-----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, Rk0Ax5vL17pI/yj6Bm34xgDrDAA9gZX5BsI2Z2JQAWFWx0GMF9z66gS7QkFTIBZ1 MRJYqTB6FHzT750le/TXHA== 0000897101-03-001318.txt : 20031023 0000897101-03-001318.hdr.sgml : 20031023 20031022174131 ACCESSION NUMBER: 0000897101-03-001318 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031022 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031023 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: 03952714 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 rimage034512_8k.txt 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): October 22, 2003 RIMAGE CORPORATION ------------------ (Exact name of Registrant as specified in its charter) Minnesota 0-20728 41-1577970 --------- ------- ---------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) 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 1-6 and 8-11 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 October 22, 2003. 99.2 Statements of Bernard P. Aldrich and Robert M. Wolf for telephone conference held on October 22, 2003. ITEM 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. Rimage Corporation hereby furnishes a press release, issued on October 22, 2003, disclosing material non-public information regarding its results of operations for the quarter ended September 30, 2003 and statements of the Company's Chief Executive Officer and Chief Financial Officer made on October 22, 2003 at a telephone conference relating to the Company's quarter ended September 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: October 22, 2003 EX-99.1 3 rimage034512_ex99-1.txt EXHIBIT 99.1 RIMAGE REPORTS STRONG THIRD QUARTER OPERATING RESULTS NATIONAL RETAILER FIELD TESTING RIMAGE'S CD PUBLISHING SYSTEMS IN ITS ONE-HOUR PHOTO DEVELOPING LABS MINNEAPOLIS, MN--OCTOBER 22, 2003--Rimage Corporation (Nasdaq NMS: RIMG) today reported sales of $13,791,000 foR the third quarter of 2003 ended September 30, an increase of 10% from $12,555,000 in the year-earlier period and also up from $12,791,000 in this year's second quarter. Net income for the third quarter of 2003 came to $1,980,000 or $0.20 per diluted share, up from $1,879,000 or $0.20 per diluted share in last year's third quarter and also up from $1,717,000 or $0.18 per diluted share in the second quarter of 2003. Rimage's operating results for the current quarter were consistent with previously-issued financial guidance. Bernard P. (Bernie) Aldrich, president and chief executive officer, commented: "Rimage continued to perform at a high level in this year's third quarter. Our solid, on-plan performance was fueled, in part, by growing demand for our Desktop publishing line for business office applications and strong sales of CD/DVD publishing systems in the European marketplace. Throughout the past year, we have benefited from the strength of our global distribution channel and the steadily growing acceptance of our industry-leading CD/DVD publishing technology in our targeted markets, including digital photography, medical imaging, banking and finance, and government. Given these factors, we believe the fourth quarter is shaping up as another good period for Rimage." Aldrich added: "To help determine the acceptance by consumers of having their photographs published on CDs, a major national retailer has started field testing our DiscLab CD publishing equipment in a significant number of its in-store photo labs in one of its local markets. Our DiscLab equipment has been integrated into the digital, one-hour photo-finishing lab system of a strategic partner that serves this national retailer." THIRD QUARTER HIGHLIGHTS o International sales increased 25% in the third quarter versus the year-earlier period and accounted for 39% of total third quarter revenues, compared to 35% of total sales in the third quarter of 2002. Currency effects increased worldwide sales by 5% in this year's third quarter. o Recurring revenues, including sales of maintenance contracts, printer ribbons and cartridges, parts and CD/DVD media, increased 14% in the third quarter from the year-earlier period and accounted for 29% of total sales. The ongoing growth of recurring revenues reflects continued expansion of Rimage's worldwide installed base of CD/DVD publishing systems. o Rimage ended the quarter with a production backlog of approximately $750,000, all of which is expected to ship in the fourth quarter. o Selling, general and administrative expense increased 12% in the third 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 $43.4 million at September 30, 2003, an increase of $7.1 million or 20% from $36.3 million at the end of 2002. Rimage's balance sheet remains debt-free, while shareholder's equity rose to $49.4 million at September 30, 2003, from $42.2 million at year-end 2002. In other developments, Rimage was recently named to Forbes magazine's list of "America's 200 Best Small Companies," based on rankings of sales, profits, five-year average return on equity and market value. In addition, Rimage's new Protege II DVD publishing system recently received the Editor's Choice Award from E Media magazine. FOURTH QUARTER 2003 GUIDANCE For the fourth quarter of 2003 ending December 31, Rimage is forecasting earnings of $0.20 to $0.22 per diluted share on revenues of $13.5 million to $14.5 million. Rimage reported earnings of $0.17 per diluted share on revenues of $11.8 million in the fourth quarter of 2002. 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 Rimage's anticipated performance in 2003 are forward-looking and therefore involve risks and uncertainties, including but not limited to: market conditions in the computer peripherals market, competitive products, changes in technology, conditions in overseas markets that could affect international sales, and other factors set forth in Rimage'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 800/522-1744 or 612/338-0810 952/944-8144 =============================================================================== RIMAGE CORPORATION Selected Consolidated Financial Information (In thousands except per share data) (Unaudited) Consolidated Statement of Operations Information:
Three months ended Nine months ended September 30, September 30, 2003 2002 2003 2002 ------- ------- ------- ------- Revenues $13,791 $12,555 $38,126 $34,751 Cost of Revenues 7,109 6,407 19,377 17,749 Gross Profit 6,682 6,148 18,749 17,002 Operating Expenses: Research and Development 867 852 2,642 2,742 Selling, General and Administrative 2,798 2,502 8,255 7,304 Total Operating Expenses 3,665 3,354 10,897 10,046 Operating Income 3,017 2,794 7,852 6,956 Other Income, Net 101 165 338 625 Income Before Income Taxes 3,118 2,959 8,190 7,581 Income Tax Expense 1,138 1,080 2,989 2,767 Net Income 1,980 1,879 5,201 4,814 Net Income Per Basic Share $.22 $.22 $.59 $.55 Net Income Per Diluted Share $.20 $.20 $.54 $.51 Basic Weighted Average Shares Outstanding 9,067 8,712 8,873 8,698 Diluted Weighted Average Shares Outstanding 9,834 9,521 9.670 9,495
Consolidated Balance Sheet Information: Balance as of ------------------------------------ September 30, December 31, 2003 2002 -------------- ------------ (Unaudited) Cash and Marketable Securities $43,436 $36,337 Accounts Receivable 7,464 6,644 Inventories 4,128 3,042 Total Current Assets 56,165 47,337 Property and Equipment, Net 1,144 1,314 Total Assets 57,365 48,709 Current Liabilities 7,975 6,552 Stockholders' Equity 49,390 42,157 CONFERENCE CALL AND REPLAY Rimage Corporation will review its third quarter operating results in a conference call at 4:30 PM Eastern today. Investors 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. A replay of the conference call will be available through October 29 by dialing 303-590-3000 and providing the 555192 confirmation code. EX-99.2 4 rimage034512_ex99-2.txt Exhibit 99.2 BERNIE ALDRICH REMARKS RIMG 3Q03 CONFERENCE CALL ================================================================================ o Good afternoon and thanks for taking the time to participate in our third 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 any guidance or other forward-looking statements unless they are simultaneously released to the public, we have provided financial guidance in our third quarter release. o Our guidance is subject to a number of risks that could affect our anticipated performance. o These risks are set forth in our filings with the Securities and Exchange Commission, which we urge you to review. o Turning now to the subject of this conference call, the third quarter was another solid period for Rimage, as we reported higher sales and earnings on both a year over year and sequential basis. o Third quarter sales of $13.8 million and earnings of approximately $2.0 million were also consistent with our previously issued guidance for this period. o Our third quarter results were generated by a very balanced sales effort, with no single customer or market accounting for a disproportionately large share of our third quarter sales. o Our targeted markets, which include digital photography, medical imaging, banking and finance, and government, accounted for 64% of our third quarter sales total. o We also benefited from another solid contribution from our European operation, which posted third quarter sales growth of 32% and accounted for 34% of our total sales volume for this period. o In addition, our third quarter performance was fueled by growing sales of our re-engineered Desktop line of CD/DVD publishers, which are starting to penetrate a variety of lower-volume applications in business office environments. o The strong growth of the Desktop line is particularly encouraging, since we are still in the process of building a specialized distribution channel for this product. 1 o We believe the outlook for this lower-priced, user-friendly system is very encouraging. o Finally, we ended the third quarter with an order backlog of approximately $750,000, all of which is scheduled to ship before December 31. o Now, I will now discuss several important recent business developments. o To help determine acceptance by consumers for having their photographs published on CDs, a major national retailer recently started field testing our DiscLab CD publishing equipment in a significant number of its in-store, one-hour photo labs in one of its local markets. o To support this major retail test, our DiscLab equipment was integrated into the photo-finishing system of a strategic partner that serves this national retailer. o Consequently, DiscLab functions as the digital output solution for publishing film-based or digital camera pictures on a CD. o Additional field trials of our equipment are also underway in the retail photo labs of several other national retailers. o To further strengthen our focus on our targeted markets, we made several key appointments during the third quarter. o Manny Almeida, formerly an executive with Fuji Photo Film USA, joined Rimage as executive vice president. o Manny, who had been with Fuji for 23 years, served as vice president and general manager of Fuji's Commercial Imaging division since 1999. o He previously held the same position for Fuji's Digital Imaging division, where he launched Fuji's consumer digital camera initiative as part of the digital branding strategy that he developed. o Given his strong industry background, we believe Manny will be instrumental in helping Rimage pursue promising opportunities in the digital photography and medical imaging markets. o In another key appointment, we hired T. Luke Wigger, who was formerly regional business manager for Kodak's Health Imaging division, as vice president of business development and medical markets. o Luke held various management positions in sales, marketing and operations during his 15 years with Kodak's Health Imaging Division, which manufactures and markets a wide range of radiography products. 2 o He also previously served as administrative director of radiology for two hospitals. o We are confident that Luke's extensive and focused background will facilitate our efforts at further penetrating the medical imaging arena, which has been our fastest growing market in recent periods. o I will conclude my remarks by reviewing the financial guidance included in today's earnings release. o For the fourth quarter of 2003 ending December 31, we are forecasting earnings of $0.20 to $0.22 per diluted share on revenues of $13.5 million to $14.5 million. o Fourth quarter results at these levels would lead to full-year 2003 sales of approximately $51.5 to $52.5 million and earnings of $0.74 to $0.76 per diluted share. o This would be an excellent outcome for the current year. o We have remained strongly and consistently profitable throughout an extended period of weak economic conditions, a performance that we believe bodes well for our prospects in a strengthening economy. o We are very optimistic about our future and continue to believe that Rimage's best years are yet to come. o Thank you. Now, Rob Wolf will review our third quarter results in some detail. 3 ROB WOLF REMARKS RIMG 3Q03 CONFERENCE CALL ================================================================================ o Thanks, Bernie o Our business remained on a fairly steady course during the third quarter, meaning that we experienced no real surprises and that certain prior trends continued to have a positive impact on our performance. o For example, international sales and recurring revenues again made strong contributions to our third quarter results. o Our top line also benefited from growing sales of the Desktop product line. o Since our old Desktop product line incorporated a printer that was manufactured by a competitor, we received no recurring revenues on sales of replacement cartridges for that printer. o Our new Desktop line includes an inkjet printer based on HP technology, and we are now realizing a recurring revenue stream on sales of replacement cartridges for this printer. o As Desktop sales continue to grow, we would anticipate a further expansion of recurring revenues. o Reflecting a shift in our third quarter sales mix toward the Desktop line, which carries somewhat lower margins than our Producer line, Rimage's third quarter gross margin was 48%, down from 49% in the year-earlier period and 50% in this year's second quarter. o R&D expense of $867,000, or 6% of sales, was largely unchanged from last year's third quarter. o Selling, general and administrative expense increased 12% in the third quarter to $2.8 million, due to investments in sales and marketing programs aimed at strengthening Rimage's penetration of its targeted markets. o However, as a percentage of sales, SG&A remained unchanged at 20% on a year over year basis but was down from 22% in this year's second quarter. o Reflecting the impact of the quarter's higher sales volume, our operating margin of 22% was up from 20% in this year's second quarter and unchanged from last year's third quarter. o Turning now to our balance sheet, cash and investments totaled $43.4 million at September 30, 2003, up from $36.3 million at the end of 2002. 4 o Due to our strong margins and relatively low capital requirements, we continue to generate strong operating cash flows. o Our strong cash increase was attained despite increased inventories, which rose to $4.1 million at the end of the third quarter from $3.0 million at year-end 2002. o A number of factors help explain this increase. o Most importantly, we elected to increase inventories of Everest printers, which are manufactured in Asia by Alps, to provide us with a cushion in the event of another SARS outbreak as well as in the event of a significant customer order. o Reflecting our strong emphasis on service and support, we have also increased our parts inventories. o And relatedly, we have had to increase stocks of printer ribbons and cartridges due to our growing worldwide installed base. o Given all of these factors, we believe it is unrealistic to expect inventories to return to prior levels in the range of $3.0 million. o Instead, we believe inventories should trend downward over the next several quarters to the general vicinity of $3.5 million. o Finally, shareholders' equity rose to $49.4 million at the end of the third 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. 5 -----END PRIVACY-ENHANCED MESSAGE-----