-----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, MWEQUYEudIdQ85E5+FZkpPYOr/THELT6AKHLGOOAz4jMI+/sMYkkgjwHA0yETRkY cYt3aZ1s0zkE6RZj/epPTg== 0000897101-03-000828.txt : 20030724 0000897101-03-000828.hdr.sgml : 20030724 20030724110227 ACCESSION NUMBER: 0000897101-03-000828 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030723 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030724 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: 03799774 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 rimage033147_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): July 23, 2003 RIMAGE CORPORATION ------------------ (Exact name of Registrant as specified in its charter) Minnesota 0-20728 41-1577970 --------- ------- ---------- (State or other jurisdiction (Commission File Number) (I.R.S. Employer of 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, 5, 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 July 23, 2003. 99.2 Statements of Bernard P. Aldrich and Robert M. Wolf for telephone conference held on July 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 July 23, 2003, disclosing material non-public information regarding its results of operations for the quarter ended June 30, 2003 and statements of the Company's Chief Executive Officer and Chief Financial Officer made on July 23, 2003 at a telephone conference relating to the Company's quarter ended June 30, 2003 results. 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 Chief Financial Officer Dated: July 24, 2003 EX-99.1 3 rimage033147_ex99-1.txt PRESS RELEASE Exhibit 99.1 RIMAGE REPORTS STRONG SECOND QUARTER OPERATING RESULTS; EARNINGS OF $0.18 PER SHARE EXCEED PREVIOUSLY-ISSUED FINANCIAL GUIDANCE MINNEAPOLIS, MN--JULY 23, 2003--Rimage Corporation (Nasdaq NMS: RIMG) today reporteD sales of $12,791,000 for the second quarter of 2003 ended June 30, up from $12,310,000 in the year-earlier quarter. Excluding the one-time order of approximately $2.0 million received from Eastman Kodak Company in the second quarter of 2002, sales for the current quarter were up 24% on a year-over-year basis. Net income for the second quarter of 2003 came to $1,717,000 or $0.18 per diluted share, compared to $1,801,000 or $0.19 per diluted share a year earlier. The Company previously forecasted second quarter earnings of $0.15 to $0.17 per diluted share. Bernard P. (Bernie) Aldrich, president and chief executive officer, commented: "We are very encouraged by Rimage's strong second quarter performance. Although we continued to face challenging economic conditions in both the U.S. and Europe, we exceeded the strong sales posted in last year's second quarter, which included the large, nonrecurring Kodak order. It is important to realize that no single customer accounted for a disproportionate share of Rimage's sales in the current quarter. Our balanced performance reflects the strength of Rimage's global distribution channel and the steadily growing acceptance of our CD/DVD publishing and printing solutions in our targeted markets: medical imaging, digital photography, banking and finance, and government. We also are continuing to benefit from the strength of our European operation, which made a solid contribution to our consolidated second quarter results. Given all these factors, we remain very optimistic about our business prospects over the balance of 2003." SECOND QUARTER HIGHLIGHTS o International sales accounted for 43% of total second quarter revenues. Currency effects increased worldwide sales by 7.2% in this year's second quarter. o 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 and cartridges, media and parts, increased 40% in the second quarter from the year-earlier period and accounted for 30% of total sales. o Rimage ended the quarter with a Desktop order backlog of approximately $750,000, all of which is scheduled for shipment in the third quarter. The Company said the market has shown strong interest in its new Desktop line since its April introduction and that efforts are underway to build an office supply distribution channel for this promising product. o Selling, general and administrative expense increased 13% in the second quarter, reflecting investments in sales and marketing programs aimed at strengthening Rimage's ability to penetrate its targeted markets. o Cash and short-term investments totaled $40.0 million at June 30, 2003, an increase of $3.7 million or 10% from $36.3 million at the end of 2002. The Company's balance sheet remains debt-free, while shareholder's equity rose to $47.0 million as of June 30, 2003, from $42.2 million at year-end 2002. THIRD QUARTER 2003 GUIDANCE For the third quarter of 2003 ending September 30, Rimage is forecasting earnings of $0.19 to $0.21 per diluted share on revenues of $13 million to $14 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 Rimage Corporation 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 SIX MONTHS ENDED June 30, June 30, 2003 2002 2003 2002 ---------- ---------- ---------- ---------- Revenues $12,791 $12,310 $24,335 $22,196 Cost of Revenues 6,459 6,203 12,267 11,342 Gross Profit 6,332 6,107 12,068 10,854 Operating Expenses: Research and Development 926 1,013 1,775 1,890 Selling, General and Administrative 2,823 2,503 5,457 4,802 Total Operating Expenses 3,749 3,516 7,232 6,692 Operating Income 2,583 2,591 4,836 4,162 Other Income, Net 121 245 237 460 Income Before Income Taxes 2,704 2,836 5,073 4,622 Income Tax Expense 987 1,035 1,852 1,687 Net Income 1,717 1,801 3,221 2,935 Net Income Per Basic Share $.20 $.21 $.37 $.34 Net Income Per Diluted Share $.18 $.19 $.34 $.31 Basic Weighted Average Shares Outstanding 8,757 8,705 8,742 8,691 Diluted Weighted Average Shares Outstanding 9,644 9,496 9,556 9,488
Consolidated Balance Sheet Information: Balance As Of ----------------------------------- June 30, December 31, 2003 2002 ---------- ---------- (Unaudited) Cash and Cash Equivalents $40,024 $36,337 Accounts Receivable 6,426 6,644 Inventories 4,045 3,042 Total Current Assets 52,020 47,337 Property and Equipment, Net 1,267 1,314 Total Assets 53,344 48,709 Current Liabilities 6,353 6,552 Stockholders' Equity 46,991 42,157 CONFERENCE CALL AND REPLAY Rimage Corporation will review its second quarter operating results in a conference call at 4:30 PM Eastern today. To participate, call 1-800-257-7087 about 10 minutes before the start time and ask for the Rimage conference call. A replay of the conference call will be available through July 30 by dialing 303-590-3000 and providing the 544975 confirmation code. Investors also can listen to the conference call at www.rimage.com. Listeners should go to this web site at least 15 minutes before the scheduled start time to download and install any necessary audio software. EX-99.2 4 rimage033147_ex99-2.txt COMMENTS OF CEO CFO Exhibit 99.2 BERNIE ALDRICH REMARKS RIMG 2Q03 CONFERENCE CALL ================================================================================ o Good afternoon and thanks for taking the time to participate in our second quarter conference call. o Joining me today is Dave Suden, our chief technology officer, and Rob Wolf, our chief financial officer. o 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 second quarter release. o 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. o 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. o Turning now to the second quarter, Rimage continued to post strong operating results despite the sluggish economy both here at home and in Europe. o We are particularly encouraged by our second quarter performance, since we were facing a difficult comparison with the year-earlier period. o Last year's second quarter benefited from a one-time, $2.0 million order from Kodak for expanding CD production capacity in Kodak's U.S. wholesale photo finishing labs. o That order pushed our sales to $12.3 million. o Without it, our sales would have been $10.3 million, and our earnings would have been well under the $0.19 per share that we reported. o In this year's second quarter, our sales rose 4% to $12.8 million. o When you exclude that non-recurring Kodak order, sales in this year's second quarter were up a strong 24%. 1 o In other words, our ongoing business was up 24% year-over-year. o When looking at our earnings in the current quarter, it should also be noted that SG&A expense rose 13%, reflecting new marketing initiatives related to the Desktop line and currency adjustments on our European cost structure. o Despite these factors, our earnings of $0.18 per share were only a penny less than the year-earlier amount. o Moreover, we exceeded our second quarter earnings guidance of $0.15 to $0.17 per share. o Our strong second quarter results were generated by a very balanced sales effort. o No single customer accounted for a disproportionately large share of our second quarter sales. o Our four targeted markets, which include digital photography, medical imaging, banking and finance, and government, contributed a combined 51% to our sales total for the first half of 2003. o We also benefited from another solid contribution from our European operation, which posted second quarter sales growth of 16% in euros and accounted for 37% of our total second quarter sales volume. o It bears repeating that the European market is very similar to that of North America in terms of overall size and specific CD/DVD market applications. o As a result, we are aggressively pursuing a range of promising opportunities in the European market, and we believe it is realistic to expect, over time, a fairly evenly divided sales mix between North America and Europe. o Finally, we ended the second quarter with a Desktop order backlog of approximately $750,000, all of which is scheduled to ship in this year's third quarter. 2 o Customer interest in our newly re-engineered Desktop product line has been strong, and we believe that will continue. o With this much said, I will now discuss several of our targeted markets. o Today, medical imaging is our fastest growing market, which is remarkable when you consider that we were not involved in this arena as recently as two years ago. o Our medical imaging sales have been strong throughout 2003, reflecting the effectiveness of our strategy of establishing strategic partnerships with industry-leading VARs. o It is interesting to note that the majority of our new VARs are vertically integrated in the medical imaging arena. o These new VARs obviously feel that Rimage has something of interest and substance to offer the medical imaging industry. o Thus far, substantially all of our sales have been made into the after-market, where existing medical imaging installations are converted to provide digital output on CD/DVD media, in addition to conventional analog film. o 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. o 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. o We are also pursuing promising opportunities for integrating our CD/DVD publishers into the imaging systems of leading OEMs of medical imaging equipment. o Assuming we are successful with these OEM initiatives, it would be logical to assume that our medical imaging sales would gain added momentum. o The news on the digital photography front is also encouraging. 3 o Sales of CD publishers to European wholesale photo finishing labs were quite strong in the second quarter, and the outlook for this European market remains positive. o The possibility also exists for sales to U.S. wholesale labs during the second half of this year. o In addition, we are aggressively pursuing opportunities in the mini or one-hour lab segment of the digital photography market. o We continue to believe it is only a matter of when, not if, major retail chains start the process of converting their one-hour labs to digital output. o Our new DiscLab system, which is designed specifically for the labs in tens of thousands of retail establishments, has been integrated into the equipment of every major OEM of mini lab equipment. o Through our OEM partners, we are currently engaged in discussions with several major retail chains. o I will conclude my remarks by reviewing the financial guidance included in our second quarter earnings release. o For the third quarter of 2003 ending September 30, we are forecasting earnings of $0.19 to $0.21 per diluted share on revenues of $13.0 million to $14.0 million. o Quarterly sales in this range would be the strongest in Rimage's recent history. o In summary, I simply want to emphasize that Rimage is performing at a high level despite a persistently sluggish economy. o We believe this reflects steadily growing recognition of the inherent advantages of CD/DVD technology over certain conventional information technologies. o Our performance also reflects the strength of our global distribution channel, which should be recognized as one of Rimage's greatest strengths. 4 o All in all, the combination of our technologies, our distribution channel and our sharp focus on strategic markets makes us very optimistic about Rimage's prospects over the balance of 2003. o Thank you. Now, Rob Wolf will review our second quarter results in some detail. ================================================================================ ROB WOLF REMARKS RIMG 2Q03 CONFERENCE CALL ================================================================================ o Thanks, Bernie o International sales made a strong contribution to our second quarter results. o Sales in Europe, Latin America and Asia accounted for 43% of our second quarter total, with European sales continuing to account for the great majority of our overseas volume. o Currency effects increased our worldwide sales by 7.2% in this year's second quarter and by 7.4% for the first half of 2003 o Reflecting the steady expansion of our worldwide installed base of CD/DVD publishing systems, sales of consumable supplies, including maintenance contracts, cartridges, printer ribbons, media and parts, increased 40% in the second quarter from the year-earlier level. o Recurring revenues accounted for 30% of our total second quarter sales. o As you may know, our old Desktop product line included a printer that was manufactured by a competitor. o As a result, we realized no recurring revenues on sales of replacement cartridges for that printer. o Our new Desktop line incorporates a new inkjet printer based on HP technology, and we are now realizing a recurring revenue stream on sales of replacement cartridges for this printer. 5 o As Desktop sales continue to grow, we would anticipate a further expansion of high-margin recurring revenues. o Rimage's second quarter gross margin was 50%, which was unchanged from both the year-earlier period and this year's first quarter. o R&D expense of $927,000, or 7% of sales, was down from $1,013,000, or 8% of sales, in last year's second quarter. o Selling, general and administrative expense increased 13% in the second quarter to $2.8 million or 22% of sales, reflecting investments in sales and marketing programs aimed at strengthening Rimage's penetration of its targeted markets. o Reflecting the impact of the higher SG&A expense, our operating margin of 20% was down slightly from 21% in last year's second quarter but was unchanged in comparison to this year's first quarter. o Finally, Rimage's effective tax rate was unchanged at 36.5% in the second quarter. o Turning now to the balance sheet, cash and investments totaled $40 million at June 30, 2003, up from $36.3 million at the end of 2002. o We attained this strong cash increase despite increased inventories for this period, which resulted primarily from delayed introduction of our new Desktop product line. o Now that shipments of this new product are underway, we expect inventories to decline by the end of the third quarter. o Shareholders' equity improved to $47 million at the end of the second quarter, from $42.2 million at year-end 2002. o 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-----