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10-Q - FORM 10-Q - BALDWIN TECHNOLOGY CO INC | y84555e10vq.htm |
EX-32.2 - EX-32.2 - BALDWIN TECHNOLOGY CO INC | y84555exv32w2.htm |
EX-10.1 - EX-10.1 - BALDWIN TECHNOLOGY CO INC | y84555exv10w1.htm |
EX-31.1 - EX-31.1 - BALDWIN TECHNOLOGY CO INC | y84555exv31w1.htm |
EX-32.1 - EX-32.1 - BALDWIN TECHNOLOGY CO INC | y84555exv32w1.htm |
EX-31.2 - EX-31.2 - BALDWIN TECHNOLOGY CO INC | y84555exv31w2.htm |
Exhibit 99.1
Baldwin Announces Positive Results in Q3 FY2010
Shelton, Conn., May 13, 2010 Baldwin Technology Company, Inc. (NYSE Amex: BLD), a
global leader in process automation technology for the printing industry, today reported financial
results for its fiscal third quarter ended March 31, 2010.
Highlights
Financial
Å | Third quarter EBITDA of $1,271,000 and net income of $133,000 | ||
Å | Orders up 19% and sales up 9.5% compared to the third quarter of prior year | ||
Å | Sequential (current quarter versus prior quarter) increase in orders of 6% |
Sales & Marketing
Å | Received first combination order of cloth and brush cleaning systems in Belgium | ||
Å | Secured additional retrofit orders in China for combination cloth and brush cleaning systems | ||
Å | Won orders from OEMs and end users for Cobra Spray Dampening systems in China and India |
Third Quarter Fiscal 2010 Financial Results
The Company reported net sales of $39.5 million for the third quarter, a 1.9% improvement over net
sales of $38.8 million in the previous quarter, and an increase of $3.4 million or 9.5% over net
sales of $36.1 million for the third quarter of the prior fiscal year. Currency effects increased
sales by $2.3 million, or 6.3% from the same quarter of the prior year.
Net income for the third quarter was $0.1 million or $0.01 per diluted share, compared to a net
loss of $13.4 million or $0.88 per diluted share for the comparable quarter of the prior year.
Cash flow from operations in the quarter was ($0.6) million compared to $2.7 million in the third
quarter of the prior year.
Orders for the quarter were approximately $36.4 million, compared to $30.5 million in the third
quarter of the prior year, an increase of 19%. Backlog as of March 31, 2010 was $30.2 million
compared to $33.4 million at December 31, 2009.
Please refer to the schedule following the reported GAAP results which shows a reconciliation of
these GAAP results to non-GAAP adjusted results, and the notes below explaining managements
reasons for providing certain non-GAAP financial measures.
Introducing New Consumables
During the next few weeks, Baldwin will be introducing an innovative new line of consumables called
CleanPac cleaning cloths, for use in either dry or pre-soaked versions for cleaning hands and
various items in the pressroom, including blankets, cylinders and other parts of printing presses.
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Trade Shows
In a continuation of the Just Ask marketing program, Baldwin will be presenting an extensive
product portfolio that improves productivity and reduces process costs for the sheet-fed,
commercial web, flexo corrugated packaging, newspaper and semi-commercial market sectors at IPEX
2010. This Birmingham U.K. exhibition occurs every four years and will be held this year from May
18 to 25 and draws attendees from around the globe. In March, the Company participated in the
Printing South China Exhibition, and in June, Baldwin will be showing products at the Expoprint
Latin America 2010 exhibition in Brazil.
Significant Announcements
Å | Baldwin Secures Large Order for Newspaper Press Equipment (May 10, 2010) | ||
Å | Baldwin Wins Additional Retrofit Orders (May 11, 2010) | ||
Å | Baldwin Demonstrates Global Leadership in Process Improvement Technology Driving Press Room Savings at IPEX 2010 (March 10, 2010) |
Additional details, copies of these releases and other news are available at
www.baldwintech.com .
Comments
President and CEO Karl S. Puehringer said, Our tight cost controls, as evidenced by continued
operating expense reduction, helped return Baldwin to profitability this quarter. We also made
solid progress in the execution of our strategy by focusing on opportunities on the installed base,
leveraging our technology in emerging countries and further enhancing our business with press room
consumables. We received several orders this quarter in China and India for the new Cobra Spray
Dampening system, which was developed for production and sale to both OEMs and end users in those
local markets. We also secured retrofit orders in China for combination brush and cloth cleaning
systems. We are continuing the expansion of our European consumables sales network as we introduce
new high performance Prepac® cleaning consumables. Our parts and consumables business has grown
and although a recovery in new web press shipments will take longer due to longer lead times, there
are first signs of recovery in the sheet fed printing market.
Going forward, we are focused on new uses for our technology. I am pleased about an increasing
demand for our consumables, primarily driven through our environmentally friendly product offerings
and an overall trend in the industry towards shorter runs that require more cleaning. As
highlighted above, we are introducing a new consumable, the CleanPac cleaning cloths. We are also
pursuing several global projects for supply chain management and standardization and global
procurement to reduce material costs. As a market leader, Baldwin offers a complete spectrum of
products, related consumables and services through a well established global network in all major
markets for print, Puehringer concluded.
Vice President and CFO John P. Jordan said, Cash flow from operations during the quarter was
slightly less than break even, which was attributable to timing of customer deposits (decreased by
$2.5 million). The controllable components of working capital, on the other hand, contributed
$0.9 million to operating cash flow.
Total debt at March 31, 2010 of $18.7 million is $1.3 million less than at December 31, 2009 and
$9.2 million less than at 2009 fiscal year end, resulting primarily from the application of the
patent infringement suit settlement proceeds received during the second quarter. The Company has
met its EBITDA and liquidity covenants under the Credit Agreement Amendment completed July 31,
2009, but the currency-adjusted net sales for the three months ended April 30, 2010 were less than
the amount required under the Agreement. The banks agreed to waive that breach.
Operating expenses for the quarter of $11.0 million were $0.6 million lower than third quarter
fiscal 2009 operating expenses of $11.6 million after adjusting for a nonrecurring charge in 2009.
Excluding the unfavorable currency effect, operating expenses were $1.2 million or 10% lower than
prior year adjusted operating expenses. The current year quarter results reflect the full benefit
of
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restructuring and cost reductions that were started during the second and third quarters of fiscal
year 2009. Year to date operating expenses were $7.1 million (18%) less than prior year, excluding
the unfavorable currency effect and adjusted for a non-recurring charge.
The Company is well positioned to leverage its lower cost structure to deliver higher margins from
any additional business that should emanate from a recovery when the worlds economies and demand
for print equipment recover from the recent economic contraction. We will continue our diligence
in managing costs to maintain profitable operations, Jordan concluded.
Non-GAAP Financial Measures
This release provides GAAP and non-GAAP financial measures. For purposes of Regulation G, a
non-GAAP financial measure is a numerical measure of a companys historical or future financial
performance, financial position or cash flows that excludes amounts, or is subject to adjustments
that have the effect of excluding amounts, that are included in the most directly comparable
measure calculated and presented in accordance with GAAP in the statements of income, balance
sheets, or statements of cash flows of the Company; or includes amounts, or is subject to
adjustments that have the effect of including amounts, that are excluded from the most directly
comparable measure so calculated and presented. Pursuant to the requirements of Regulation G, the
Company has provided reconciliations of each of the non-GAAP financial measures contained herein to
the most directly comparable GAAP financial measures. These non-GAAP measures are provided because
management of the Company uses these financials measures as an indicator of business performance in
maintaining and evaluating the Companys on-going financial results and trends. The Company
believes that both management and investors benefit from referring to these non-GAAP measures in
assessing the performance of the Companys ongoing operations and liquidity and when planning and
forecasting future periods. These non-GAAP measures also facilitate managements internal
comparisons to the Companys historical operating results and liquidity.
Conference Call and Webcast
The Company will host a conference call to discuss the financial results and business outlook today
at 11:00 AM Eastern Standard Time. Call in information is below:
Conference Call Access:
Domestic: 800-619-4043
International: 415-228-5043
Passcode: Baldwin Q3
Domestic: 800-619-4043
International: 415-228-5043
Passcode: Baldwin Q3
Rebroadcast Access:
Domestic: 800-925-0173
International: 402-998-0031
Domestic: 800-925-0173
International: 402-998-0031
An archived webcast of the conference call will also be available on the Companys web site
http://www.baldwintech.com or
http://www.investorcalendar.com/IC/CEPage.asp?ID=158393.
Leading the call will be Baldwin President and CEO Karl S. Puehringer and Vice President and
CFO John P. Jordan.
About Baldwin
Baldwin Technology Company, Inc. is a leading international supplier of process automation
equipment and related consumables for the printing and publishing industries. Baldwin offers its
customers a broad range of market-leading technologies, products and systems that enhance the
quality of printed products and improve the economic and environmental efficiency of the printing
process. Headquartered in Shelton, Connecticut, the Company has operations strategically located in
the major print markets and distributes its products via a global sales and service infrastructure.
Baldwins technology and products include cleaning systems, fluid management and ink control
systems, web press protection
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systems and drying systems and related consumables. For more information, visit
http://www.baldwintech.com
A profile for investors can be accessed at www.hawkassociates.com/profile/bld.cfm. An
online investor kit including press releases, current price quotes, stock charts and other valuable
information for investors is available at http://www.hawkassociates.com.
To receive free e-mail notification of future Baldwin releases, sign up at
www.hawkassociates.com/about/alert/.
Cautionary Statement
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
expected revenue, gross margins, operating income (loss), EBITDA, asset impairments, expectations
concerning the reductions of costs, the level of customer demand and the ability of the Company to
achieve its stated objectives. 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 Companys customers, the ability of the
Company to maintain ongoing compliance with the terms of its amended credit agreement, market
acceptance of and demand for the Companys products and resulting revenue, the ability of the
Company to successfully expand into new territories, the ability of the Company to meet its stated
financial and operational objectives, the Companys dependence on its partners (both manufacturing
and distribution), and other risks and uncertainties detailed in the Companys periodic filings
with the Securities and Exchange Commission. The words looking forward, looking ahead,
believe(s), should, may, expect(s), anticipate(s), project(s), likely,
opportunity, 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.
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Baldwin Technology Company, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Quarter ended March 31, | ||||||||
2010 | 2009 | |||||||
Net sales |
$ | 39,498 | $ | 36,087 | ||||
Cost of goods sold |
27,764 | 25,816 | ||||||
Inventory reserve adjustment |
| 4,250 | ||||||
Gross profit |
11,734 | 6,021 | ||||||
Operating expenses |
11,034 | 12,099 | ||||||
Restructuring |
| 4,066 | ||||||
Impairment of goodwill |
| 5,658 | ||||||
Operating income (loss) |
700 | (15,802 | ) | |||||
Interest expense, net |
426 | 428 | ||||||
Other expense (income), net |
69 | 311 | ||||||
Income (loss) before income taxes |
205 | (16,541 | ) | |||||
Provision (benefit) for income taxes |
72 | (3,094 | ) | |||||
Net income (loss) |
133 | (13,447 | ) | |||||
Net income (loss) per share basic |
$ | 0.01 | $ | (0.88 | ) | |||
Net income (loss) per share diluted |
$ | 0.01 | $ | (0.88 | ) | |||
Weighted average shares outstanding basic |
15,526 | 15,344 | ||||||
Weighted average shares outstanding diluted |
15,562 | 15,344 | ||||||
Nine Months ended March 31, | ||||||||
2010 | 2009 | |||||||
Net sales |
$ | 114,423 | $ | 138,283 | ||||
Cost of goods sold |
80,611 | 96,304 | ||||||
Inventory reserve adjustment |
| 4,250 | ||||||
Gross profit |
33,812 | 37,729 | ||||||
Operating expenses |
34,615 | 39,996 | ||||||
Restructuring |
| 4,747 | ||||||
Impairment of goodwill |
| 5,658 | ||||||
Legal settlement income, net of expenses |
9,266 | | ||||||
Operating income (loss) |
8,463 | (12,672 | ) | |||||
Interest expense, net |
2,626 | 1,660 | ||||||
Other expense (income), net |
271 | (938 | ) | |||||
Income (loss) before income taxes |
5,566 | (13,394 | ) | |||||
Provision (benefit) for income taxes |
1,951 | (1,620 | ) | |||||
Net income (loss) |
3,615 | (11,774 | ) | |||||
Net income (loss) per share basic |
$ | 0.23 | $ | (0.77 | ) | |||
Net income (loss) per share diluted |
$ | 0.23 | $ | (0.77 | ) | |||
Weighted average shares outstanding basic |
15,455 | 15,319 | ||||||
Weighted average shares outstanding diluted |
15,502 | 15,319 | ||||||
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Baldwin Technology Company, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
March 31, | June 30, | |||||||
2010 | 2009 | |||||||
Assets |
||||||||
Cash and equivalents |
$ | 11,762 | $ | 13,806 | ||||
Trade receivables |
27,785 | 29,654 | ||||||
Inventory |
20,012 | 22,765 | ||||||
Prepaid expenses and other |
7,306 | 9,445 | ||||||
Total current assets |
66,865 | 75,670 | ||||||
Property, plant and equipment |
5,046 | 5,592 | ||||||
Intangible assets |
30,806 | 31,918 | ||||||
Other assets |
13,671 | 14,825 | ||||||
Total assets |
116,388 | 128,005 | ||||||
Liabilities |
||||||||
Loans payable |
$ | 4,279 | $ | 4,153 | ||||
Current portion of long-term debt |
468 | 3,534 | ||||||
Other current liabilities |
34,318 | 40,601 | ||||||
Total current liabilities |
39,065 | 48,288 | ||||||
Long-term debt |
13,991 | 20,300 | ||||||
Other long-term liabilities |
11,214 | 11,782 | ||||||
Total liabilities |
64,270 | 80,370 | ||||||
Shareholders equity |
52,118 | 47,635 | ||||||
Total liabilities and shareholders equity |
$ | 116,388 | $ | 128,005 | ||||
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Baldwin Technology Company, Inc.
Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Consolidated Statements of Cash Flows
(Unaudited, in thousands)
For the nine months ended March 31, | ||||||||
2010 | 2009 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net income (loss) |
3,615 | (11,774 | ) | |||||
Adjustments to reconcile net income (loss) to net cash |
||||||||
Provided (used) by operating activities: |
||||||||
Depreciation and amortization |
1,971 | 2,216 | ||||||
Gain on legal settlement |
(9,266 | ) | | |||||
Proceeds from legal settlement |
9,560 | | ||||||
Restructuring charge |
| 4,747 | ||||||
Inventory and accounts receivable charge |
| 4,715 | ||||||
Impairment charge |
| 5,658 | ||||||
Deferred financing charge |
1,183 | | ||||||
Stock based compensation expense |
657 | 909 | ||||||
Other non cash items |
241 | (2,566 | ) | |||||
Changes in assets and liabilities |
||||||||
Accounts and notes receivable |
1,453 | 14,605 | ||||||
Inventories |
2,867 | 2,799 | ||||||
Customer deposits |
(755 | ) | 2,252 | |||||
Accrued compensation |
(553 | ) | (3,730 | ) | ||||
Payment of restructuring charges |
(1,795 | ) | (1,574 | ) | ||||
Accounts and notes payable, trade |
(3,589 | ) | (12,256 | ) | ||||
Other |
3,316 | (3,237 | ) | |||||
Net cash provided by operating activities |
8,905 | 2,764 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Additions of property, plant and equipment |
(366 | ) | (766 | ) | ||||
Additions of patents and trademarks |
(97 | ) | (955 | ) | ||||
Net cash used by investing activities |
(463 | ) | (1,721 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Debt borrowings (repayments), net |
(9,457 | ) | 5,191 | |||||
Payment of debt financing costs |
(752 | ) | | |||||
Other financing |
(481 | ) | (227 | ) | ||||
Net cash (used) provided by financing activities |
(10,690 | ) | 4,964 | |||||
Effect of exchange rate changes |
204 | (592 | ) | |||||
Net increase (decrease) in cash and cash equivalents |
(2,044 | ) | 5,415 | |||||
Cash and cash equivalents at beginning of period |
13,806 | 9,333 | ||||||
Cash and cash equivalents at end of period |
$ | 11,762 | $ | 14,748 | ||||
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Baldwin Technology Company, Inc.
Reconciliation of GAAP Results to Adjusted non-GAAP Results
And other non-GAAP financial measures
(Unaudited, in thousands, except per share data)
Reconciliation of GAAP Results to Adjusted non-GAAP Results
And other non-GAAP financial measures
(Unaudited, in thousands, except per share data)
Quarter ended March 31, 2010
EBITDA Calculation (1) | As Reported | |||
Net income |
$ | 133 | ||
Add back: |
||||
Provision for income taxes |
72 | |||
Interest, net |
426 | |||
Depreciation and amortization |
640 | |||
EBITDA |
$ | 1,271 | ||
Quarter ended March 31, 2009
As Reported | As Adjusted | |||||||||||
(GAAP) | Adjustments | (non-GAAP) (1) | ||||||||||
Gross profit |
$ | 6,021 | $ | (4,250 | ) (a) | $ | 10,271 | |||||
Operating (loss) |
(15,802 | ) | (14,439 | ) (b) | (1,363 | ) | ||||||
(Loss) before income taxes |
(16,541 | ) | (14,439 | ) | (2,102 | ) | ||||||
(Benefit) for income taxes |
(3,094 | ) | (2,482 | ) | (612 | ) | ||||||
Net (loss) |
(13,447 | ) | (11,957 | ) | (1,490 | ) | ||||||
Net (loss) per share: |
||||||||||||
Basic and Diluted |
$ | (0.88 | ) | $ | (0.78 | ) | $ | (0.10 | ) | |||
(a) | Adjustment represents non-routine inventory write-off. | |
(b) | Adjustment includes restructuring costs of $4,066, impairment of goodwill of $5,658, bad debt write-off of $465 and inventory write-off of $4,250 |
EBITDA Calculation (1) | As Reported | Adjustments (2) | As Adjusted | |||||||||
Net (loss) |
$ | (13,447 | ) | $ | (9,040 | ) | $ | (4,407 | ) | |||
Add back: |
||||||||||||
(Benefit) for income taxes |
(3,094 | ) | (1,333 | ) | (1,761 | ) | ||||||
Interest, net |
428 | | 428 | |||||||||
Depreciation and amortization |
769 | | 769 | |||||||||
EBITDA |
(15,344 | ) | (10,373 | ) | (4,971 | ) | ||||||
Nine months ended March 31, 2010
As Reported | As Adjusted | |||||||||||
(GAAP) | Adjustments | (non-GAAP) (1) | ||||||||||
Operating income |
$ | 8,463 | $ | 8,355 | (c) | $ | 108 | |||||
Interest expense, net |
2,626 | 1,183 | (d) | 1,443 | ||||||||
Income (loss) before income taxes |
5,566 | 7,172 | (1,606 | ) | ||||||||
Provision for income taxes |
1,951 | 1,883 | 68 | |||||||||
Net income (loss) |
3,615 | 5,289 | (1,674 | ) | ||||||||
Net income (loss) per share: |
||||||||||||
Basic and Diluted |
$ | 0.23 | $ | 0.34 | $ | (0.11 | ) | |||||
(c) | Adjustment represents non-routine charges for special investigation costs of $911 and income associated with a legal settlement, net of expenses, of $9,266. | |
(d) | Adjustment represents non-routine write-off of debt financing costs. |
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EBITDA Calculation (1) | As Reported | Adjustments | As Adjusted | |||||||||
Net income (loss) |
$ | 3,615 | $ | 5,289 | $ | (1,674 | ) | |||||
Add back: |
||||||||||||
Provision for income taxes |
1,951 | 1,883 | 68 | |||||||||
Interest, net |
2,626 | 1,183 | 1,443 | |||||||||
Depreciation and amortization |
1,971 | 1,971 | ||||||||||
EBITDA |
$ | 10,163 | $ | 8,355 | $ | 1,808 | ||||||
Nine months ended March 31, 2009
As Reported | As Adjusted | |||||||||||
(GAAP) | Adjustments | (non-GAAP) (1) | ||||||||||
Gross profit |
$ | 37,729 | $ | (4,250 | ) (e) | $ | 41,979 | |||||
Operating (loss) income |
(12,672 | ) | (15,120 | ) (f) | 2,448 | |||||||
(Loss) income before income taxes |
(13,394 | ) | (15,120 | ) | 1,726 | |||||||
(Benefit) provision for income taxes |
(1,620 | ) | (2,738 | ) | 1,118 | |||||||
Net (loss) income |
(11,774 | ) | (12,382 | ) | 608 | |||||||
Net (loss) income per share: |
$ | (0.77 | ) | $ | (0.81 | ) | $ | 0.04 | ||||
Basic and Diluted |
(e) | Adjustment represents non-routine inventory write-off. | |
(f) | Adjustment includes restructuring costs of $4,747, impairment of goodwill of $5,658, bad debt write-off of $465 and inventory write-off of $4,250. |
EBITDA Calculation (1) | As Reported | Adjustments (2) | As Adjusted | |||||||||
Net (loss) |
$ | (11,774 | ) | $ | (9,040 | ) | $ | (2,734 | ) | |||
Add back: |
||||||||||||
(Benefit) for income taxes |
(1,620 | ) | (1,333 | ) | (287 | ) | ||||||
Interest, net |
1,660 | | 1,660 | |||||||||
Depreciation and amortization |
2,216 | | 2,216 | |||||||||
EBITDA |
$ | (9,518 | ) | $ | (10,373 | ) | $ | 855 | ||||
Net Debt Calculation (1) | Mar 31, 2010 | Dec 31, 2009 | Jun 30, 2009 | |||||||||
Loans payable |
$ | 4,279 | $ | 4,297 | $ | 4,153 | ||||||
Current portion of long-term debt |
468 | 1,467 | 3,534 | |||||||||
Long-term debt |
13,991 | 14,247 | 20,300 | |||||||||
Total Debt |
18,738 | 20,011 | 27,987 | |||||||||
Cash |
11,762 | 14,321 | 13,806 | |||||||||
Net debt |
$ | 6,976 | $ | 5,690 | $ | 14,181 | ||||||
(1) | Gross Profit, Operating income (loss), Income (loss) before income taxes, Provision (benefit) for income taxes, Net income (loss) and net income (loss) per share, as adjusted, as well as EBITDA (earnings before interest, taxes, depreciation and amortization) and Net Debt 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. Baldwins management believes that EBITDA, Net Debt and the other non-GAAP measures listed above provide meaningful supplemental information regarding Baldwins current financial performance and prospects for the future. Baldwin believes that both management and investors benefit from referring to these non-GAAP measures in assessing the performance of Baldwins ongoing operations and liquidity, and when planning and forecasting future periods. These non-GAAP measures also facilitate managements internal comparisons to Baldwins historical operating results and liquidity. Our presentations of these measures, however, may not be comparable to similarly titled measures used by other companies. Refer also to the section entitled Non-GAAP Financial Measures above. | |
(2) | EBITDA adjustments include adjustments relating to inventory reserves, bad debt reserves, impairment of goodwill and related tax effects. |
Contacts: Helen P. Oster, Tel: 203 402 1004, email: HPOster@baldwintech.com
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