Exhibit 99.2
Remarks of Bernard P. Aldrich
Rimage Corporation 1st Quarter FY 2009 Conference Call
April 22, 2009
| § | Good morning and thank you for taking the time to participate in our first quarter earnings conference call. |
| § | Joining me today is Sherman Black, our new president and chief operating officer, and Rob Wolf, our chief financial officer, who will review our recent operating results. |
| § | Also with us is Manny Almeida, our executive vice president of sales and marketing. |
| § | We will be pleased to take your questions at the conclusion of our remarks. |
| § | Regulation FD prohibits us from providing any forward-looking statements unless they are released simultaneously to the public. |
| § | It is important to understand that any forward-looking statements are subject to a number of risks that could affect our anticipated performance. |
| § | These risks are set forth in our filings with the Securities and Exchange Commission, which we urge you to review. |
| § | Turning now to the subject of this conference call, our first quarter sales came to $18.4 million, compared to $22.7 million in the year-earlier period. |
| § | First quarter earnings of $1.2 million or $0.13 per diluted share were down from $1.8 million or $0.18 per diluted share in the same period of 2008. |
| § | These operating results reflect the fact that many prospective customers have adopted an extremely cautious posture toward capital expenditures. |
| § | This hesitancy has caused many customers to defer purchasing our equipment, which has significantly lengthened selling lead times. |
| § | In addition, our customers are conservatively managing their inventories of consumable supplies, reflecting reduced consumption of blank discs and replacement printer ribbons/cartridges used in retail and other applications. |
| § | In a positive development, Rimage’s first quarter gross margin benefited from a shift in product mix as well as reduced costs stemming from service-related improvements to our products. |
| § | Our first quarter earnings also benefited from the actions we have taken in recent quarters to streamline our cost structure. |
| § | Due to our focus on cost control, selling, general and administrative expense has been reduced by approximately $1.3 million in comparison to last year’s first quarter. |
| § | However, we have increased spending on product development, reflecting our commitment to further strengthen Rimage’s position for future growth. |
| § | We will be able to maintain our strong emphasis on R&D thanks to Rimage’s exceptionally strong financial condition. |
| § | We ended the first quarter with cash and investments of nearly $97 million and a virtually debt-free balance sheet. |
| § | As a result, we have ample resources and financial flexibility for supporting our various growth initiatives. |
| § | Speaking of growth, interest in our CD/DVD/Blu-ray disc publishing capital equipment remains encouraging across a wide range of applications. |
| § | For example, all levels of the government market have been generating solid demand for our products, and we intend to intensify our sales efforts in this huge market. |
| § | We also are optimistic about the future of electronic medical records, a field that is gaining traction, particularly in Europe and Asia. |
| § | Having established a strong position in the medical market as the digital output solution for the imaging systems of GE and every other major manufacturer, we are well-positioned to capitalize on medical documents, which represent a much larger, long-term opportunity. |
| § | Various archiving and video applications also hold considerable potential for us going forward. |
| § | At the same time, we are continuing to evaluate new business opportunities. |
| § | Spearheading this process is Sherman Black, who will play a key role in formulating a long-range strategic plan for Rimage. |
| § | Our current and future opportunities, coupled with our ongoing commitment to R&D, make us optimistic about Rimage’s future. |
| § | So while our near-term performance may lag our historic norms, we have a great deal of confidence in Rimage’s prospects over the long haul. |
| § | Now, I would like to introduce Sherman Black, who started in his capacity as president and chief operating officer earlier this month. |
| § | Prior to joining Rimage, Sherm amassed wide-ranging experience and a highly successful career with Seagate Technology, where he most recently served as senior vice president, marketing and strategy, of the Core Products Business Group. |
| § | During his 20-year career with Seagate, Sherm also held a range of other executive management positions in business development, sales and marketing. |
| § | Given his experience and leadership capability, his appointment as president and chief operating officer will significantly strengthen our management team. |
| § | Now, Sherm will share his initial impressions about Rimage. |
Remarks of Sherman Black
Rimage Corporation 1st Quarter FY 2009 Conference Call
April 22, 2009
| § | It’s a genuine pleasure to be with you this morning as part of Rimage’s first quarter conference call. |
| § | I also am enthused by the opportunity to work with this strong company and its highly capable management team. |
| § | Since I have been on the job for just a little over two weeks, I am still on a learning curve about Rimage’s operations, markets and products. |
| § | However, I would like to share with you a few of my initial impressions about what I have seen and learned thus far. |
| § | First, the quality of the people throughout all levels of this organization is exceptional. |
| § | Rimage’s employees are highly skilled and fully committed to meeting the needs of our customers. |
| § | All in all, Rimage’s foundation of human assets is very sound. |
| § | Second, the more I become grounded in Rimage’s current business, the more opportunities I see around our core business. |
| § | The opportunities facing this company are far from exhausted, which is why I am currently spending a great deal of time exploring how we can maximize our products, global distribution channel and other current capabilities...both here and overseas. |
| § | As we get further into this process, we may come across new potential areas that could extend beyond the current scope of our operations. |
| § | We will study any such opportunity if it makes good economic and business sense, and we will prioritize those that are complementary to our core business. |
| § | We have no intention of going on an acquisition spree, buying a wide array of unrelated businesses. |
| § | Rather, we will remain a highly focused organization, functioning as an integrator of technologies that are appropriate to the opportunities we will be pursuing. |
| § | This is a challenging period for Rimage and most other providers of capital equipment, but despite the impact of sluggish economic conditions, Rimage continues to be a profitable cash generator. |
| § | That, in itself, offers ample testimony to the underlying strength of this business. |
| § | Again, let me say that it is a pleasure to be with you today, and I look forward to speaking and meeting with you as I become more thoroughly grounded in this business. |
| § | Now, I will turn the call over to Rob Wolf, who will review our first quarter operating results. |
Remarks of Robert M. Wolf
Rimage Corporation 1st Quarter FY 2009 Conference Call
April 22, 2009
| § | First, I will run through some first quarter sales highlights. |
| § | Sales of digital publishing hardware declined 23% in the first quarter of 2009 and accounted for 36% of total sales, compared to 36% in last year’s fourth quarter and 38% in the first quarter of 2008. |
| § | Recurring revenues, including sales of printer ribbons and cartridges, parts, blank CD/DVD media and maintenance contracts, declined 17% in this year’s first quarter in comparison to the year-earlier period. |
| § | Recurring revenues accounted for 64% of sales in this year’s first quarter, compared to 64% in the fourth quarter and 62% in the first quarter of 2008. |
| § | Consumable supplies and services have accounted for a higher than normal proportion of our total sales over the past year due to the economy-related slowdown in sales of disc publishing hardware. |
| § | International sales declined 10% in this year’s first quarter and accounted for 48% of total sales, compared to 43% in the year-earlier period. |
| § | Our lower international sales reflect the impact of foreign currency effects, which decreased worldwide sales by 5% in the first quarter of 2009. |
| § | Rimage’s gross margin rose to 47% in the first quarter, from 39% in last year’s fourth quarter and 43% in the first quarter 2008. |
| § | As we said in this morning’s release, our first quarter gross margin benefited from a shift in product mix and reduced costs related to product improvements that have further strengthened their performance and reliability. |
| § | We anticipate a gross margin in the low 40% range in the second quarter. |
| § | Moving down the P&L, our overall cost structure in the first quarter continued to benefit from the expense reduction measures that we have instituted over the past several quarters. |
| § | Reflecting the impact of workforce reductions and other cost control measures, selling, general and administrative expense totaled $5.3 million in this year’s first quarter, down from $6.6 million in the first quarter of 2008. |
| § | First quarter SG&A was up modestly from $5.1 million in the fourth quarter of 2008. |
| § | We believe SG&A will remain at or near the current level in this year’s second quarter. |
| § | R&D expense partially offset the improvement in SG&A, rising to $2.0 million in the first quarter, from $1.2 in the fourth quarter and $1.4 million in last year’s first quarter. |
| § | The increase in R&D expense resulted from a higher level of investments in new product development in addition to important enhancements to our current product line. |
| § | R&D expense is expected to continue at a relatively high level in the second quarter. |
| § | Our operating margin was 7% in the first quarter, compared to 9% in last year’s fourth quarter and 7% in the first quarter of 2008. |
| § | We were taxed at an effective rate of 33% in this year’s first quarter and believe our full-year tax rate will be in the range of 34% to 35%. |
| § | Turning now to our balance sheet, cash and investments totaled $96.7 million at March 31, 2009, up from $95.4 million at the beginning of this year. |
| § | We made no share repurchases in the first quarter, and approximately 423,000 shares remain available for repurchase under an uncompleted authorization. |
| § | Finally, stockholders’ equity came to $110.3 million at the end of the first quarter, up from $109.0 million at the beginning of the year. |
| § | That wraps up our formal remarks, and now the conference call operator will poll you for any questions. |
