Exhibit 99
Printronix Announces Second Quarter Results for Fiscal Year 2006
IRVINE, Calif.--(BUSINESS WIRE)--Oct. 27, 2005--Printronix, Inc.
(NASDAQ:PTNX), the leading manufacturer of integrated enterprise
printing solutions for the supply chain, today announced results for
the second quarter of fiscal year 2006, which ended September 23,
2005. Second quarter revenue was $29.0 million, down approximately
9.0% from $31.8 million in both the year ago quarter and the first
quarter of fiscal 2006. The company reported a net loss for the
quarter of $1.6 million, or $0.26 per diluted share, compared with a
net loss of $0.1 million, or $0.02 per diluted share, in the year ago
quarter and net income of $0.2 million, or $0.03 per diluted share, in
the first quarter of fiscal 2006.
Revenue for the first six months of fiscal year 2006 was $60.7
million, down from $65.1 million a year ago. Year to date net loss was
$1.4 million, or $0.22 per diluted share, compared with net income of
$0.3 million, or $0.05 per diluted share, a year ago.
"While we were disappointed by our sales results this quarter, we
anticipate improved results beginning in the fiscal third and fourth
quarters as we start to upgrade our existing installed base of line
matrix printers to our new product lines," said Robert Kleist,
President and CEO of Printronix. "During the fiscal second quarter,
our sales were impacted by the continued softness in the Western
European automotive and general manufacturing industries, and a
lengthening of the sales cycle that resulted in sales not closing as
expected in the U.S. market. However, the launch of the new P7000 line
matrix printer is expected to provide new sales opportunities to
upgrade our current installed base since we have received positive
customer feedback on the new P7000, branded under both the Printronix
and IBM brands."
"In the RFID market, the launch of Gen2 products created some
uncertainty as end users were either considering implementing or
migrating to Gen2 technology," continued Mr. Kleist. "In September,
Printronix advanced its position in RFID leadership and became the
first company to deliver RFID printing solutions that are
interoperable with the new EPC Gen2 protocol. We believe that the
introduction of Gen2 technology will become a driver of market
adoption as it provides a standard infrastructure for advanced
features and process improvements."
Gross margin was 37.3% for the second quarter, down slightly from
37.8% in the same period a year ago and down from 38.7% in the first
quarter of fiscal 2006, mostly due to lower production volumes partly
offset by favorable product mix. For the first six months of fiscal
year 2006, gross margin was 38.0%, down from 38.9% for the year ago
period, primarily for the same reasons.
Operating expenses in the quarter were $12.5 million, up from
$11.9 million in the year ago fiscal period. General and
administrative expenses increased primarily as a result of higher
consulting and audit costs associated with satisfying Sarbanes-Oxley
requirements and increased legal costs. Launch of the company's new
P7000 line matrix printer increased sales and marketing expenses
during the current quarter. Engineering and development expenses
decreased during the current quarter as a result of savings from cost
cutting initiatives partly offset by increased expenses for product
certification. Year to date operating expenses increased to $24.7
million, up from $24.4 million a year ago, mostly for the reasons
stated above, and were partly offset by a reduction of $0.4 million in
the company's provision for doubtful accounts during the first six
months of fiscal year 2006.
The company ended the second fiscal quarter of 2006 with cash and
short-term investments of $42.6 million, up from $39.6 million
compared with the second quarter of fiscal 2005, but down from $44.3
million at the end of the first quarter of 2006. The decrease in cash
from the prior quarter is partly due to a temporary increase in
inventories from product transitioning and partly due to a cash
dividend of $0.4 million paid in September. Interest income increased
$0.3 million compared with the year ago quarter due to higher cash and
short-term investment balances and higher interest rates; year-to-date
interest income increased $0.5 million compared to the year ago period
for the same reasons.
There will be an earnings conference call at 1:30 p.m. PT (4:30
p.m. ET) on October 27, 2005. The call will be broadcast live over the
Internet and will be hosted by Robert Kleist, President and CEO, and
George Harwood, Senior Vice President and CFO. To access the live
audio web cast, go to the Printronix web site at www.printronix.com
and select the conference call link to register. If you are unable to
listen to the live web cast, it will be archived for replay on the web
site. To listen to the live conference call via the telephone, you can
access the call at 800-395-0708. Shortly after the call, a telephonic
replay will be available through November 10, 2005, by dialing
888-203-1112 or 719-457-0820. Passcode I.D. 4537920 is required for
both the telephonic live call and the telephonic replay.
Except for historical information, this press release contains
"forward-looking statements" about Printronix, within the meaning of
the Private Securities Litigation Reform Act of 1995. Terms such as
"objectives," "believes," "expects," "plans," "intends," "should,"
"estimates," "anticipates," "forecasts," "projections," and variations
of such words and similar expressions are intended to identify such
forward-looking statements. These statements involve a number of
risks, uncertainties and other factors that could cause actual results
to differ materially, including: adverse business conditions and a
failure to achieve growth in the computer peripheral industry and in
the economy in general; the ability of the company to achieve growth
in the Asia Pacific market; adverse political and economic events in
the company's markets; a worsening of the global economy due to
general conditions; a worsening of the global economy resulting from
terrorist attacks or risk of war; a worsening of the global economy
resulting from an outbreak of avian flu or other world health
epidemic; a resurgence of SARS (Severe Acute Respiratory Syndrome);
the ability of the company to maintain its production capability in
its Singapore plant or obtain product from its Asia Pacific suppliers
should a resurgence of SARS occur; the ability of the company to hold
or increase market share with respect to line matrix printers; the
ability of the company to successfully compete against entrenched
competition in the thermal printer market; the ability of the company
to adapt to changes in the requirements for radio frequency
identification ("RFID") products by Wal-Mart and/or the Department of
Defense (the "DOD") and others; the ability of the company to attract
and to retain key personnel; the ability of the company's customers to
achieve their sales projections, upon which the company has in part
based its sales and marketing plans; the ability of the company to
retain its customer base and channel; the ability of the company to
compete against alternate technologies for applications in its
markets; and the ability of the company to continue to develop and
market new and innovative products superior to those of the
competition and to keep pace with technological change. The company
does not undertake to publicly update or revise any of its
forward-looking statements, even if experience or new information
shows that the indicated results or events will not be realized.
About Printronix, Inc.
Since 1974, Printronix, Inc. (NASDAQ:PTNX) has created innovative
printing solutions for the industrial marketplace and supply chain.
The company is the worldwide market leader in enterprise solutions for
line matrix printing and has earned an outstanding reputation for its
high-performance thermal and fanfold laser printing solutions.
Printronix also has become an established leader in pioneering
technologies, including radio frequency identification (RFID)
printing, bar code compliance and networked printer management.
Printronix is headquartered in Irvine, California. For company
information, see www.printronix.com.
PRINTRONIX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except share and per share data)
(unaudited)
Three Months Ended Six Months Ended
-------------------------------- ---------------------
Sept. 23, June 24, Sept. 24, Sept. 23, Sept. 24,
2005 2005 2004 2005 2004
---------- ---------- ---------- ---------- ----------
Revenue $28,958 $31,787 $31,808 $60,745 $65,086
Cost of sales 18,171 19,478 19,770 37,649 39,738
---------- ---------- ---------- ---------- ----------
Gross margin 10,787 12,309 12,038 23,096 25,348
Engineering and
development 3,608 3,868 3,916 7,476 7,914
Sales and
marketing 6,115 6,116 5,903 12,231 12,183
General and
administrative 2,751 2,250 2,104 5,001 4,287
---------- ---------- ---------- ---------- ----------
Total operating
expenses 12,474 12,234 11,923 24,708 24,384
(Loss) income
from
operations (1,687) 75 115 (1,612) 964
Interest and
other (income)
expense, net (224) (205) 7 (429) 69
(Loss) income
before taxes (1,463) 280 108 (1,183) 895
Provision for
income taxes 135 70 218 205 556
---------- ---------- ---------- ---------- ----------
Net (loss)
income $(1,598) $210 $(110) $(1,388) $339
========== ========== ========== ========== ==========
Net (loss)
income per
share:
- ---------------
Basic $(0.26) $0.03 $(0.02) $(0.22) $0.05
Diluted $(0.26) $0.03 $(0.02) $(0.22) $0.05
Shares used in
computing net
(loss) income
per share:
- ---------------
Basic 6,241,949 6,492,516 6,341,593 6,222,233 6,311,117
Diluted 6,241,949 6,636,244 6,341,593 6,222,233 6,496,798
Gross margin % 37.3% 38.7% 37.8% 38.0% 38.9%
Operating
expenses % 43.1% 38.5% 37.5% 40.7% 37.5%
(Loss) income
from
operations % -5.8% 0.2% 0.4% -2.7% 1.5%
Net (loss)
income % -5.5% 0.7% -0.3% -2.3% 0.5%
PRINTRONIX, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
Sept. 23, June 24, Sept. 24,
2005 2005 2004
--------- --------- ---------
ASSETS
Cash and cash equivalents $29,228 $27,656 $39,623
Short-term investments 13,384 16,600 -
Accounts receivable, net 15,649 17,104 17,352
Inventories, net 14,290 13,991 14,158
Other current assets 4,690 5,044 6,494
Property, plant and equipment, net 32,971 33,108 33,946
Other long-term assets 2,246 2,061 1,226
--------- --------- ---------
Total assets $112,460 $115,564 $112,799
========= ========= =========
LIABILITIES and STOCKHOLDERS' EQUITY
Current portion of long-term debt $700 $700 $700
Accounts payable 6,789 7,623 7,689
Other current liabilities 11,490 11,603 11,863
Other long-term liabilities 16,014 16,051 15,957
Stockholders' equity 77,467 79,587 76,590
--------- --------- ---------
Total liabilities and
stockholders' equity $112,460 $115,564 $112,799
========= ========= =========
PRINTRONIX, INC. AND SUBSIDIARIES
Sales Classification
(unaudited)
Three Months Ended Percent of Total
Sales
------------------- -------------------
Sales by Geographic Sept. 23, Sept. 24, Percent Sept. 23, Sept. 24,
Region 2005 2004 Change 2005 2004
- ---------------------- --------- --------- ------- --------- ---------
(dollar amounts in
thousands)
Americas $14,032 $15,606 -10.1% 48.5% 49.0%
EMEA 9,375 10,806 -13.2% 32.4% 34.0%
Asia Pacific 5,551 5,396 2.9% 19.1% 17.0%
--------- --------- --------- ---------
$28,958 $31,808 100.0% 100.0%
========= ========= ========= =========
Three Months Ended Percent of Total
Sales
------------------- -------------------
Sales by Product Sept. 23, Sept. 24, Percent Sept. 23, Sept. 24,
Technology 2005 2004 Change 2005 2004
- ---------------------- --------- --------- ----------------- ---------
(dollar amounts in
thousands)
Line matrix $20,857 $22,140 -5.8% 72.0% 69.6%
Thermal(a) 5,054 5,917 -14.6% 17.5% 18.6%
Laser 2,661 3,212 -17.2% 9.2% 10.1%
Verification
products 386 539 -28.4% 1.3% 1.7%
--------- --------- --------- ---------
$28,958 $31,808 100.0% 100.0%
========= ========= ========= =========
(a)RFID $792 $848 -6.6% 2.7% 2.7%
========= ========= ========= =========
Three Months Ended Percent of Total
Sales
------------------- -------------------
Sept. 23, Sept. 24, Percent Sept. 23, Sept. 24,
Sales by Channel 2005 2004 Change 2005 2004
- ---------------------- --------- --------- ------- --------- ---------
(dollar amounts in
thousands)
OEM $8,201 $8,880 -7.6% 28.3% 27.9%
Distribution 19,362 21,226 -8.8% 66.9% 66.7%
Direct 1,395 1,702 -18.0% 4.8% 5.4%
--------- --------- --------- ---------
$28,958 $31,808 100.0% 100.0%
========= ========= ========= =========
Three Months Ended Percent of Total
Sales
------------------- -------------------
Sept. 23, Sept. 24, Percent Sept. 23, Sept. 24,
Sales by Customer 2005 2004 Change 2005 2004
- ---------------------- --------- --------- ----------------- ---------
(dollar amounts in
thousands)
Largest customer -
IBM $6,630 $6,916 -4.1% 22.9% 21.7%
Second largest
customer 2,375 2,619 -9.3% 8.2% 8.2%
Top ten customers 14,443 16,159 -10.6% 49.9% 50.8%
PRINTRONIX, INC. AND SUBSIDIARIES
Sales Classification
(unaudited)
Six Months Ended Percent of Total
Sales
------------------- -------------------
Sales by Geographic Sept. 23, Sept. 24, Percent Sept. 23, Sept. 24,
Region 2005 2004 Change 2005 2004
- ---------------------- --------- --------- ------- --------- ---------
(dollar amounts in
thousands)
Americas $30,218 $30,523 -1.0% 49.7% 46.9%
EMEA 19,792 23,520 -15.9% 32.6% 36.1%
Asia Pacific 10,735 11,043 -2.8% 17.7% 17.0%
--------- --------- --------- ---------
$60,745 $65,086 100.0% 100.0%
========= ========= ========= =========
Six Months Ended Percent of Total
Sales
--------- --------- -------------------
Sales by Product Sept. 23, Sept. 24, Percent Sept. 23, Sept. 24,
Technology 2005 2004 Change 2005 2004
- ---------------------- --------- --------- ------- --------- ---------
(dollar amounts in
thousands)
Line matrix $43,062 $46,144 -6.7% 70.9% 70.9%
Thermal(a) 11,200 11,255 -0.5% 18.4% 17.3%
Laser 5,460 6,549 -16.6% 9.0% 10.1%
Verification
products 1,023 1,138 -10.1% 1.7% 1.7%
--------- --------- --------- ---------
$60,745 $65,086 100.0% 100.0%
========= ========= ========= =========
(a)RFID $1,735 $1,007 72.3% 2.9% 1.5%
========= ========= ========= =========
Six Months Ended Percent of Total
Sales
------------------- -------------------
Sept. 23, Sept. 24, Percent Sept. 23, Sept. 24,
Sales by Channel 2005 2004 Change 2005 2004
- ---------------------- --------- --------- ------- --------- ---------
(dollar amounts in
thousands)
OEM $17,693 $19,396 -8.8% 29.1% 29.8%
Distribution 40,186 41,485 -3.1% 66.2% 63.7%
Direct 2,866 4,205 -31.8% 4.7% 6.5%
--------- --------- --------- ---------
$60,745 $65,086 100.0% 100.0%
========= ========= ========= =========
Six Months Ended Percent of Total
Sales
------------------- -------------------
Sept. 23, Sept. 24, Percent Sept. 23, Sept. 24,
Sales by Customer 2005 2004 Change 2005 2004
- ---------------------- --------- --------- ------- --------- ---------
(dollar amounts in
thousands)
Largest customer -
IBM $14,270 $14,139 0.9% 23.5% 21.7%
Second largest
customer 4,971 5,203 -4.5% 8.2% 8.0%
Top ten customers 30,442 33,454 -9.0% 50.1% 51.4%
CONTACT: Printronix, Inc., Irvine
Robert A. Kleist, 714-368-2863
George L. Harwood, 714-368-2384
or
INVESTOR CONTACT:
EVC Group, LLC
Douglas M. Sherk, 415-896-6818
dsherk@evcgroup.com
Jennifer Beugelmans, 415-896-6817
jbeugelmans@evcgroup.com
or
MEDIA CONTACT:
WunderMarx, Inc.
Cara Good, 949-860-2434, ext. 312
cara.good@wundermarx.com