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May 4, 1999
Baldwin 3rd Quarter Results
Baldwin Technology Company,inc. announced earnings, before the effect
of a special charge of $2,021,000 or $0.12 per diluted share for its 3rd
quarter ending March 31, 1999, versus a net income of $2,225,000, or $0.13
per diluted share, for the same quarter the previous year.
Gerald A. Nathe, Chairman and President commented on the results: "As
we expected,our 3rd quarter sales and profits, prior to the special charge,
were essentially flat versus the year-ago levels. Net sales decreased
10% in our Graphic Products and Controls Group, with the reduction primarily
associated with our operations in Germany and Japan. Sales in our Material
Handling Group increased 17%, primarily as a result of increased shipments
of splicers and newspaper inserters.
We are encouraged by the improving gross profit margin rates in our Graphic
Products and Controls Group, which allowed us to hold our overall gross
profit margin rate equal to the prior year rate, notwithstanding higher
sales of lower margin splicers. Most of this improvement resulted from
our operations in Sweden and Germany. Operating expenses as a percentage
of net sales, however, are running higher than last year, partially due
to costs associated with our efforts to design new products with growth
opportunities and redesign existing products to lower our cost base."
Mr. Nathe concluded, "The lower order intake during the quarter,
while most significant in our domestic splicer business, affected nearly
all of our operations. Business activity levels in our industry appear
to be slowing. Indications in the marketplace suggest that this slow-down
will last at least through the remainder of this calendar year. This has
caused us to further intensify our efforts to seek new -areas of growth
and to aggressively pursue significant cost reductions in our existing
operations."
During the quarter the Company recorded an after-tax special charge of
$2,400,000, or ($0.14) per diluted share, resulting from the previously
announced claims regarding pension guarantees for the Company's divested
prepress operations. As a result, the Company's reported net loss for
the quarter was ($379,000), or ($0.02) per diluted share. Net sales for
the current period were $58,048,000 versus $60,199,000 for the prior year's
quarter, which included net sales of $1,640,000 from the Company's former
In-Line Finishing operation which was divested in November 1998. Foreign
currency translation impacts from the weaker US dollar resulted in increases
in net sales and net income of $1,619,000 and $49,000, respectively, for
the quarter.
Orders for the quarter were $46 million, a decrease of 29% compared to $65 million in orders for the prior year's quarter. Backlog at March 31, 1999 was $63 million, a decrease of 36% versus the level of a year ago (all prior year order and backlog amounts used for comparison purposes have been adjusted to reflect the divestiture of the Company's former In-Line Finishing operation).
