SOURCE: Presstek, Inc.

Presstek, Inc.

August 08, 2012 07:30 ET

Presstek Reports Financial Results for the Second Quarter; Reaffirms Expectations of Positive Adjusted EBITDA for 2012

GREENWICH, CT--(Marketwire - Aug 8, 2012) - Presstek, Inc. (NASDAQ: PRST)

  • Positive adjusted EBITDA of $0.8 Million
  • Quarterly operating expenses down 21% from prior year quarter
  • Two 75DI units installed in Q2
  • Debt net of cash at its lowest level since December, 2010

Presstek, Inc. (NASDAQ: PRST), a leading supplier of digital offset printing solutions to the printing and communications industries, today reported financial and operating results for the second quarter ended June 30, 2012. The Company reported total revenue of $29.7 million compared to $31.4 million in the second quarter of 2011.

The Company generated positive adjusted EBITDA of $0.8 million for the quarter, an increase of $0.4 million from the prior year. The Company had an operating loss of $0.3 million in the second quarter of 2012 versus an operating loss of $1.2 million in the 2011 second quarter, an improvement of $0.9 million. Cost reduction actions undertaken in the latter half of 2011 contributed significantly to this improvement. During the second quarter of 2012, the Company incurred a net loss of $0.8 million, or $0.02 per share, compared to a net loss of $1.7 million, or $0.05 per share, in the second quarter of 2011. (See "Information Regarding Non-GAAP Measures")

"While we continue to experience the effects of the difficult economic climate, especially in Europe, our quarterly results reflect continued improvement in EBITDA and a narrowing of our quarterly operating loss. While these results are in large part due to our cost management efforts, we believe that we are positioned for improving results once the overall economic environment improves," said Stanley Freimuth, Presstek's Chairman, President and CEO.

Second Quarter 2012 Financial Results
Total revenue in the second quarter was $29.7 million, a decrease of $1.7 million from the second quarter of 2011.

  • Equipment revenue increased $0.2 million, to $6.4 million, compared with the same prior year period due primarily to an increase in the number of DI units sold, including the sale of two 75DI units.

  • Consumables revenue totaled $17.6 million compared with $19.3 million for the same prior year period resulting primarily from unfavorable economic conditions in Europe as well as the continued gradual erosion of some of our legacy plate product lines.

  • Service revenue decreased $0.2 million, to $5.7 million, compared to the prior year quarter due to lower contract revenues resulting from a decrease in active legacy equipment accounts.

Gross margin percent for the second quarter of 2012 was 28.7% compared to 31.7% in the second quarter of 2011. Lower margins were primarily the result of unfavorable consumables product mix and an increase in our per unit plate costs resulting from lower overall factory volume production.

Second quarter operating expenses, including the costs of the drupa trade show, declined $2.3 million, or 21%, to $8.8 million compared with the prior year period due primarily to lower expenses resulting from the cost reduction actions taken in the second half of 2011.

"The cost reduction actions that we undertook during the second half of 2011 have resulted in three consecutive quarters of improving operating results and adjusted EBITDA, and we continue to forecast positive adjusted EBITDA for the full year," said Arnon Dror, Presstek's Vice President, Chief Financial Officer and Treasurer. "In addition, debt net of cash, which improved from $8.8 million to $7.9 million on a sequential quarter basis, closed at its lowest level since the fourth quarter of 2010 resulting from a continued emphasis on managing working capital." (See "Information Regarding Non-GAAP Measures")

Information Regarding Non-GAAP Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the Company provides non-GAAP financial measures, including operating expenses excluding special charges; adjusted EBITDA; debt net of cash; and other GAAP measures adjusted for certain charges, which the Company believes are useful to help investors better understand its past financial performance and prospects for the future. A full reconciliation of GAAP to non-GAAP measures is provided in the supplemental financial information provided with this press release.

Conference Call and Webcast Information
Management will discuss Presstek's first quarter 2012 results in a conference call on Wednesday, August 8, 2012 at 10:30 a.m. Eastern Time. Conference call information is below:

CONFERENCE CALL ACCESS
Domestic Dial In: (866) 788-0544
International Dial In: (857) 350-1682
Passcode: 16904958

Investors can access the call in a "listen only" mode via the Internet at http://www.presstek.com

In addition, for those unable to participate at the time of the call, a rebroadcast will be available following the call from 12:30 PM Eastern Time on Wednesday, August 8, 2012 until 11:59 PM Eastern Time on Wednesday, August 15, 2012.

REBROADCAST ACCESS
Domestic Dial In: (888) 286-8010
International Dial In: (617) 801-6888
Passcode: 41211988

An archived webcast of this conference call also will be available on the "Investor Events Calendar" page of the company's web site.

About Presstek:
Presstek, Inc. is a leading supplier of digital offset printing solutions to the printing and communications industries. Presstek's DI® digital offset solutions bridge the gap between toner and conventional offset printing, enabling printers to cost effectively meet increasing customer demand for high quality, short run color printing with a fast turnaround time while providing improved profit margins. The Company's CTP portfolio ranges from two-page to eight-page systems, many of which are fully automated. These systems support Presstek's line of chemistry-free plates as well as Aeon, a no preheat thermal plate which offers run lengths up to one million impressions and PhD 830, a high resolution preheat, thermal CTP plate that offers run lengths of one million and more impressions. Presstek also offers a range of workflow solutions, pressroom supplies, and reliable service. Presstek is well positioned to support print environments of any size on a worldwide basis. Visit www.presstek.com or call +1.603.595.7000 for more information.

DI is a registered trademark of Presstek, Inc.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained in this News Release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding 2012, the prospects for the success of the Company's recently introduced 75DI® press and the Company's marketing plans for the press, the ability of the Company to achieve positive adjusted EBITDA and enhanced profitability in the future, and the intention of the Company to file for a transfer of its stock listing to the NASDAQ Capital Market. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the severity and length of the current economic downturn, the impact of the economic downturn on the availability of credit for the Company's customers, market acceptance of and demand for the Company's products, revenue and adjusted EBITDA levels resulting from the Company's sales activities, the ability of the Company to achieve sales and performance levels sufficient to achieve positive adjusted EBITDA, the Company's dependence on its partners (both manufacturing and distribution), the Company's ability to successfully transfer the listing of its Common Stock to the NASDAQ Capital Market, and other risks and uncertainties detailed in the Company's 2011 Annual Report on Form 10-K and the Company's other reports on file with the Securities and Exchange Commission. The words "looking forward," "looking ahead," "believe(s)," "should," "may," "expect(s)," "anticipate(s)," "project(s)," "likely," "opportunity," expressions of optimism concerning future events or results, and similar expressions, among others, identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to update any forward-looking statements contained in this news release.

   
   
   
PRESSTEK, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF OPERATIONS  
(in thousands)  
(Unaudited)  
   
    Three months ended     Six months ended  
    June 30,     July 2,     June 30,     July 2,  
    2012     2011     2012     2011  
                                 
Revenue                                
  Equipment   $ 6,386     $ 6,230     $ 9,886     $ 11,348  
  Consumables     17,557       19,252       35,120       39,986  
  Service and parts     5,718       5,913       11,681       11,941  
    Total revenue     29,661       31,395       56,687       63,275  
                                 
Cost of revenue                                
  Equipment     6,081       6,269       10,294       11,833  
  Consumables     10,678       10,386       21,632       21,615  
  Service and parts     4,380       4,783       8,940       9,925  
    Total cost of revenue     21,139       21,438       40,866       43,373  
                                 
Gross profit     8,522       9,957       15,821       19,902  
                                 
Operating expenses                                
  Research and development     770       1,110       1,744       2,185  
  Sales, marketing and customer support     4,343       5,609       8,285       10,873  
  General and administrative     3,380       4,135       6,207       8,452  
  Amortization of intangible assets     289       210       535       411  
  Restructuring and other charges     -       48       -       363  
    Total operating expenses     8,782       11,112       16,771       22,284  
                                 
Operating loss     (260 )     (1,155 )     (950 )     (2,382 )
Interest and other income (expense), net     (487 )     (360 )     (984 )     (675 )
                                 
Loss from continuing operations before income taxes     (747 )     (1,515 )     (1,934 )     (3,057 )
Provision (benefit) for income taxes     8       183       45       181  
                                 
Net loss   $ (755 )   $ (1,698 )   $ (1,979 )   $ (3,238 )
                                 
Loss per share (basic and diluted)   $ (0.02 )   $ (0.05 )   $ (0.05 )   $ (0.09 )
   
   
   
PRESSTEK, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
(in thousands, except share data)  
(Unaudited)  
    June 30,     December 31,  
    2012     2011  
                 
ASSETS                
  Current assets                
    Cash and cash equivalents   $ 2,901     $ 2,539  
    Cash - restricted     516       512  
    Accounts receivable, net     14,987       15,904  
    Inventories     21,178       25,038  
    Other current assets     1,580       1,345  
      Total current assets     41,162       45,338  
                 
  Property, plant and equipment, net     17,363       18,543  
  Intangible assets, net     4,496       5,001  
  Other noncurrent assets     769       931  
                 
      Total assets   $ 63,790     $ 69,813  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
  Current liabilities                
    Line of credit   $ 10,813     $ 13,757  
    Accounts payable     7,260       6,864  
    Accrued expenses     4,210       5,472  
    Deferred revenue     3,752       4,473  
      Total current liabilities     26,035       30,566  
                 
  Other long-term liabilities     -       31  
                 
      Total liabilities     26,035       30,597  
                 
  Stockholders' equity                
    Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued     -       -  
    Common stock, $0.01 par value, 75,000,000 shares authorized, 37,395,228 outstanding at June 30, 2012 and December 31, 2011, respectively     374       374  
    Additional paid-in capital     125,400       124,992  
    Accumulated other comprehensive loss     (3,275 )     (3,384 )
    Accumulated deficit     (84,744 )     (82,766 )
      Total stockholders' equity     37,755       39,216  
                 
      Total liabilities and stockholders' equity   $ 63,790     $ 69,813  
   
   
   
PRESSTEK, INC.  
SUPPLEMENTAL FINANCIAL INFORMATION  
$ thousands  
(Unaudited)  
   
                      Incr/(Decr) from  
    Q2 2011     Q1 2012     Q2 2012     Q2 2011     Q1 2012  
Operating Expenses excluding Special Charges                              
    Total Operating Expenses   11,112     7,990     8,782     (2,330 )   792  
    less: Restructuring and Other Charges   48     0     0     (48 )   0  
Operating Expenses excluding Special Charges (a)   11,064     7,990     8,782     (2,282 )   792  
                               
                               
Adjusted EBITDA                              
  Net income/(Loss)   (1,698 )   (1,224 )   (755 )   943     469  
    Add back:                              
      Interest   281     363     296     15     (67 )
      Tax charge (benefit)   183     37     8     (175 )   (29 )
      Amortization   210     246     289     79     43  
      Depreciation   1,005     855     825     (180 )   (30 )
      Non cash portion of equity comp   373     245     164     (209 )   (81 )
      Restructuring and other charges   48     0     0     (48 )   0  
Adjusted EBITDA (a)   402     522     827     424     305  
                               
                               
Debt net of cash                              
  Line of credit   12,897     11,283     10,813     (2,084 )   (470 )
  Cash (excludes restricted cash)   3,720     2,512     2,901     (819 )   389  
Debt net of cash (a)   9,177     8,771     7,912     (1,265 )   (859 )
                               
                               

a. Operating expenses excluding special charges, Adjusted EBITDA [earnings before interest, taxes, depreciation, amortization and restructuring and other non-recurring charges (credits)], and Debt net of cash are not measures of performance under accounting principles generally accepted in the United States of America ("GAAP") and should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP.  Presstek's management believes that Adjusted EBITDA and Operating expenses excluding special charges provide meaningful supplemental information regarding Presstek's current financial performance and prospects for the future.  Presstek's management believes that Debt net of cash provides meaningful information on Presstek's debt relative to its cash position.

Presstek believes that both management and investors benefit from referring to these non-GAAP measures in assessing the performance of Presstek's ongoing operations and liquidity, and when planning and forecasting future periods.  These non-GAAP measures also facilitate management's internal comparisons to Presstek's historical operating results and liquidity.  Our presentations of these measures, however, may not be comparable to similarly titled measures used by other companies.  Reconciliations of these measures to GAAP are included in the tables above.