COPPELL, TX -- 07/15/2005 -- Impreso, Inc. (NASDAQ: ZCOM), which through its subsidiaries is involved in (1) the manufacture and distribution of paper and film hard copy imaging products for commercial and home office applications; (2) the development of eCommerce initiatives; and (3) natural spring water bottling and distribution, today reported its third quarter operating results.
The Company reported a net loss of $574,000 or $(0.11) per share in the three months ended May 31, 2005, compared with net income of $348,000 or $0.07 per share, in the prior-year period. Net sales in the most recent quarter decreased $5.6 million, or 22.2%, to $19.8 million, compared with net sales of $25.5 million in the third quarter of FY 2004.
For the nine months ended May 31, 2005, the Company reported a net loss of $2.5 million or $(0.48) per share, compared with net income of $1.1 million or $0.21 per share, in the corresponding period of the prior year. For the nine months ended May 31, 2005, the Company's net sales decreased 25% to $58.4 million, compared with net sales of $77.9 million in the first nine months of FY2004.
"The decrease in net income and net sales for the three and nine months ended May 31, 2005, as compared to the corresponding periods of the prior year was attributable to the reduction of continuous business forms purchases by a key customer. This event, combined with our unification of the Greencastle, Pennsylvania, and Kearneysville, West Virginia, operations in Chambersburg, Pennsylvania, and start up of the bottled water plant adversely affected our financial position and results of operations," stated Marshall Sorokwasz, President and Chief Executive Officer of Impreso, Inc.
"In June and July 2005, we executed contracts for sale on our Greencastle, Pennsylvania, and Kearneysville, West Virginia plants," continued Mr. Sorokwasz. "We combined these operations into a larger facility in Chambersburg last year and have had these buildings on the market for sale since that time. We intend to consummate these transactions in late August and early September. The sale of these plants and the elimination of the mortgage payments will improve our monthly cash flow, and a portion of the profits will be applied to reduce the outstanding balance on our revolving line of credit," concluded Mr. Sorokwasz.
About Impreso, Inc.
Impreso, Inc. is a holding company for TST/Impreso, Inc. and HotSheet.com, Inc. TST/Impreso, Inc. is a manufacturer and distributor of hard copy imaging products for commercial and home use in domestic and international markets. HotSheet.com, Inc. primarily owns HotSheet.com, a single-page, online Internet directory with categorized links to premier web destinations. Alexa Springs, Inc. is a natural spring water bottling operation. The Company's website domains are www.hotsheet.com, www.impreso.com, and www.tstimpreso.com.
Impreso, Inc. is headquartered in Coppell, Texas, and its common stock trades on the Nasdaq SmallCap Market under the symbol "ZCOM."
This press release may include statements that constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect," "should" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products in the marketplace, competitive factors, new products and technological changes, paper prices and raw material costs, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
IMPRESO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended May 31, May 31, 2005 2004 ------------- ------------- Net sales $ 19,829,734 $ 25,475,573 Cost of sales 18,733,138 21,959,557 ------------- ------------- Gross profit 1,096,596 3,516,016 Gain on sale of assets (42,685) (14,229) Selling, General and administrative expenses 2,220,005 2,626,119 ------------- ------------- Operating (loss) Income (1,080,724) 904,126 Other expenses (income): Interest expense 322,641 243,988 Extinguishment of debt (489,645) - Other income, net (65,384) 105,523 ------------- ------------- (Loss) income before income tax expense (848,336) 554,615 Income tax (benefit) expense: Current (407,828) 324,915 Deferred 133,138 (118,351) ------------- ------------- Total income tax (benefit) expense (274,690) 206,564 Net (loss) income $ (573,646) $ 348,051 ============= ============ Net (loss) income per share (basic and diluted) $ (0.11) $ 0.07 ============= ============ Weighted average shares outstanding 5,278,780 5,278,780 ============= ============ IMPRESO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Nine Months Ended May 31, May 31, 2005 2004 --------------- --------------- Net sales $ 58,435,505 $ 77,885,681 Cost of sales 55,782,864 67,362,876 --------------- --------------- Gross profit 2,652,641 10,522,805 Gain on sale of assets (142,285) (14,229) Selling, General and administrative expenses 6,728,183 7,791,543 --------------- --------------- Operating (loss) Income (3,933,257) 2,745,491 Other expenses (income): Interest expense 900,903 876,085 Embezzlement recovery (290,840) - Extinguishment of debt (489,645) - Other income, net (285,662) 99,369 --------------- --------------- (Loss) income before income tax expense (3,768,013) 1,770,037 Income tax (benefit) expense : Current (1,629,201) 865,160 Deferred 403,890 (187,630) --------------- --------------- Total income tax (benefit) expense (1,225,311) 677,530 Net (loss) income $ (2,542,702) $ 1,092,507 =============== =============== Net (loss) income per share (basic and diluted) $ (0.48) $ 0.21 =============== =============== Weighted average shares outstanding 5,278,780 5,278,780 =============== ===============
For further information, please contact: Marshall Sorokwasz (972) 462-0100 (ext. 1103) or Tammy Yahiel General Counsel (972) 462-0100 (ext. 1117) e-mail at yahiel@tstimpreso.com