Checkpoint Systems Announces 2000 Fourth Quarter and Year End Results.Business Editors/High-Tech Writers THOROFARE, N.J.--(BUSINESS WIRE)--Feb. 22, 2001 Checkpoint (programming) checkpoint - Saving the current state of a program and its data, including intermediate results, to disk or other non-volatile storage, so that if interrupted the program could be restarted at the point at which the last checkpoint occurred. Systems, Inc. (NYSE NYSE See: New York Stock Exchange :CKP CKP Checkpoint CKP Crankshaft Position CKP Chandraseniya Kayastha Prabhu (caste of Maharastra, India) CKP Chris Key Players (band) CKP Concept Knowledge Processing ), today reported financial results for the fourth quarter and year ended December 31, 2000. The 2000 results are based on a 14 week fourth quarter and a 53 week year as compared to a 13 week fourth quarter and a 52 week year for 1999. Fourth quarter and full year 2000 results include contributions from Meto AG while prior year results include contributions from Meto AG from the date acquired, December 10, 1999. For the fourth quarter 2000, the Company reported net income of $9.5 million, or $0.28 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, excluding restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , integration, and one-time charges. This compares to $3.2 million, or $0.11 per diluted share, excluding restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and extraordinary items, in the prior year period. Revenue for the 2000 fourth quarter was $188.3 million versus $111.6 million for the fourth quarter of 1999. On a pro-forma basis, including a full quarter from Meto AG and excluding the impact of foreign exchange, revenue increased 4.6% in the fourth quarter of year 2000 compared to the fourth quarter of 1999. Kevin P. Dowd Dowd is a derivation of an ancient surname which was once common in Ireland but is now quite rare. The name Dowd is an Anglicisation of the original Ui Dubhda, through its more common form O'Dowd. , President and Chief Executive Officer, commented, "In the fourth quarter, we completed the integration of Meto AG into our business. The final step was the reorganization of the German subsidiary, which we completed in the last two weeks of the quarter. We generated strong European results driven by the installation of 3,500 RF-EAS sensors and deactivators Deactivators is a computer game for the Commodore 64, ZX Spectrum and Amstrad CPC 464, developed by Tigress Marketing and published by Ariolasoft in late 1986. The music was written by Simon PC Frost in the Pryca/Carrefour hypermarket hy·per·mar·ket n. A very large commercial establishment that is a combination of a department store and a supermarket. hypermarket Noun a huge self-service store [translation of French chain in Spain, the completion of the Mercadona supermarket chainwide roll-out in Spain, as well as the installation of 65 mass-market stores at Woolworth's in the UK. Also, we continued to expand our business geographically by gaining new customers in the Asia-Pacific region and Australia. We were selected by Thailand's leading hypermarket chain, Big C Supercenter, for the chainwide installation of our RF EAS RF EAS Radio Frequency Electronic Article Surveillance systems in all of its 23 stores. In Australia, we received mandates for RF EAS from three new retail customers, Tandy, Adairs, and Australian Unity." In the fourth quarter of 2000, the Company recorded restructuring, integration, and one-time charges totaling $19.7 million related to the consolidation and rationalization rationalization, in psychology: see defense mechanism. of its manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. as well as the completion of the Meto integration and subsequent realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of operations and assets. Included in the charges are employee severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , building exit costs, and write-downs of manufacturing assets, inventory, and customer-based receivables. The reported net loss for the fourth quarter of year 2000, including restructuring, integration, and one-time charges was $3.3 million, or $0.11 per diluted share. Gross profit for the fourth quarter of 2000 was $78.3 million or 41.6% of revenue, excluding pre-tax restructuring, integration, and one-time charges of $12.7 million. Gross profit was $42.9 million or 38.5% of revenue for the fourth quarter of 1999. During the fourth quarter of fiscal year 2000, the company implemented FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation 00-10, Accounting for Shipping and Handling Fees and Costs. Earlier periods are restated for comparability. Selling, general and administrative expenses (SG&A), excluding restructuring, integration, and one-time charges were $56.9 million or 30.2% of revenue for the fourth quarter of 2000, compared to $36.4 million or 32.6% for the comparable period last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , excluding restructuring, integration, and one-time charges, was $21.4 million in the fourth quarter of 2000, as compared to operating income in the fourth quarter of 1999 of $6.5 million, excluding restructuring charges. Cash earnings for the fourth quarter of 2000 were $13.7 million or $0.47 per diluted share. The Company defines cash earnings as net income before restructuring and one-time charges, plus depreciation and amortization of $11.4 million less capital expenditures of $7.2 million. As of December 31, 2000, cash and short-term investments were $28.1 million, working capital was $187.4 million and funded debt Funded Debt Long-term debt that matures after more than one year. Notes: This is usually issued as a bond or a long-term note. See also: Bond, Debt, Maturity, Note Funded debt Debt maturing after more than one year. was $374.2 million. For the year ended December 31, 2000, the Company reported revenue of $690.8 million, compared to reported revenues of $373.1 million in 1999. Operating income for the year 2000, excluding restructuring, integration, and one-time charges of $28.4 million, was $56.2 million, which compares to operating income of $28.0 million, excluding restructuring charges of $11.8 million in 1999. Net earnings for the fiscal year 2000, excluding restructuring, integration, and one-time charges were $20.2 million, or $0.64 per diluted share, compared to $15.0 million, or $0.49 per diluted share, excluding restructuring and extraordinary items, in 1999. The reported net loss for the fiscal year 2000, including restructuring, integration, one-time charges, and cumulative effect of change in accounting principle was $2.8 million or $0.09 per diluted share. Mr. Dowd commented, "We are pleased that the Meto integration is now complete and that we exceeded our target operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. savings, from the integration, of $18 million for 2000. Due to the success of the Meto acquisition, we have significantly expanded our product line and gained critical mass in Europe. Further, the integration of Meto and the realignment of worldwide operations have created operating and administrative efficiencies that have laid the foundation for profitable growth. In 2001, we will continue to realize synergies from the Meto acquisition by combining product offerings and taking advantage of cross-selling opportunities." Mr. Dowd continued, "Going forward, our growth will be fueled by our customers' demand for more complete supply chain solutions that provide greater efficiency, productivity, and cost savings. Our source tagging and labeling service solutions are a key element of supply chain management that enable our manufacturing and retail customers to achieve their goals." Mr. Dowd concluded, "We remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about our business opportunities for the year 2001. We believe that our revenue growth in the current year will be in the range of 3-4%, however our results may be impacted by the slowing economy as well as the volatility of currency exchange rates. On a constant currency basis, for 2001 we expect earnings to be in alignment with current estimates of $0.95-$1.00. Our focus for year 2001 will be to maximize our operating income and cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses ." Checkpoint Systems, Inc. is a $700 million multinational Company that manufactures and markets labeling systems designed to improve efficiency, reduce costs and provide value-added label solutions for customers across many markets and industries. Checkpoint is a leading provider of EAS-RF source tagging, barcode and handheld labeling systems, and retail merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. systems. Applications include automatic identification, retail security, and pricing and promotional labels. Operating in 30 countries, Checkpoint has a global network of subsidiaries and provides professional customer service and technical support around the world. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This presentation may include information that could constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Any such forward-looking statements may involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the Company's Security and Exchange Commission filings.
Checkpoint Systems, Inc.
Consolidated Statements of Income
(In thousands except per share amounts)
(unaudited)
Quarter Ended Twelve Months Ended
(14 weeks) (13 weeks) (53 weeks) (52 weeks)
Dec. 31, Dec. 26, Dec. 31, Dec. 26,
2000 1999 2000 1999
Net revenues $188,271 $111,591 $690,811 $373,062
Cost of revenues 109,951 68,674 405,263 226,289
Restructuring,
integration and
one-time charges 12,700 - - 12,700 - -
Gross profit 65,620 42,917 272,848 146,773
Selling, general and
administrative
expenses 56,897 36,377 229,390 118,803
Restructuring,
integration and
one-time charges 6,989 11,796 15,651 11,796
Income (loss) from
operations 1,734 (5,256) 27,807 16,174
Interest income 865 1,836 4,257 5,495
Interest expense 6,113 3,051 24,093 9,792
Other income (expense) (236) (285) (2,524) (1,670)
Income (loss)
before taxes (3,750) (6,756) 5,447 10,207
Income tax
expense (benefit) (564) (2,258) 3,115 2,915
Minority interest (81) (23) (78) (34)
Earnings (loss) before
cumulative effect (3,267) (4,521) 2,254 7,258
Cumulative effect of
change in accounting
principle - - - - (5,020) - -
Extraordinary loss on early
extinguishment of debt
(net of income tax
benefit of $260) - - (592) - - (592)
Net earnings (loss) $ (3,267) $ (5,113) $ (2,766) $ 6,666
Earnings per share before restructuring,
integration and one-time charges and
the cumulative effect of change
in accounting principle:
Basic $ 0.31 $ 0.11 $ 0.67 $ 0.49
Diluted $ 0.28 $ 0.11 $ 0.64 $ 0.49
Earnings (loss) per share before
cumulative effect of change in
accounting principle:
Basic $ (0.11) $ (0.15) $ 0.07 $ 0.24
Diluted $ (0.11) $ (0.15) $ 0.07 $ 0.24
Earnings (loss) per share before
extraordinary loss:
Basic $ (0.11) $ (0.15) $ (0.09) $ 0.24
Diluted $ (0.11) $ (0.15) $ (0.09) $ 0.24
Earnings (loss) per share:
Basic $ (0.11) $ (0.17) $ (0.09) $ 0.22
Diluted $ (0.11) $ (0.17) $ (0.09) $ 0.22
Checkpoint Systems, Inc.
Summary Balance Sheet
(In thousands)
December 31, December 26,
2000 1999
(unaudited)
(preliminary)
Cash and Investments $ 28,121 $ 87,718
Working Capital $187,418 $183,186
Current Assets $381,499 $419,800
Long-term Debt $336,575 $383,595
Shareholder's Equity $258,433 $255,795
Total Assets $886,288 $944,873
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