(RASTER-GRAPHICS)(RGFX) Raster Graphics Reports Third Quarter
Net Revenues Up 31 Percent
Business Editors
SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 20, 1997--Raster
Graphics, Inc. (NASDAQ:RGFX), a leader in large-format, on-demand
digital printing systems and software, today announced results for
its third quarter ended September 30, 1997, marking the Company's
fifteenth consecutive quarter of revenue growth and thirteenth
consecutive quarter of profitability.
Net revenue for the third quarter of 1997 increased 31 percent to
$14,330,000, as compared to $10,960,000 for the same period in 1996.
Net income for the third quarter totaled $889,000, a decrease of 5
percent, as compared to net income of $937,000 from the same period
in 1996. Earnings per share for the quarter were 9 cents, compared
to 10 cents per share for the third quarter of last year.
For the first nine months of 1997, net revenues increased 35
percent to $41,031,000, compared to $30,487,000 for the same period
in 1996. Net income increased 54 percent to $3,178,000, or 31 cents
per share for the nine-month period, compared to net income of
$2,069,000, or 25 cents per share for the same period last year. The
Company's financial results for 1996 referenced in this press release
and in the attached tables have been restated to include the results
of the ColourPass transaction for all periods presented.
Commenting on the quarter, Rak Kumar, Raster Graphics' President
and CEO said, "We believe our top line growth of over 30 percent,
although not meeting our internal targets, represents good
performance in a quarter which was extremely slow in several of
Raster Graphics' important international markets--a condition which,
we believe, existed across the industry." The Company attributes the
shortfall from its targets to slowness in two of its large
international markets, the United Kingdom and Germany, which
negatively impacted both total net revenue and gross margin
percentage. Over one-half of Raster Graphics' revenue is derived
from international markets. The revenue shortfall was somewhat
offset by strength in other international markets, such as Latin
America and the Far East, and by record performance in the United
States.
"Regarding the outlook for future quarters," Kumar continued,
"we believe the slowness we saw in Europe in the third quarter may
represent an overall moderation of industry growth rates. Therefore,
although we fully expect to finish 1997 with record annual results,
we are currently planning for somewhat slower growth rates in the
foreseeable future."
"We are continuing to make considerable investments in developing
and improving our distribution channels," commented Kumar. "We are
very excited to have also announced today the acquisition of
Datagraph, an experienced distributor of large format digital
printing systems in France. This acquisition gives Raster Graphics
an important direct presence in a major European market and is
another step forward in establishing our global distribution
channels. Additionally, during the quarter we made several important
hires in both the domestic and international sales organizations,
added a major OEM and five key dealers in the U.S., and recruited a
distributor in Spain. We believe these initiatives will help to
position Raster Graphics for continued revenue growth."
"We are pleased to have announced during the quarter
ColorBlend(tm) technology for the PiezoPrint(tm) 5000 inkjet
printer," said Kumar. ColorBlend uses the printer's optional fifth
and sixth ink stations to create prints that appear nearly
photographic, giving the impression of increased resolution. "This
capability allows Raster Graphics' customers to create graphics well
suited for applications which require close-up viewing such as
in-store advertising and graphics. Most images printed in standard
mode with ColorBlend will be of very high quality--rarely will it be
necessary to use the enhanced mode, thereby improving both output
quality and speed," Kumar concluded.
Raster Graphics, Inc. designs, manufactures and markets
large-format color printing systems for the on-demand, large-format
color digital printing market. Its customers include graphic arts
service bureaus, photo labs, screen printers, exhibit and sign
companies, and in-house graphics services. The Company offers
customers complete large-format color printing solutions including
its Digital ColorStation(tm) 5442 production electrostatic digital
press; the PiezoPrint(tm) 5000 and PiezoPrint 1000 production inkjet
printers; PosterShop(tm) image processing software; PiezoPrint Finale
finishing laminator; and related consumable products such as inks,
varnish, papers and films. Headquartered in San Jose, California,
Raster Graphics can be reached at (408) 232-4000, by fax at (408)
232-4100, or via the internet at rgi.com .
Certain of the matters discussed in this press release are
forward-looking statements, the accuracy of which is necessarily
subject to risks and uncertainties. Actual results may differ
materially from the statements made due to a variety of factors, but
not limited to (i) fluctuations in quarterly operating results, (ii)
risks associated with new product development and new technology,
(iii) unforeseen operational problems, and (iv) other risk factors
described in the Company's Form 10-K for the year ended December 31,
1996, as filed with the Securities and Exchange Commission (SEC), and
in the Company's other SEC filings including the Form 10-Q for the
quarter ended June 30, 1997.
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Raster Graphics, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Quarter Ended Nine Months Ended
9/30/97 9/30/96 9/30/97 9/30/96
Net Revenue $14,330 $10,960 $41,031 $30,487
Cost of revenue 8,473 6,461 23,874 18,315
------- ------- ------- -------
Gross profit 5,857 4,499 17,157 12,172
Operating expenses:
Research and development 1,524 1,082 4,269 3,326
Sales and marketing 2,543 1,868 7,157 5,092
General and administrative 885 598 2,380 1,516
Merger expenses -- 139 -- --
------- ------- ------- -------
Total operating expenses 4,952 3,548 13,945 9,934
------- ------- ------- -------
Operating income 905 951 3,212 2,238
Interest income, net 93 110 358 113
------- ------- ------- -------
Income before provision for
income taxes 998 1,061 3,570 2,351
Provision for income taxes 109 124 392 282
------- ------- ------- -------
Net income $ 889 $ 937 $ 3,178 $ 2,069
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Earnings per share $ 0.09 $ 0.10 $ 0.31 $ 0.25
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Shares used in per share
calculation 10,132 9,170 10,115 8,146
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