EX-99.1 2 rimage084328_ex99-1.htm PRESS RELEASE ISSUED ON OCTOBER 22, 2008 Exhibit 99.1 to Rimage Corporation Form 8-K dated October 22, 2008

EXHIBIT 99.1

 

Rimage Reports Third Quarter Sales and Earnings

 

Minneapolis, MN—October 22, 2008—Rimage Corporation (Nasdaq: RIMG) today reported sales of $25,210,000 for the third quarter of 2008 ended September 30, compared to $33,650,000 in the year-earlier period, which included $8.4 million of retail-related equipment sales, maintenance contracts and replacement printer ribbons. There were no significant equipment sales into the retail market in the current quarter. Third quarter earnings of $4,006,000 or $0.42 per diluted share were down from $6,203,000 or $0.59 per diluted share in the same period of 2007.

 

Bernard P. (Bernie) Aldrich, president and chief executive officer, commented: “Rimage’s third quarter results exceeded our previously issued guidance for this period due to higher than forecasted sales of digital publishing equipment transacted through our global sales channel, which had a positive impact on Rimage’s profitability for this period. Rimage’s ability to remain solidly profitable amid today’s difficult economic environment stems from several factors. Our distribution partners and field sales representatives, both of which are reporting ongoing interest in our systems across a broad range of applications, have stepped up their efforts to pursue all available opportunities. We are continuing to benefit from our position as the industry-leading provider of CD/DVD/Blu-ray publishing solutions for mission-critical, high-end applications. The $2.0 million of annualized expense reductions that we instituted earlier this year have streamlined our cost structure. Equally important, our strong financial condition is enabling us to operate effectively in a global economy where credit has become difficult to attain. With quarter-ending cash and investments of nearly $91 million and a debt-free balance sheet, we have more than ample resources for supporting our various growth initiatives.”

 

He continued: “We expect to continue being affected by the lengthened selling cycles for our equipment that has resulted from the cautious attitude of many customers toward capital expenditures. Even so, we expect to remain solidly profitable in the fourth quarter and are forecasting earnings of $0.15 to $0.21 per diluted share on sales of $20 to $22 million for the three-month period ending December 31, 2008. In addition, we remain optimistic about Rimage’s longer-term prospects. We are establishing the foundation required for penetrating several highly promising business services markets. Supported by our strong cash position, we also 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

Sales of digital publishing systems declined in this year’s third quarter, due to the absence of significant equipment sales into the retail market.

 

Recurring revenues, including sales of printer ribbons and cartridges, parts, blank CD/DVD media and maintenance contracts, increased 3% in the third quarter of 2008 and accounted for 58% of sales, compared to 43% in the third quarter of 2007. The growth in consumables as a percentage of total sales reflects the fact that equipment accounted for a significantly higher proportion of sales in the third quarter of 2007.

 

International sales declined 3% in the third quarter and accounted for 35% of total sales, compared to 27% of total sales in the year-earlier period. Rimage’s European and Asian operations are being affected by weakening economic conditions.

 

Cash and investments totaled $90.6 million at September 30, compared to $93.7 million at the end of the second quarter and $94.2 million at the beginning of 2008. During the third quarter, Rimage used cash of $4.3 million to repurchase approximately 275,000 shares under two 500,000 share buyback authorizations. Approximately 449,000 shares remain available for repurchase under the uncompleted authorization. Cash of $3.9 million also was used to purchase Rimage’s Minneapolis headquarters and manufacturing facility.

 



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.

 









RIMAGE CORPORATION

Selected Consolidated Financial Information

(In thousands except per share data)

(Unaudited)

 

Consolidated Statements of Income Information:

 

 

 

Three months ended
September 30,

 

Nine months ended
September 30,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

25,210

 

$

33,650

 

$

70,645

 

$

80,662

 

Cost of revenues

 

 

13,233

 

 

17,238

 

 

39,077

 

 

43,105

 

Gross profit

 

 

11,977

 

 

16,412

 

 

31,568

 

 

37,557

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

1,227

 

 

1,592

 

 

4,091

 

 

4,622

 

Selling, general and administrative

 

 

5,225

 

 

6,180

 

 

17,535

 

 

18,292

 

Total operating expenses

 

 

6,452

 

 

7,772

 

 

21,626

 

 

22,914

 

Operating income

 

 

5,525

 

 

8,640

 

 

9,942

 

 

14,643

 

Other income, net

 

 

711

 

 

1,021

 

 

2,080

 

 

2,609

 

Income before income taxes

 

 

6,236

 

 

9,661

 

 

12,022

 

 

17,252

 

Income tax expense

 

 

2,230

 

 

3,458

 

 

4,303

 

 

6,006

 

Net income

 

 

4,006

 

 

6,203

 

 

7,719

 

 

11,246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per basic share

 

$

0.42

 

$

0.63

 

$

.80

 

$

1.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per diluted share

 

$

0.42

 

$

0.59

 

$

.79

 

$

1.07

 

Basic weighted averageshares outstanding

 

 

9,465

 

 

9,890

 

 

9,629

 

 

9,992

 

Diluted weighted averageshares outstanding

 

 

9,595

 

 

10,302

 

 

9,820

 

 

10,466

 

 

 

Consolidated Balance Sheet Information:

 

 

 

Balance as of

 

 

 

September 30,
2008

 

December 31,
2007

 

 

 

 

 

 

 

 

 

Cash and marketable securities

 

$

56,621

 

$

59,021

 

Receivables

 

 

15,228

 

 

14,447

 

Inventories

 

 

5,914

 

 

8,075

 

Total current assets

 

 

80,461

 

 

84,771

 

Property and equipment, net

 

 

6,465

 

 

3,206

 

Marketable securities – non-current

 

 

33,992

 

 

35,201

 

Total assets

 

 

123,101

 

 

125,096

 

Current liabilities

 

 

14,113

 

 

17,882

 

Long-term liabilities

 

 

2,380

 

 

2,153

 

Stockholders’ equity

 

 

106,608

 

 

105,061

 

 

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