8-K

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): February 19, 2008

Rimage Corporation

(Exact name of Registrant as Specified in its Charter)

Minnesota

(State Or Other Jurisdiction Of Incorporation)

000-00619	41-1577970
(Commission File Number)	(I.R.S. Employer Identification No.)
7725 Washington Avenue South Minneapolis, MN	55439
(Address Of Principal Executive Offices)	(Zip Code)

(952) 944-8144

Registrant’s Telephone Number, Including Area Code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Items under Sections 1, 3, 4 and 6 through 8 are not applicable and therefore omitted.

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Rimage Corporation (the “Company”) hereby furnishes a press release, issued on February 20, 2008, disclosing material non-public information regarding its results of operations for the year and quarter ended December 31, 2007 and hereby furnishes statements of its Chief Executive Officer and Chief Financial Officer made on February 20, 2008 at a telephone conference relating to the year and quarter ended December 31, 2007 results.

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

Establishment of 2008 Incentive Plan

On February 18 2008, the Compensation Committee approved and on February 19, 2008, the Board of Directors of the Company ratified the establishment of the Company’s cash incentive compensation program for 2008 (the “2008 Incentive Plan”) for the Company’s current executive officers. The current executive officers are the Company’s Chief Executive Officer, Bernard P. Aldrich; the Company’s Chief Financial Officer, Robert M. Wolf; the Company’s Executive Vice President of Sales and Marketing, Manual M. Almeida; and the Company’s Vice President Planning and Organization Development, Pamela V. Lampert. While David J. Suden was a executive officer in fiscal year 2007, and a Named Executive Officer with respect to that year, he ceased serving in that capacity as of December 31, 2007 and is not eligible to participate in the 2008 Incentive Plan.

Under the 2008 Incentive Plan, the Compensation Committee determined minimum, target and maximum goals relating to sales and operating income in the form of a matrix comprised of incrementally increasing percentages of sales growth over the prior fiscal year and incrementally increasing percentages of operating income as a percentage of sales. No bonus amounts will be earned by any executive officer in the event the minimum goals are not achieved and no amounts will be paid out under the 2008 Incentive Plan unless the minimum sales goal is met. The Compensation Committee also approved the cash bonuses that executive officers may earn under the 2008 Incentive Plan based upon percentages of their respective salaries. The following table shows the bonus amounts as a percentage of salary that will be earned by the executive officers under the 2008 Incentive Plan upon the Company’s achievement of the minimum, target and maximum goals relating to sales and operating income.

Executive Officer and Title	Bonus Payout Under 2008 Incentive Plan As a Percentage of 2008 Base Salary
	Minimum Goals Achieved	Target Goals Achieved	Maximum Goals Achieved
Bernard P. Aldrich Chief Executive Officer	30%	60%	120%
Manuel M. Almeida Senior Vice President of Sales and Marketing	25%	50%	100%
Robert M. Wolf Chief Financial Officer	25%	50%	100%
Pamela V. Lampert Vice President Planning and Organization Development	20%	40%	80%

2008 Base Salaries for Executive Officers

On February 18, 2008, the Compensation Committee approved, and on February 19, 2008, the Board of  Directors ratified, base salaries for 2008 for the current executive officers as follows:

Name of Executive Officer	2008 Annual Base Salary
Bernard P. Aldrich	$	354,000
Manuel M. Almeida	$	265,000
Robert M. Wolf	$	210,000
Pamela V. Lampert	$	167,000

2007 Incentive Plan Payout

On February 18, 2008, the Compensation Committee approved, and on February 19, 2008, the Board of Directors ratified, cash bonuses under the Company’s 2007 cash incentive compensation program for executive officers (the “2007 Incentive Plan”). The following table summarizes the payouts under the 2007 Incentive Plan t o the Company’s current executive officers:

Name of Executive Officer	2007 Incentive Plan Award Amount
Bernard P. Aldrich	$	177,480
Manuel M. Almeida	$	115,275
Robert M. Wolf	$	82,650
Pamela V. Lampert	$	55,680

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit No.	Description
99.1	Press Release issued on February 20, 2008.
99.2	Statements of Bernard P. Aldrich, Chief Executive Officer, and Robert M. Wolf, Chief Financial Officer, at a telephone conference held on February 20, 2008.

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

Date:   February 20, 2008

EX-99.1

Exhibit 99.1

Rimage Reports Record Revenues and Earnings in 2007

Additional 500,000 Share Repurchase Authorized

Minneapolis, MN—February 20, 2008—Rimage Corporation (Nasdaq: RIMG) today reported revenues of $108,874,000 for the year ended December 31, 2007, up from $103,252,000 in 2006. Net income was $15,761,000 or $1.52 per diluted share, up 20% from $13,084,000 or $1.26 per diluted share in 2006.

For the fourth quarter of 2007, sales were $28,212,000, compared to $30,519,000 in the year-earlier period. Fourth quarter earnings were $4,515,000 or $0.45 per diluted share, up 25% from $3,625,000 or $0.34 per diluted share in the fourth quarter of 2006.

Rimage’s Board of Directors today issued a 500,000 share repurchase authorization, which is in addition to the previous 500,000 share buyback authorization. Since no shares were acquired in the fourth quarter of 2007 under the prior authorization, a total of 1,000,000 shares are now available for repurchase. Under both authorizations, shares can be purchased at prevailing market prices in the open market or in private transactions, subject to market conditions, share price, trading volume and other factors. This program can be discontinued at any time.

Bernard P. (Bernie) Aldrich, president and chief executive officer, commented: “Rimage’s fourth quarter sales were generated primarily by our global distribution channel. As expected, we recorded no significant orders from national retailers, which is the primary reason for the lower revenue when compared to the fourth quarter of 2006. Our fourth quarter earnings benefited from increased channel sales of Rimage’s Producer line. We also benefited from improved pricing on this product line. These factors contributed to our fourth quarter gross margin of 48%. Last year’s fourth quarter gross margin of 45% was affected by a writedown of approximately $648,000 related to the low-end 360i product line. Our fourth quarter earnings also benefited from lower operating expenses, reflecting the completion of several product development and SAP initiatives.”

He continued: “A significant portion of Rimage’s growth over the past few years has been generated by our ability to successfully penetrate the retail and medical imaging markets with our digital output solutions. We will continue to pursue opportunities in these markets. At the same time, we are starting to address untapped opportunities for our disc publishing technology in a number of large business service markets, including media and broadcasting, law enforcement, education, government, software and professional services. We expect business service applications to help drive Rimage’s future growth, and we plan to focus our resources toward building positions in these markets similar to what we have achieved in the retail and medical markets.”

Aldrich added: “At this time, we believe 2008 should be another year of progress and improved operating results for Rimage, and for the first quarter of 2008 ending March 31, we are forecasting earnings of $0.21 to $0.26 on revenues of $22 to $24 million.”

Financial Highlights

Recurring revenues, including sales of printer ribbons and cartridges, parts, blank CD/DVD media and maintenance contracts, increased 6% in the fourth quarter of 2007 and accounted for 54% of sales, compared to 47% in the fourth quarter of 2006. Sales of consumables, which lend a measure of stability and predictability to Rimage’s revenue stream, are benefiting from the Company’s growing installed base of disc publishing systems in retail and other markets.

International sales increased 18% in the fourth quarter and accounted for 44% of total sales, compared to 34% of total sales in the year-earlier period. Sales generated by Rimage’s large European operation, which is being strengthened with new management personnel and an expanded sales and marketing organization, grew 15% in the fourth quarter. Sales in Asian markets increased 39% during this period, reflecting efforts aimed at strengthening the reach of Rimage’s Tokyo sales office. Currency effects increased worldwide sales by 4% in the fourth quarter of 2007.

Cash and investments totaled $94.2 million at the end of the fourth quarter, compared to $84.9 million at the end of the third quarter and $77.4 million at December 31, 2006.

About Rimage

Rimage Corporation (www.rimage.com) is the world’s leading provider of recordable CD, DVD and BD 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, including photography, medical imaging, financial institutions, business offices, and government.

Statements regarding Rimage’s anticipated performance are forward-looking and therefore involve risks and uncertainties, including but not limited to: market conditions, 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	904/415-1415
952/944-8144

RIMAGE CORPORATION

Selected Consolidated Financial Information

(In thousands except per share data)

(Unaudited)

Consolidated Statement of Operations Information:

	Three months ended December 31,				Twelve months ended December 31,
	2007		2006		2007		2006
Revenues	$	28,212	$	30,519	$	108,874	$	103,252
Cost of Revenues		14,615		16,856		57,719		56,014
Gross Profit		13,597		13,663		51,155		47,238
Operating Expenses:
Research and Development		1,280		1,956		5,903		6,738
Selling, General and Administrative		6,079		6,612		24,371		22,726
Total Operating Expenses		7,359		8,568		30,274		29,464
Operating Income		6,238		5,095		20,881		17,774
Other Income, Net		904		687		3,513		2,684
Income Before Income Taxes		7,142		5,782		24,394		20,458
Income Tax Expense		2,627		2,157		8,633		7,374
Net Income		4,515		3,625		15,761		13,084
Net Income Per Basic Share	$	0.46	$	0.37	$	1.59	$	1.33
Net Income Per Diluted Share	$	0.45	$	0.34	$	1.52	$	1.26
Basic Weighted Average Shares Outstanding		9,686		9,899		9,915		9,812
Diluted Weighted Average Shares Outstanding		10,093		10,424		10,371		10,356

Consolidated Balance Sheet Information:

	Balance as of
	December31, 2007		December31, 2006
Cash and Marketable Securities	$	59,021	$	38,766
Accounts Receivable		14,447		21,697
Inventories		8,075		6,072
Total Current Assets		85,527		70,116
Property and Equipment, Net		3,206		3,626
Marketable Securities – Non-Current		35,201		38,594
Total Assets		125,096		112,359
Current Liabilities		17,882		16,163
Long-Term Liabilities		2,153		720
Stockholders’ Equity		105,061		95,476

Conference Call and Replay

Rimage Corporation will review its fourth quarter operating results in a conference call at 10:00 AM 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 can be heard through February 28, 2008 by dialing 1-303-590-3000 and providing the 11099311 confirmation code.

EX-99.2

Exhibit 99.2

Remarks of Bernard P. Aldrich

Rimage Corporation 4th Quarter and FYE 2007 Conference Call

February 20, 2008

§ Good morning and thank you for taking the time to participate in our fourth quarter earnings conference call.

§ Joining me today is Rob Wolf, our chief financial officer, who will review our recent operating results in some detail.

§ Also with us is Manny Almeida, our executive vice president of sales and marketing, and Dave Suden.

§ We will be pleased to take your questions at the conclusion of our opening remarks.

§ Since Regulation FD prohibits us from providing any forward-looking statements unless they are simultaneously released to the public, we have provided financial guidance for the first quarter of 2008 in this morning’s release.

§ It is important to understand that this guidance is subject to a number of risks that could affect our anticipated performance.

§ These risks are set forth in our filings with the Securities and Exchange Commission, which we urge you to review.

§ Turning now to the subject of this conference call, our fourth quarter sales were $28.2 million, compared to $30.5 million in the year-earlier period.

§ Our earnings came to $4.5 million or $0.45 per diluted share, up 25% from $3.6 million or $0.34 per diluted share in the fourth quarter of 2006.

§ For full-year 2007, Rimage reported revenues of $108.9 million, up from $103.3 million in 2006.

§ Net income was $15.8 million or $1.52 per diluted share, up 20% from $13.1 million or $1.26 per diluted share in 2006.

§ These full-year results made 2007 Rimage’s sixth consecutive year of improved sales and earnings.

§ Also as announced in this morning’s release, Rimage’s Board of Directors issued a 500,000 share repurchase authorization, which comes in addition to the previous 500,000 share buyback authorization.

§ Since no shares were acquired in the fourth quarter of 2007 under the prior authorization, a total of 1,000,000 shares are now available for repurchase.

§ Turning now to our recent operating results, Rimage’s fourth quarter sales were generated across a range of markets, primarily by our global distribution channel.

§ Strengthening our distribution channel has been and remains a primary management focus, and we believe the progress that we have made in this area will enable our channel to drive a significant portion of Rimage’s sales in 2008 and beyond.

§ As previously forecasted, we recorded no significant orders from national retailers for Producer hardware during this period, which was the primary reason for our lower revenues in comparison to the fourth quarter of 2006.

§ However, our fourth quarter earnings benefited from increased channel sales of Rimage’s Producer equipment.

§ We also benefited from an improved average selling price on this product line.

§ These factors helped drive our fourth quarter gross margin to 48% from 45% in last year’s fourth quarter, when our gross margin was affected by a writedown of approximately $648,000 related to the low-end 360i product line.

§ Our fourth quarter earnings also benefited from lower operating expenses, reflecting the completion of several product development and SAP initiatives.

§ A significant portion of Rimage’s highly profitable growth over the past few years has been generated by our ability to successfully penetrate the retail and medical imaging markets with our digital publishing solutions.

§ The large retail orders that we have received for our Producer hardware are an indication that our equipment has become the retail industry standard for the on-demand publishing of digital data on CDs, DVDs and Blu-ray discs.

§ The same is true of our digital publishing solutions in the medical imaging market, where our systems have become the industry standard for PACS installations in large U.S. hospitals and clinics.

§ We continue to see good opportunities in these markets, both here and overseas, that we will pursue aggressively in the years ahead.

§ Video-on-demand and the production of DVDs that include any combination of pictures, video and music are two new retail opportunities.

§ In the medical arena, we have started targeting smaller PACS installations and such additional modalities as mammography.

§ Beyond the retail and medical markets, we also see significant, untapped opportunities for our disc publishing technology in a number of large business service markets.

§ Some of these include media and broadcasting, law enforcement, education, government, software and professional services.

§ We believe business service applications will drive a significant portion of our growth over the next few years, and we intend to devote considerable resources toward building positions in these areas similar to what we have achieved in the retail and medical markets.

§ Now, I will turn to the financial guidance contained in this morning’s release.

§ We believe the first quarter of 2008 should be another period of progress and improved operating results for Rimage, and we are forecasting earnings of $0.21 to $0.26 per diluted share on revenues of $22 to $24 million.

§ In closing, I want to say that we are optimistic about Rimage’s future.

§ The new applications and markets that we are pursuing in the Americas Europe and Asia hold substantial long-term opportunity, and we are extremely well-positioned to capitalize upon those opportunities.

§ Thank you. Now Rob Wolf will review our fourth quarter results in some detail.

Remarks of Robert M. Wolf

Rimage Corporation 4th Quarter and FYE 2007 Conference Call

February 20, 2008

§ Thanks, Bernie.

§ First, I will run through a few highlights about our fourth quarter sales.

§ Recurring revenues, including sales of printer ribbons and cartridges, parts, blank CD/DVD media and maintenance contracts, increased 6% in the fourth quarter of 2007 and accounted for 54% of sales, compared to 47% in the fourth quarter of 2006.

§ We expect consumables sales growth to accelerate in 2008 as our equipment is fully installed in the retail stores involved with the significant retail orders that we received over the past year.

§ As of today, Rimage’s disc publishing systems are installed in the photo departments of more than 3,500 stores nationally.

§ International sales increased 18% in the fourth quarter and accounted for 44% of total sales, compared to 34% in the fourth quarter of 2006.

§ Sales from our European operation, which generated the majority of our international sales, increased 15% in the fourth quarter, while sales in Asian markets increased 39%.

§ Currency effects increased worldwide sales by 4% in the fourth quarter of 2007.

§ Rimage’s gross margin was 48% in the fourth quarter, down from 49% in this year’s third quarter and up from 45% in the fourth quarter of 2006, when our gross margin was affected by a write-down of approximately $648,000 related to the low-end 360i product line.

§ As Bernie mentioned previously, our gross margin in this year’s fourth quarter benefited from increased channel sales of Rimage’s Producer line.

§ We also benefited from an improved average selling price for this product line.

§ We are currently anticipating a gross margin in the mid-40% range in the first quarter of 2008.

§ Moving down the P&L, fourth quarter R&D expense came to $1.3 million, down from $1.6 million in the third quarter and $2.0 million in the fourth quarter of 2006.

§ The sequential quarterly and year-over-year decreases in R&D reflect the completion of several important product development initiatives.

§ R&D spending in the first quarter of 2008 is forecasted to be 5% to 10% above the fourth quarter level.

§ Selling, general and administrative expense, which includes stock compensation expense, totaled $6.1 million in this year’s fourth quarter, compared to $6.2 million in the third quarter and $6.6 million in the fourth quarter of 2006.

§ In the fourth quarter of 2006, our SG&A included costs related to the implementation of our new enterprise resource planning system both in the U.S. and Europe.

§ Following these one-time expenditures, our SG&A declined to more normal levels during most of 2007, and we believe this expense category will be at or near the fourth quarter level in the first quarter of 2008.

§ We recorded an effective income tax rate of 37% in the fourth quarter, compared to 36% in the third quarter and 37% in the fourth quarter of 2006.

§ We believe our effective income tax rate for 2008 will be in the range of 35% to 37%.

§ Turning now to our balance sheet, Rimage is continuing to generate significant cash flows from internal operations.

§ Cash and investments totaled $94.2 million at the end of the fourth quarter, up from $84.9 million at the end of the third quarter and $77.4 million at December 31, 2006.

§ No shares were repurchased during the fourth quarter under our existing 500,000 share buyback authorization.

§ Stockholders’ equity came to $105.1 million at the end of the fourth quarter, compared to $98.8 million at the end of the third quarter and $95.5 million at December 31, 2006.

§ That wraps up our formal remarks, and now the conference call operator will poll you for any questions.