Global Graphics reports third quarter 2008 results

Comparisons for the third quarter 2008 with the third quarter of the previous year include:

  • Sales of Euro 2.9 million this quarter (Euro 3.2 million at Q3 2007 exchange rates) compared with Euro 3.5 million in Q3 2007;
  • Operating profit of Euro 0.1 million this quarter, compared with an operating profit of Euro 0.9 million in Q3 2007;
  • Adjusted operating profit of Euro 0.1 million this quarter, compared with an adjusted operating profit of Euro 0.3 million in Q3 2007;
  • Adjusted pre-tax profit of a nominal value this quarter (or a profit of Euro 0.00 per share), compared with an adjusted pre-tax profit of Euro 0.3 million in Q3 2007 (or a profit of Euro 0.03 per share);
  • Net loss of a nominal value this quarter (or a loss of Euro 0.00 per share), compared with a net profit of Euro 0.5 million in Q3 2007 (or a profit of Euro 0.05 per share); and
  • Adjusted net loss of a nominal value this quarter (or a loss of Euro 0.00 per share), compared with an adjusted net profit of Euro 0.1 million in Q3 2007 (or a profit of Euro 0.01 per share).

Gary Fry, chief executive officer stated, "Whilst it is encouraging to see an increase in revenue and a return to operating profit from the previous quarter we still need to develop significant growth for the business. We are up from Euro 2.6 million in Q2 2008 to Euro 2.9 million in this quarter. The main difference between Q3 2007 and Q3 2008 arises from the revenue recognition accredited to three deals which were signed in November 2006. Whilst we have not yet been adversely affected by the recent global economic crisis we do remain cautious as to the impact that this could have on the industry as a whole.

“In my first full quarter as CEO for Global Graphics I am delighted to report that we have been successful in signing four new contracts across all lines of our business and, looking forward, the pipeline is encouraging.  I am pleased by what I have discovered during my first quarter and I am confident about the long-term outlook for Global Graphics.”

Third quarter performance
Sales for the quarter amounted to Euro 2.9 million, compared with Euro 3.5 million in the third quarter 2007, or a decrease of 19.2% at current exchange rates.  The sequential decrease in sales with the third quarter of 2007 results firstly from the difference between the amount of revenue recognized in both quarters with regards to the three contracts announced in November 2006 amounting to Euro 0.4 million, and secondly from the impact of adverse exchange rate fluctuations, for a total of Euro 0.3 million, the average Euro/US dollar rate falling to 1.505 in Q3 2008 compared with 1.377 in Q3 2007.

Total operating expenses amounted to Euro 2.7 million this quarter, as in Q2 2008, and compared with Euro 2.5 million in Q3 2007.

The Company reported an operating profit of Euro 0.1 million this quarter (or 3.0% of the quarter’s sales), compared with Euro 0.9 million in Q3 2007 (or 25.3% of Q3 2007 sales).

The Company reported a nominal adjusted operating profit (as defined in the accompanying table) for this quarter (or 1.4% of the quarter’s sales), compared with an adjusted operating profit of Euro 0.3 million in Q3 2007 (or 8.9% of Q3 2007 sales).

The Company reported a nominal adjusted pre-tax profit (as defined in the accompanying table) for this quarter, compared with an adjusted pre-tax profit of Euro 0.3 million in Q3 2007. Accordingly adjusted pre-tax EPS was a profit of Euro 0.00 this quarter, compared with a profit of Euro 0.03 in Q3 2007.

The Company reported a nominal net loss this quarter (or a loss of Euro 0.00 per share), compared with a net profit of Euro 0.5 million in Q3 2007 (or a profit of Euro 0.05 per share in Q3 2007).

The Company reported a nominal adjusted net loss (as defined in the accompanying table) this quarter, compared with an adjusted net profit of Euro 0.1 million in Q3 2007. Accordingly, adjusted net EPS was a loss of Euro 0.00 this quarter, compared with a profit of Euro 0.01 in Q3 2007.

First nine months performance
Sales for the first nine months of 2008 were Euro 8.4 million, compared with Euro 12.9 million in the same period of 2007, or a decrease of 34.6% at current exchange rates.  The sequential decrease in sales with the first nine months of 2007 results firstly from the difference between the amount of revenue recognized with regards to the three contracts announced in November 2006 amounting to a total of Euro 2.7 million and secondly from adverse exchange rate fluctuations, for a total of Euro 1.0 million, the average Euro/US dollar rate falling to an average of 1.521 in the first nine months of 2008 compared with an average of 1.343 for the same period of 2007.

Total operating expenses amounted to Euro 8.1 million for the first nine months of 2008, compared with Euro 8.4 million for the same period of 2007.  Included in operating expenses for the first nine months of 2008 were non-recurring expenses amounting to a total of Euro 0.5 million which related to costs incurred with regards to the change in the Chief Executive Officer position which occurred in late June 2008, and also with respect of the redundancy programme which was implemented in January 2008.

The Company reported a nominal operating loss for the first nine months of 2008 (or 0.4% of the period’s sales), compared with an operating profit of Euro 4.1 million for the same period of 2007 (or 32.1% of that period’s sales).

The Company reported a nominal adjusted operating profit (as defined in the accompanying table) for the first nine months of 2008 (or 0.1% of the period’s sales), compared with an adjusted operating profit of Euro 2.4 million for the same period of 2007 (or 18.6% of that period’s sales).

Adjusted pre-tax profit (as defined in the accompanying table) was Euro 0.2 million for the first nine months of 2008, compared with Euro 2.4 million for the same period of 2007. Accordingly adjusted pre-tax EPS was Euro 0.02 in the first nine months of 2008, compared with Euro 0.23 for the same period of 2007.

The Company reported a net loss of Euro 0.4 million for the first nine months of 2008 (or a loss of Euro 0.04 per share), compared with a net profit of Euro 3.3 million for the same period of 2007 (or a profit of Euro 0.32 per share).

The Company reported an adjusted net loss (defined in the accompanying table) of Euro 0.2 million for the first nine months of 2008, compared with an adjusted net profit of Euro 2.2 million for the same period of 2007. Accordingly, adjusted net EPS was a loss of Euro 0.02 per share for the first nine months of 2008, compared with a profit of Euro 0.21 per share for the same period of 2007.

Financial position at 30 September 2008
The Company reported a net cash position of Euro 4.7 million at 30 September 2008, compared with Euro 4.1 million at 31 December 2007, or a net increase of Euro 0.6 million over the first nine months of 2008.

Full year 2008 outlook
Gary Fry added: “During Q4 we will be further refining our long term strategy for growth.   We are also engaged in various new business opportunities across the range of the Global Graphics’    portfolio that will deliver results in the longer term. I confirm the view that our full year position is line with the outlook that we have given in previous statements.  

“We are in the final stages of our first release of the new eDoc-series of products which will give Global Graphics a range of solutions that have relevance and value inside and outside of the print market; this will be supported by a far more active sales and marketing plan. We are seeing a solid and steady uptake of upgrades for Harlequin 8.  During Q4 we will be releasing full native support for another print language (PCL); this addition to Harlequin will make us even more competitive in the office printer market.”

Share repurchase programme
The Company repurchased 10,000 of its shares in September 2008.  It is the Company’s intention to continue to repurchase additional shares in amounts and at times deemed appropriate.

Third quarter 2008 conference call details
Global Graphics will hold a conference call today at 09.30 CET.  Callers should dial +44 (0)20 7162 0125 and mention "Global Graphics quarterly results conference call" to the operator.  The call will be available for replay for 7 working days by dialing number +44 (0)20 7031 4064 (freephone number UK only: 0800 358 1860), access code 813365.

Fourth quarter and full year 2008 results announcement
Global Graphics expects to announce its financial results for the quarter and the year ending 31 December 2008 on 11 February 2009 before market opening.

Editors notes

About Global Graphics

Global Graphics (http://www.globalgraphics.com) is a leading developer of technology for open document and print solutions. It provides sophisticated high performance software components to the graphic arts/commercial print and digital print markets and for PDF (Portable Document Format) software applications.  The Company supplies its RIPs, PDF document, workflow and color solutions mostly to a customer base of Original Equipment Manufacturers (OEMs), system integrators, software developers and resellers. These partners include the world’s leading vendors of digital pre-press systems, large-format color printers, color proofing systems, digital copiers and printers for the corporate and SOHO (Small Office / Home Office) markets, and a wide variety of market leading software applications.

Forward-looking statements
This press release contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. These include statements regarding the Company’s growth, funding, expansion plans and expected results for future periods. Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Although management believes that their expectations reflected in the forward-looking statements are reasonable based on information currently available to them, they cannot assure any reader that the expectations will prove to have been correct. Accordingly, any reader should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of the date of this release. The Company undertakes no obligation to revise or update any of these statements to reflect events or circumstances after the date of this release, nor to reflect new information nor the occurrence of unanticipated events

Contact

Alain Pronost, CFO
Tel: + 33 6 62 60 56 51

Jill Taylor, Director of Corporate Communications
Tel: + 44 1954 283 074

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