Global Graphics reports third quarter and first nine months 2011 results

Pompey (France), 3 November 2011 – GLOBAL GRAPHICS SA (NYSE-Euronext: GLOG), experts in developing electronic document and printing software, announces consolidated financial results for the third quarter and the first nine months of the year ending 31 December 2011.

Comparisons for the third quarter of 2011 with the third quarter of the previous year include:

  • Sales of Euro 2.0 million this quarter (Euro 2.2 million at Q3 2010 exchange rates), compared with Euro 2.6 million in Q3 2010;
  • An operating loss of Euro 0.1 million this quarter compared with a nominal operating profit in Q3 2010;
  • An adjusted operating loss of Euro 0.2 million this quarter compared with an adjusted operating profit of Euro 0.1 million in Q3 2010;
  • An adjusted pre-tax loss of Euro 0.2 million this quarter (or an adjusted pre-tax loss of Euro 0.02 per share) compared with an adjusted pre-tax profit of Euro 0.1 million in Q3 2010 (or an adjusted pre-tax profit of Euro 0.01 per share);
  • A net loss of Euro 0.1 million this quarter (or a net loss of Euro 0.01 per share) compared with a nominal net loss in Q3 2010 (or a net loss of Euro 0.00 per share); and
  • An adjusted net loss of Euro 0.2 million this quarter (or an adjusted net loss of Euro 0.02 per share) compared with a nominal adjusted net profit in Q3 2010 (or an adjusted net loss of Euro 0.00 per share).

Commenting on performance, Gary Fry, Chief Executive Officer, said: “our results for the third quarter, which is typically the slowest quarter of the year, were in line with our expectations. Whilst we signed new deals, as is typical of our OEM licensing model, we expect revenue will follow in coming quarters.

“The third quarter saw an intensive period of product development come to fruition. In the printing segment of the Company’s business, we released the beta version of our Harlequin Multi-RIP, our new high-performance RIP, which is optimized to drive digital presses at full speed.  Indications from the market show that this is the number one product in this segment in terms of speed and quality and, as a result, during the third quarter, we signed a significant new OEM partner that will deploy this technology.   We are also pleased that we have seen an increased level of interest in our technology for digital print applications. During the third quarter we also released version 9.0 of the Harlequin Server RIP with an exciting new feature set that will raise the productivity of print shops to a new level. Our Harlequin Server RIP OEMs are enthusiastic about the prospect of driving upgrade business with this release.

“In the electronic document segment of the Company’s business, we released the beta version of our new Sunstone platform which has been greeted with significant interest and is in evaluation with a number of Independent Software Vendors for use in productivity applications aimed at the enterprise. gDoc Fusion and gDoc Binder are examples of applications that our white label partners can build using the Sunstone platform.  We are also delighted to say that our PDF creation library is gaining traction: it has been verified as being faster, producing higher-quality conversions and with a smaller footprint than Adobe® Acrobat® when converting documents into PDF from Microsoft Office.”  

Third quarter 2011 performance
Sales for the quarter ended 30 September 2011 amounted to Euro 2.0 million compared with Euro 2.6 million in the third quarter 2010, or a sequential decrease of 20.8% at current exchange rates and of 15.2% at constant exchange rates.

Total operating expenses amounted to Euro 2.0 million this quarter, compared with Euro 2.4 million in the same period of 2010, and with Euro 2.3 million and Euro 2.0 million in Q1 2011 and Q2 2011, respectively.  

The Company reported an operating loss of Euro 0.1 million for this quarter (or a loss equivalent to 4.5% of Q3 2011 sales), compared with a nominal operating profit in Q3 2010 (or a profit equivalent to 1.7% of Q3 2010 sales).

The Company reported an adjusted operating loss (as defined in the accompanying table) of Euro 0.2 million for this quarter (or an adjusted operating loss equivalent to 7.9% of Q3 2011 sales), compared with an adjusted operating profit of Euro 0.1 million in Q3 2010, which was equivalent to 4.5% of Q3 2010 sales.

The Company reported an adjusted pre-tax loss (as defined in the accompanying table) of Euro 0.2 million for this quarter, compared with an adjusted pre-tax profit of Euro 0.1 million in Q3 2010. Accordingly adjusted pre-tax EPS was a loss of Euro 0.02 this quarter compared with an adjusted pre-tax profit of Euro 0.01 per share in Q3 2010.

The Company reported a net loss of Euro 0.1 million for this quarter (or a net loss of Euro 0.01 per share), compared with a nominal net loss in Q3 2010 (or a net loss of Euro 0.00 per share).

The Company reported an adjusted net loss (as defined in the accompanying table) of Euro 0.2 million for this quarter, compared with a nominal adjusted net profit in Q3 2010. Accordingly, adjusted net EPS was a loss of Euro 0.02 this quarter, compared with an adjusted net profit of Euro 0.00 per share in Q3 2010.

First nine months performance
Sales for the first nine months of 2011 amounted to Euro 6.2 million, compared with Euro 6.8 million for the same period of 2010, or a sequential decrease of 8.1% at current exchange rates, and of 3.7% at constant exchange rates.

Total operating expenses amounted to Euro 6.3 million for the first nine months of 2011 (after effect of other operating income for Euro 0.2 million), compared with Euro 8.7 million for the same period of 2010, the latter figure including other operating expenses (net of other operating income) for Euro 0.4 million, which were notably relating to expenses incurred pursuant to the Company’s reorganization which was implemented in April 2010.
The Company reported an operating loss of Euro 0.4 million for the first nine months of 2011 (or a loss equivalent to 6.0% of the period’s sales), compared with an operating loss of Euro 2.3 million for the same period of 2010 (or a loss equivalent to 33.2% of that period’s sales).

The Company reported an adjusted operating loss (as defined in the accompanying table) of Euro 0.7 million for the first nine months of 2011 (or a loss equivalent to 11.1% of the period’s sales), compared with an adjusted operating loss of Euro 1.7 million for the same period of 2010 (or a loss equivalent to 24.9% of that period’s sales).

The Company reported an adjusted pre-tax loss (as defined in the accompanying table) of Euro 0.7 million for the first nine months of 2011 (or an adjusted pre-tax loss of Euro 0.07 per share), compared with an adjusted pre-tax loss of Euro 1.9 million for the same period of 2010 (or an adjusted pre-tax loss of Euro 0.19 per share).

The Company reported a net loss of Euro 0.3 million for the first nine months of 2011 (or a net loss of Euro 0.03 per share), compared with a net loss of Euro 2.7 million for the same period of 2010 (or a net loss of Euro 0.26 per share).

The Company reported an adjusted net loss (defined in the accompanying table) of Euro 0.5 million for the first nine months of 2011, compared with an adjusted net loss of Euro 2.1 million for the same period of 2010. Accordingly, adjusted net EPS was a loss of Euro 0.05 per share for the first nine months of 2011, compared with an adjusted net loss of Euro 0.21 per share for the same period of 2010.

Commentary on the remainder of 2011
Gary Fry continued: “the customer commitments we have obtained so far this year for both our print and applications technologies are encouraging. Through our technical innovation we have developed new applications that are enabling us to forge new customer partnerships.
Our expense position has remained under control since the start of the year, and we continue to benefit, in terms of our ability to execute on our strategy, from the decision to invest in new skills we made in the first half of the year.”
 
Grant of share options to certain directors of the Company

On 2 November 2011, the Board voted the grant of share options to certain directors of the Company.
Please refer to note 17 to the Company’s condensed consolidated interim financial statements for the quarter and the nine-month period ended 30 September 2011 for further information on the terms and conditions of this grant of share options.

Fourth quarter and full year 2011 results announcement

Global Graphics expects to announce its consolidated financial results for the quarter and the year ending 31 December 2011 on Wednesday 8 February 2012 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 neither revise nor 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 (0)6 62 60 56 51

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