43.7 million at the end of the first quarter, from $42.2 million at year-end 2002. * This put our return on equity at 25%, up from 21% a year ago. * That wraps up our formal remarks, and now I will turn the conference call back to the operator, who will poll you for any questions. -----END PRIVACY-ENHANCED MESSAGE-----