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): July 23, 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 and 3 though 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 July 23, 2008, disclosing material non-public information regarding its results of operations for the quarter ended June 30, 2008 and hereby furnishes statements of its Chief Executive Officer and Chief Financial Officer made on July 23, 2008 at a telephone conference relating to the quarter ended June 30, 2008 results.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit No.	Description
99.1	Press Release issued on July 23, 2008.
99.2	Statements of Bernard P. Aldrich, Chief Executive Officer, and Robert M. Wolf, Chief Financial Officer, at a telephone conference held on July 23, 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:   July 24, 2008

EX-99.1

EXHIBIT 99.1

Rimage Reports Second Quarter Sales and Earnings

Minneapolis. MN—July 23, 2008—Rimage Corporation (Nasdaq: RIMG) today reported sales of $22,686,000 for the second quarter of 2008 ended June 30, compared to $25,486,000 in the year-earlier period, when retail-related equipment sales totaled $4.3 million. There were no significant equipment sales into the retail market in the current quarter. Second quarter earnings of $1,927,000 or $0.19 per diluted share were down from $2,921,000 or $0.28 per diluted share in the comparable period of 2007.

Bernard P. (Bernie) Aldrich, president and chief executive officer, commented: “Although our performance continued to be affected by weak economic conditions, Rimage’s second quarter results exceeded the downwardly revised guidance that we issued on June 9, due primarily to higher than forecasted sales transacted through our global distribution channel during the latter stages of the quarter. This enabled us to report second quarter sales and earnings comparable to the results recorded in this year’s first quarter. Given the lengthened selling cycles for our disc publishing hardware that are a consequence of today’s difficult economic environment, the stabilization of our operating results on a sequential quarterly basis makes us optimistic about Rimage’s prospects once the economy begins to strengthen. At this time, we believe our performance should remain relatively stable, and consistent with this outlook, we are forecasting earnings of $0.17 to $0.23 per diluted share on revenues of $21 to $23 million for the third quarter of 2008.”

Aldrich added: “Our optimism about Rimage’s future is based on several factors. First, our field sales representatives are reporting interest in our optical technology among prospective customers representing a diverse range of applications. Second, our European operation is strengthening in response to its restructured management and new sales and marketing initiatives. Third, we are establishing the foundation required for penetrating several highly promising business services markets. To help capitalize on the large video production market, which we view as one of our best opportunities, we recently introduced software that supports video production houses utilizing Macintosh systems. At the same time, we have been adding value-added resellers focused on the video market and establishing strategic partnerships with key industry players. Fourth, in May, we instituted expense reductions totaling approximately $2.0 million on an annualized basis. We will begin to realize the impact of our streamlined cost structure in this year’s third quarter. Finally, we are moving forward with important enhancements to our disc publishing systems that will keep Rimage at the forefront of the on-demand disc publishing industry.”

Financial Review

Recurring revenues, including sales of printer ribbons and cartridges, parts, blank CD/DVD media and maintenance contracts, increased 10% in the second quarter of 2008 and accounted for 58% of sales, compared to 47% in the second quarter of 2007. Sales of consumables, which are benefiting from Rimage’s growing installed base of disc publishing systems in retail and other markets, accounted for a significantly larger portion of Rimage’s second quarter sales mix due to the economy-related slowdown in sales of disc publishing hardware.

International sales increased 23% in the second quarter and accounted for 47% of total sales, compared to 34% of total sales in the year-earlier period. This increase was due primarily to foreign currency effects. Rimage’s European operation accounted for the great majority of the second quarter’s international sales.

Cash and investments totaled $93.7 million at June 30, 2008, compared to $94.2 million at the beginning of 2008 and $86.9 million at the end of the second quarter of 2007. Rimage repurchased approximately 249,000 shares during the second quarter under two 500,000 share buyback authorizations. Approximately 725,000 shares remain available for repurchase under these authorizations.

About Rimage

Rimage Corporation (www.rimage.com) is the world’s leading provider of recordable CD, DVD and Blu-ray (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/BD production volumes, integrate robotics, software and surface label printers into a complete publishing solution. Rimage is focusing its CD/DVD/BD publishing solutions on a set of vertical markets with special needs for customized, on-demand digital information, including retail, medical and business services.

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 Statements of Income Information:

	Three months ended June 30,				Six months ended June 30,
	2008		2007		2008		2007
Revenues	$	22,686	$	25,486	$	45,435	$	47,012
Cost of revenues		12,772		14,088		25,844		25,866
Gross profit		9,914		11,398		19,591		21,146
Operating expenses:
Research and development		1,513		1,441		2,864		3,031
Selling, general and administrative		5,672		6,284		12,310		12,112
Total operating expenses		7,185		7,725		15,174		15,143
Operating income		2,729		3,673		4,417		6,003
Other income, net		287		759		1,369		1,588
Income before income taxes		3,016		4,432		5,786		7,591
Income tax expense		1,089		1,511		2,073		2,548
Net income		1,927		2,921		3,713		5,043
Net income per basic share	$	0.20	$	0.29	$	.38	$	.50
Net income per diluted share	$	0.19	$	0.28	$	.37	$	.48
Basic weighted average shares outstanding		9,662		10,105		9,712		10,042
Diluted weighted average shares outstanding		9,820		10,585		9,946		10,550

Consolidated Balance Sheet Information:

	Balance as of
	June 30, 2008		December 31, 2007
Cash and marketable securities	$	57,971	$	59,021
Receivables		13,851		14,447
Inventories		6,176		8,075
Total current assets		82,070		84,771
Property and equipment, net		2,921		3,206
Marketable securities – non-current		35,693		35,201
Total assets		122,883		125,096
Current liabilities		13,720		17,882
Long-term liabilities		2,079		2,153
Stockholders’ equity		107,084		105,061

Conference Call and Replay

Rimage Corporation will review its second 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 July 30, 2008 by dialing 1-303-590-3000 and providing the 11117486 confirmation code.

EX-99.2

EXHIBIT 99.2

Remarks of Bernard P. Aldrich

Rimage Corporation 2^nd Quarter FY 2008 Conference Call

July 23, 2008

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

§ Joining me today is Rob Wolf, our chief financial officer, who will review our recent operating results following my opening remarks.

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

§ We will be pleased to take your questions at the conclusion of our 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 third 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 second quarter sales totaled $22.7 million, compared to $25.5 million in the year-earlier period, when retail-related equipment sales totaled $4.3 million.

§ We recorded no significant retail sales in the current quarter.

§ Second quarter earnings of $1.9 million or $0.19 per diluted share were down from $2.9 million or $0.28 per diluted share in the comparable period of 2007.

§ Due to the impact of weak economic conditions on sales of disc publishing hardware, we issued downwardly revised guidance on June 9 for earnings of $0.09 to $0.12 per diluted share on revenues of $20.0 to $22.0 million.

§ Our second quarter results exceeded this revised guidance due primarily to higher than forecasted sales transacted through our global distribution channel during the latter stages of the quarter.

§ This enabled us to report second quarter sales and earnings consistent with the results recorded in this year’s first quarter.

§ Given the lengthened selling cycles for our disc publishing hardware that are a consequence of today’s difficult economic environment, the stabilization of our operating results on a sequential quarterly basis makes us optimistic about Rimage’s prospects once the economy begins to strengthen.

§ I want to emphasize that our recent performance is not indicative of any fundamental problem with Rimage’s operations.

§ Rather, the weak and uncertain economy has caused many prospective users of our equipment to become highly cautious with regard to their purchasing decisions.

§ Our response to this challenging economic environment has been to work even harder on the sales front.

§ We know business is available to us, because our field sales representatives have been reporting significant interest in our optical technology among prospective customers representing a diverse range of applications.

§ As economic conditions improve, we believe these prospects, many of whom are now limiting their capital spending, could place orders for our systems.

§ At the same time, we are undertaking a careful review of each of our distribution partners as we explore new ways to expand the penetration of the full line of Rimage products and services into our new and existing customer base.

§ Our European operation also is demonstrating signs of strengthening in response to the sales and marketing initiatives implemented by its new management team.

§ We expect our European business to show continued progress over the balance of 2008.

§ In addition, we are establishing the foundation required for penetrating several highly promising business services markets.

§ One of the strongest business services opportunities for our optical technology involves the media and broadcasting market.

§ Large production houses currently use DVDs for editing, producing, distributing and archiving video content.

§ Many of these large operations, including Disney, already use Rimage’s CD/DVD digital publishing systems, but they now will be transitioning to high-capacity Blu-ray technology.

§ This conversion process will require new or additional Rimage equipment from these current customers.

§ Our greatest opportunity in the broadcasting and media market involves thousands of small and mid-sized pre- and post-production houses.

§ Many of these studios currently archive and distribute their video content on magnetic tape.

§ With the movement toward digital and high definition formats, these facilities are starting to convert to DVD and Blu-ray discs as their preferred output.

§ To capitalize upon these opportunities, we recently introduced new software designed specifically for Macintosh-based audio/visual production environments.

§ This was a critically important development, since Apple has close to a 50% share of the video editing market.

§ In addition, we have added more than 30 value-added resellers focused on the video market and established strategic partnerships with key industry players.

§ Given all of these developments, we feel we have done an effective job of laying the foundation required for penetrating this market.

§ Like the retail market, penetrating the media and broadcasting market will not be an overnight event, because the conversion to Blu-ray and digital formats involves a major paradigm shift for many small and mid-sized studios.

§ But unlike the retail market, this new opportunity will probably unfold as an extended series of medium-sized orders in comparison to the relatively small number of extremely large orders that our retail customers typically have placed.

§ As a result, we would expect Rimage’s sequential quarterly results to become less lumpy or uneven and somewhat more predictable.

§ Beyond the area of sales and marketing, we have taken two additional measures to help ensure a successful future.

§ First, we are moving forward with the development of important next-generation disc publishing systems that will keep Rimage at the forefront of the on-demand disc publishing industry.

§ The second quarter introduction of our next-generation color printer, the Everest 600, was the first result of this process.

§ Other new and upgraded products are in our product development pipeline.

§ And second, we have instituted cost reductions totaling approximately $2 million on an annualized basis.

§ Enacted at the time of our second quarter earnings pre-release, these cost reductions will take full effect in this year’s third quarter.

§ I will conclude my remarks by commenting on our financial guidance for the third quarter ending September 30.

§ At this time, we believe our performance should remain relatively stable in comparison to the first and second quarters.

§ Consistent with this outlook, we are forecasting earnings of $0.17 to $0.23 per diluted share on revenues of $21 to $23 million for the third quarter of 2008.

§ We believe the forecasted stabilization of our operating results amid challenging economic conditions is evidence of the underlying strength of this business.

§ And given the actions that we are taking today, we have every reason to believe that Rimage’s future is very promising.

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

Remarks of Robert M. Wolf

Rimage Corporation 2^nd Quarter FY 2008 Conference Call

July 23, 2008

§ Thanks, Bernie

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

§ Recurring revenues, including sales of printer ribbons and cartridges, parts, blank CD/DVD media and maintenance contracts, increased 10% in the second quarter of 2008 and accounted for 58% of sales, compared to 47% in the second quarter of 2007.

§ Consumables accounted for a significantly larger portion of our second quarter sales mix due to the economy-related slowdown in sales of disc publishing hardware.

§ In our last conference call, we said that we expected consumables sales growth to remain robust in 2008, given the expansion of our installed retail base in 2007.

§ That has certainly proven to be the case during the first half of 2008, and we expect consumables sales growth to remain strong over the balance of the year.

§ International sales increased 23% in the second quarter and accounted for 47% of total sales, compared to 34% of total sales in the year-earlier period.

§ In the absence of currency translations, international sales grew modestly year-over-year.

§ Rimage’s European operation accounted for the great majority of the second quarter’s international sales, and as Bernie said previously, this operation is showing signs of strengthening.

§ Rimage’s gross margin was 44% in the second quarter, up slightly from 43% in the first quarter and down modestly from 45% in the second quarter of 2007.

§ Our gross margins throughout this year’s first half have been affected by the shift in our sales mix toward consumable supplies, which carry lower gross margins than those associated with disc publishing hardware.

§ At this time, we believe our gross margin for the third quarter will be at or near the second quarter level.

§ Moving down the P&L, second quarter R&D expense came to $1.5 million, up slightly from $1.4 million in both this year’s first quarter and last year’s second quarter.

§ As these numbers indicate, we have maintained product development expenditures at a high level despite the challenges posed by the weak economic environment.

§ This commitment to R&D signals not only our intention to remain at the forefront of the disc publishing industry, but also our confidence in Rimage’s future.

§ R&D spending in the third quarter of 2008 is forecasted to remain at or near the second quarter level.

§ Selling, general and administrative expense totaled $5.7 million in this year’s second quarter, down from $6.6 million in the first quarter and $6.3 million in the second quarter of 2007.

§ In comparison to this year’s first quarter, the second quarter reduction in SG&A was attributable to lower compensation expense related to the elimination of several officer positions as well as lower marketing expense. The year-over-year reduction in SG&A primarily reflects the elimination of contractor and several officer positions.

§ We believe SG&A expense will be at or modestly below the second quarter level.

§ We recorded an effective income tax rate of 36% in the second quarter, compared to 36% in the first quarter and 34% in the second quarter of 2007.

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

§ Turning now to our balance sheet, cash and investments totaled $93.7 million at the end of this year’s second quarter, compared to $92.4 million at the end of the first quarter and $94.2 million at the beginning of 2008.

§ During the quarter, cash of $4.4 million was used to acquire 249,000 shares under two existing 500,000 share buyback authorizations.

§ Approximately 725,000 shares remain available for repurchase under these authorizations.

§ Stockholders’ equity came to $107.1 million at the end of the second quarter, compared to $108.6 million at the end of this year’s first quarter and $105.1 million at the end of 2007.

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