Creo Reports 2005 Second-Quarter Financial Results.VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- Creo Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CRE CRE Commercial Real Estate CRE Corporate Real Estate CRE Commission for Racial Equality (Scotland) CRE CCD (Charge Coupled Device) and Readout Electronics CRE Camp Response Element )(NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CREO) today announced its financial results for the 2005 fiscal second quarter ended March 31, 2005, reported in U.S. dollars. Revenue in the second quarter of 2005 was $164.0 million, an increase of 3.8 percent from $158.1 million in the second quarter of 2004 as a result of the growth in consumables revenue and the strength of the euro and yen compared to the U.S. dollar. The company reported a net loss of $4.1 million or 7 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. for the second quarter of 2005 due to a higher than usual financial loss of 4 cents per share from the impact of foreign currency on net monetary assets Net monetary assets See: Monetary assets less monetary liabilities. and lower gross profit. The net loss in the second quarter of 2005 also includes 2 cents per share of 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). and intangible asset Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. amortization. This compares to net earnings of $2.0 million or 4 cents 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 for the second quarter of 2004 which includes 2 cents per diluted share of restructuring and intangible asset amortization offset by a foreign currency gain on net monetary assets of 2 cents per diluted share. Gross margin in the second quarter of 2005 was 37.8 percent, compared to 42.0 percent in the second quarter of 2004. Shifts in product mix with the increase in thermal thermal /ther·mal/ (ther´m'l) pertaining to or characterized by heat. ther·mal adj. 1. Of, relating to, using, producing, or caused by heat. 2. plate revenue, lower equipment margins, and the strengthened Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents compared to the U.S. dollar contributed to the decline in gross margin this quarter. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of $67.0 million for the second quarter of 2005 increased compared to $63.9 million in the second quarter of 2004. The increase in operating expenses was largely due to the impact of foreign currency on net monetary assets as well as the appreciation of the Canadian dollar, euro and Israeli shekel compared to the U.S. dollar. Cash used by operations was $8.3 million reflecting increased inventory investment in the thermal plate business, seasonal increases in vendor payments and the payment of annual benefits to North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. employees. Cash inflows from the proceeds of stock option exercises by employees of $9.4 million were more than offset by the early repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of the royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. arrangement liability to the Chief Scientist of Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. of $11.0 million. Cash on hand at quarter end was $68.8 million compared to $82.6 million as at September September: see month. 30, 2004. Weighted shares outstanding (diluted) were 57,458,721 for the second quarter of 2005. In light of the pending transaction with Eastman Kodak (company) Kodak - The photographic company responsible for Photo CD. http://kodak.com/. Company announced on January January: see month. 31 and the uncertainty of its impact on operations, Creo will not be providing guidance for the third quarter of 2005. The proposed arrangement transaction with Kodak has been approved by the Creo board and has received requisite shareholder and court approval, and is subject to customary closing conditions including regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals. On March 29, Creo and Kodak received a "no-action" letter from the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Competition Bureau, indicating that the transaction will not be impeded im·pede tr.v. im·ped·ed, im·ped·ing, im·pedes To retard or obstruct the progress of. See Synonyms at hinder1. [Latin imped under the Canadian Competition Act. On April 6, Kodak received approval for the transaction under the Investment Canada Act Canada Act, also called the Constitutional Act of 1982, which made Canada a fully sovereign state. The British Parliament approved it on Mar. 25, 1982, and Queen Elizabeth II proclaimed it on Apr. 17, 1982. . On April 21, Creo was granted regulatory approval in connection with the transaction in Israel and on May 3 approval was received in the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community . Creo and Kodak continue to work toward obtaining regulatory approvals in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. and completing the transaction in the summer of 2005. First Call Estimates Creo reports its financial results in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Therefore the company's earnings per share results reported in this news release cannot be directly compared with First Call estimates. First Call estimates are based on adjusted analyst forecasts, which exclude restructuring costs and intangible asset amortization. This news release contains 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. within the meaning of the "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. " provisions of the U.S. 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. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include the following: (1) the announcement of the transaction to enter into an arrangement agreement with Eastman Kodak Company on January 31, 2005 may disrupt some of our customer or supplier relationships which may adversely affect future results; (2) new markets and product introductions do not proceed as planned and may adversely affect future revenues; (3) technological changes or changes in the competitive environment may adversely affect the products, market share, revenues or margins of the business; and (4) changes in general economic, financial or business conditions may adversely affect the business or the markets in which it operates. These risks and uncertainties as well as other important risks and uncertainties are described under the caption "Certain Factors That May Affect Future Results" and elsewhere in our Annual Report for the fiscal year ended September 30, 2004, as filed with the U.S. Securities and Exchange Commission and other documents filed with the U.S. Securities and Exchange Commission, and which are incorporated herein by reference. We do not assume any obligation to update the forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information contained in this news release. (C) 2005 Creo Inc. The Creo product names mentioned in this document are trademarks or service marks of Creo Inc. and may be registered in certain jurisdictions. Other company and brand, product and service names are for identification purposes only and may be trademarks or registered trademarks of their respective holders. Data is subject to change without notice. About Creo Creo Inc. is a global company with key strengths in imaging, software technology and digital plates. The leading provider of prepress In typography and printing, the preparation of camera-ready materials up to the actual printing stage, which includes typesetting, page makeup and plate processing. By the turn of the century, the creation of digital content by authors and designers, digital printers, computer-to-plate systems, Creo helps over 25,000 customers worldwide adopt digital production methods which reduce costs, increase print quality and allow them to serve their customers more efficiently. Based on a solid foundation of intellectual property, Creo has an unmatched range of technology solutions that address the needs of commercial, publication, on demand, packaging, and newspaper printers, and creative professionals. Creo product lines include software and hardware for computer-to-plate See CTP. imaging, systems for digital photography, scanning scanning /scan·ning/ (skan´ing) 1. the act of examining by passing over an area or organ with a sensing device. 2. scanning speech. , and proofing, as well as printing plates and proofing media. Creo also supplies on-press imaging technology, components for digital presses, color servers and high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. digital printers. Based in Vancouver, Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Creo reported fiscal 2004 revenue of US$636 million. Creo trades on NASDAQ (CREO) and the TSX (CRE). www.creo.com
Creo Inc.
Segmented Revenue by Economic Segment
Three months ended Six months ended
(in thousands of March 31 March 31 March 31 March 31
U.S. dollars) 2005 2004 2005 2004
--------------------------------------------------------------------
Americas $ 58,051 $ 59,463 $ 116,744 $ 110,988
EMEA 66,916 61,008 136,295 121,148
Asia-Pacific 20,405 22,522 44,853 43,231
OEM and Other 18,626 15,064 40,670 37,978
-----------------------------------------------
$ 163,998 $ 158,057 $ 338,562 $ 313,345
-----------------------------------------------
-----------------------------------------------
Creo Inc.
Segmented Revenue by Economic Segment as a Percentage of Revenue
Three months ended Six months ended
(in thousands of March 31 March 31 March 31 March 31
U.S. dollars) 2005 2004 2005 2004
--------------------------------------------------------------------
Americas 35.4% 37.6% 34.5% 35.4%
EMEA 40.8% 38.6% 40.3% 38.7%
Asia-Pacific 12.4% 14.2% 13.2% 13.8%
OEM and Other 11.4% 9.5% 12.0% 12.1%
-----------------------------------------------
Creo Inc.
Consolidated Balance Sheets
March 31 September 30
2005 2004
(in thousands of U.S. dollars) (unaudited) (audited)
--------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $ 68,798 $ 82,565
Accounts receivable 139,528 138,358
Other receivables 31,876 25,819
Inventories 119,908 111,745
Income taxes receivable 4,498 4,147
Future income taxes 14,172 16,171
----------------------------
378,780 378,805
Capital assets, net 125,950 121,080
Intangible assets, net 8,379 9,995
Goodwill 14,190 14,190
Other assets 36,595 33,655
Future income taxes 28,950 22,260
----------------------------
$ 592,844 $ 579,985
----------------------------
----------------------------
Liabilities
Current liabilities
Accounts payable 42,575 49,546
Accrued and other liabilities 73,273 82,524
Future income taxes 2,329 320
Deferred revenue and credits 63,015 58,673
----------------------------
181,192 191,063
Long-term liabilities 10,407 13,099
Future income taxes - 6,202
----------------------------
191,599 210,364
Shareholders' Equity
Share capital 772,356 747,847
Contributed surplus 3,383 2,225
Cumulative translation adjustment 25,790 21,617
Deficit (400,284) (402,068)
----------------------------
Shareholders' equity 401,245 369,621
----------------------------
$ 592,844 $ 579,985
----------------------------
----------------------------
Creo Inc.
Consolidated Statements of Operations and Deficit
Three months ended Six months ended
(in thousands of U.S. March 31 March 31 March 31 March 31
dollars, except 2005 2004 2005 2004
share per amounts) (unaudited) (unaudited) (unaudited) (unaudited)
--------------------------------------------------------------------
Revenue
Product $ 91,330 $ 95,185 $ 191,640 $ 193,063
Service 45,828 45,332 92,232 89,421
Consumables 26,840 17,540 54,690 30,861
----------------------------------------------
163,998 158,057 338,562 313,345
Cost of sales 101,996 91,719 205,613 180,188
----------------------------------------------
Gross profit 62,002 66,338 132,949 133,157
----------------------------------------------
Research and
development, net 20,498 22,174 39,891 42,319
Sales and marketing 25,083 26,563 51,487 53,238
General and
administration 17,583 14,867 35,994 30,506
Other expense (income) 2,582 (1,529) (103) (2,344)
Restructuring 425 981 1,718 981
Intangible asset
amortization 807 800 1,616 1,509
----------------------------------------------
66,978 63,856 130,603 126,209
Earnings (loss) before
undernoted items (4,976) 2,482 2,346 6,948
Gain on sale of
investment - - - 8,723
Income tax expense
(recovery) 863 (500) (562) (1,375)
----------------------------------------------
Net earnings (loss) $ (4,113) $ 1,982 $ 1,784 $ 14,296
----------------------------------------------
----------------------------------------------
Earnings (loss) per
common share
Basic $ (0.07) $ 0.04 $ 0.03 $ 0.28
----------------------------------------------
----------------------------------------------
Diluted $ (0.07) $ 0.04 $ 0.03 $ 0.28
----------------------------------------------
----------------------------------------------
Deficit, beginning
of period $(396,171) $ (401,136) $ (402,068) $ (413,450)
Net earnings (loss) (4,113) 1,982 1,784 14,296
----------------------------------------------
Deficit, end of
period $(400,284) $ (399,154) $ (400,284) $ (399,154)
----------------------------------------------
----------------------------------------------
Creo Inc.
Consolidated Statements of Cash Flows
Three months ended Six months ended
March 31 March 31 March 31 March 31
(in thousands of 2005 2004 2005 2004
U.S. dollars) (unaudited) (unaudited) (unaudited) (unaudited)
--------------------------------------------------------------------
Cash provided by
operations:
Net earnings (loss) $ (4,113) $ 1,982 $ 1,784 $ 14,296
Items not affecting
cash:
Amortization 6,511 6,160 12,972 11,481
Stock compensation
expense 44 171 155 171
Gain on sale of
investment - - - (8,723)
Future income taxes (1,942) (1,877) (1,281) (3,665)
Other 2,909 440 (497) 918
----------------------------------------------
3,409 6,876 13,133 14,478
----------------------------------------------
Changes in operating
assets and liabilities:
Accounts receivable 8,713 4,605 944 4,478
Other receivables (689) (2,268) (3,975) (5,229)
Inventories (4,309) (4,121) (9,166) (6,019)
Accounts payable (5,771) (3,890) (7,445) 2,574
Accrued and other
liabilities (613) (2,622) (4,214) (4,519)
Income taxes (2,880) (4,216) (6,108) (6,307)
Deferred revenue
and credits (6,165) (3,553) 3,077 (553)
----------------------------------------------
(11,714) (16,065) (26,887) (15,575)
----------------------------------------------
(8,305) (9,189) (13,754) (1,097)
Cash provided by
(used in) investing:
Purchase of
intangible assets - - - (1,890)
Repayment of
promissory note - - - (4,000)
Acquisition, net
of cash acquired - (19,660) - (31,903)
Purchase of capital
assets (7,196) (3,392) (14,071) (7,115)
Proceeds from sale
of capital assets 4 13 4 89
Proceeds from the
sale of investments - - - 22,074
Other (10) 123 (39) 57
----------------------------------------------
(7,202) (22,916) (14,106) (22,688)
----------------------------------------------
Cash provided by
(used in) financing:
Proceeds from shares
issued 9,437 48,932 24,509 50,493
Decrease in long-term
liabilities (11,033) (2,455) (11,033) (2,408)
----------------------------------------------
(1,596) 46,477 13,476 48,085
----------------------------------------------
Foreign exchange gain
(loss) on cash and
cash equivalents
held in foreign
currency (560) (365) 617 579
----------------------------------------------
Increase (decrease)
in cash and cash
equivalents (17,663) 14,007 (13,767) 24,879
Cash and cash
equivalents,
beginning of
period 86,461 69,893 82,565 59,021
----------------------------------------------
Cash and cash
equivalents,
end of period $ 68,798 $ 83,900 $ 68,798 $ 83,900
----------------------------------------------
----------------------------------------------
Creo Inc. (TSX:CRE) (NASDAQ:CREO) |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion