Global Graphics reports third quarter and first nine months 2009 results

Comparisons for the third quarter of 2009 with the third quarter of the previous year include:

  • Sales of Euro 1.8 million this quarter (Euro 1.7 million at Q3 2008 exchange rates), compared with Euro 2.9 million in Q3 2008;
  • An operating loss of Euro 0.7 million this quarter, compared with an operating profit of Euro 0.1 million in Q3 2008;
  • An adjusted operating loss of Euro 0.8 million this quarter, compared with a nominal operating profit in Q3 2008;
  • An adjusted pre-tax loss of Euro 0.8 million this quarter (or a loss of Euro 0.07 per share), compared with a nominal adjusted pre-tax profit in Q3 2008 (or a profit of Euro 0.00 per share);
  • A net loss of Euro 0.8 million this quarter (or a net loss of Euro 0.08 per share), compared with a nominal net loss in Q3 2008; and
  • An adjusted net loss of Euro 0.9 million this quarter (or an adjusted net loss of Euro 0.09 per share) compared with a nominal adjusted net loss in Q3 2008 (or a loss of Euro 0.00 per share).

Commenting on performance, Gary Fry, Chief Executive Officer, said: "Our performance in the third quarter of 2009 is clearly disappointing.  There were no one-off licence deals (which can typically range between Euro 0.4 million and Euro 1.0 million in a given quarter), unlike in the previous two quarters and during the third quarter of 2008.  The effects of the recession have also slowed the sales of our OEM partners in what is usually the most sluggish quarter for us. We did, however, sign a new contract in the quarter with a leading Japanese printer manufacturer to integrate our PDF conversion software into a multi-function office printer.  

"The three major office printer manufacturers who have been evaluating our embedded technology this year continued to do so into the third quarter and we remain confident in the capability and performance of our offering.    Our customers in the traditional graphic arts segment continue to work with us to promote sales of the latest upgrade to the Harlequin RIP, version 8.1, to their customers worldwide. Market conditions have been particularly difficult for them in the third quarter of the current year.

"Our operating expenses are on plan as we continue to invest in product development and marketing to support our longer-term strategy in digital production print, office printing and business applications.  We are firmly committed to this investment as we continue to reshape the Company’s business.”
 
Third quarter 2009 performance
Sales for the third quarter 2009 amounted to Euro 1.8 million (Euro 1.7 million at Q3 2008 exchange rates) compared with Euro 2.9 million in the third quarter of 2008, or a sequential decrease of 36.6% at current exchange rates.

Total operating expenses amounted to Euro 2.5 million this quarter compared with Euro 2.7 million in the same period of 2008 and Euro 2.6 million in the second quarter of 2009.

The Company reported an operating loss of Euro 0.7 million for this quarter (or a loss equivalent to 37.6% of Q3 2009 sales), compared with an operating profit of Euro 0.1 million in the third quarter of 2008 (or 3.0% of Q3 2008 sales).

The Company reported an adjusted operating loss (or EBITA, as defined in the accompanying table) of Euro 0.8 million for this quarter (or a loss equivalent to 41.9% of Q3 2009 sales), compared with a nominal adjusted operating profit in the third quarter of 2008, when such adjusted operating profit represented 1.4% of sales made in that quarter.

The Company reported an adjusted pre-tax loss (as defined in the accompanying table) of Euro 0.8 million for this quarter, compared with a nominal adjusted pre-tax profit in the third quarter of 2008. Accordingly adjusted pre-tax EPS was a loss of Euro 0.07 this quarter compared with a profit of Euro 0.00 in the third quarter of 2008.

The Company reported a net loss of Euro 0.8 million for this quarter (or a loss of Euro 0.08 per share), compared with a nominal net loss in the third quarter of 2008 (or a loss of Euro 0.00 per share).

The Company reported an adjusted net loss (as defined in the accompanying table) of Euro 0.9 million for this quarter, compared with a nominal adjusted net loss in the third quarter of 2008. Accordingly, adjusted net EPS was a loss of Euro 0.09 this quarter, compared with a loss of Euro 0.00 per share in the third quarter of 2008.

First nine months performance
Sales for the first nine months of 2009 amounted to Euro 7.1 million (Euro 6.4 million at 2008 exchange rates), compared with Euro 8.4 million for the same period of 2008, or a sequential decrease of 15.4% at current exchange rates.

Total operating expenses amounted to Euro 7.8 million for the first nine months of 2009, compared with Euro 8.1 million for the same period of 2008, the latter figure including non-recurring expenses of Euro 0.5 million.

The Company reported an operating loss of Euro 0.9 million for the first nine months of 2009 (or a loss equivalent to 12.3% of the period’s sales), compared with a nominal operating loss for the same period of 2008 (or a loss equivalent to 0.4% of that period’s sales).

The Company reported an adjusted operating loss (as defined in the accompanying table) of Euro 1.2 million for the first nine months of 2009 (or a loss equivalent to 17.1% of the period’s sales), compared with a nominal adjusted operating profit for the same period of 2008 (or a profit representing 0.1% of that period’s sales).

The Company reported an adjusted pre-tax loss (as defined in the accompanying table) of Euro 1.3 million for the first nine months of 2009 (or a loss of Euro 0.13 per share), compared with an adjusted pre-tax profit of Euro 0.2 million for the same period of 2008 (or a profit of Euro 0.02 per share).

The Company reported a net loss of Euro 1.5 million for the first nine months of 2009 (or a loss of Euro 0.14 per share), compared with a net loss of Euro 0.4 million for the same period of 2008 (or a loss of Euro 0.04 per share).

The Company reported an adjusted net loss (defined in the accompanying table) of Euro 1.7 million for the first nine months of 2009, compared with an adjusted net loss of Euro 0.3 million for the same period of 2008. Accordingly, adjusted net EPS was a loss of Euro 0.17 per share for the first nine months of 2009, compared with a loss of Euro 0.03 per share for the same period of 2008.

2009 outlook
Gary Fry continued: "Clearly this is proving to be a challenging year on revenues as the recession tightens its grip, particularly where sales of our software are tied to capital equipment purchases. We expect to report a loss in the current quarter and expect revenues for this financial year to be at least 10% lower than those reported in 2008.

"Our plan has been to use this year to invest in the business for the future and we firmly believe that as the effects of the recession recede, we will be in a strong position.  To date, our investment has allowed us to reshape the business to develop the gDoc range of knowledge worker products, to position ourselves as a strong contender in the market for office printing solutions with the introduction of support for PCL in our embedded print platform and to support our key OEM partners with future solutions that will enable them to build upon their positions in the production printing markets. It is important that we continue to invest in the right skills, technology and processes to achieve our strategy.  I am firmly convinced that our vision is clear and that our strategy is sound.”
 
Third quarter and first nine months of 2009 conference call details
Global Graphics will hold a conference call today at 10.00 CET about its results for the third quarter and the first nine months of the year ending 31 December 2009.

Callers should dial +44 (0) 207 162 0025 and must quote access number 848378 (Global Graphics quarterly results conference call) to the operator.  The call will be available for replay for 7 working days by dialling +44 (0) 20 7031 4064 (freephone number UK only: 0800 358 1867), access code 848378.

Fourth quarter and full year 2009 results announcement
Global Graphics expects to announce its financial results for the quarter and the full year ending 31 December 2009 on Wednesday 10 February 2010 before market opening.

Editors notes

About Global Graphics
Global Graphics (http://www.globalgraphics.com) is a leading developer of e-document and printing software. It provides high-performance solutions to the graphic arts/commercial print and digital print markets and for knowledge worker and professional software applications.  The Company’s customers include Original Equipment Manufacturers (OEMs), system integrators, software developers and resellers and number the world’s leading brands 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, as well as 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 them, neither to reflect events or circumstances after the date of this release, nor to reflect new information nor the occurrence of unanticipated events.

Contact

CFO Alain Pronost/Global Graphics

+33 6 19 68 44 46

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