Zomax Optical Media, Inc. Announces Third Quarter
1998 Financial Results Will Be Lower Than Analysts' Estimates
MINNEAPOLIS, Oct. 6 /PRNewswire/ -- Zomax Optical Media, Inc. (Nasdaq: ZOMX - news) today announced its third
quarter 1998 financial results will be lower than analysts' expectations. The Company expects third quarter 1998 revenues will
be approximately $14.8 million and diluted earnings per share will range from $.10 to $.12 per share. For the third quarter of
1997, revenues were $13.8 million and diluted earnings per share were $.24. The 1997 results included a one time sale which
accounted for $1.0 million in revenue and earnings of $.08 per share.
James T. Anderson, President and CEO, stated, ''Our third quarter revenues and earnings were negatively impacted by two
primary factors. One factor was a change in product mix. Print material and assembly services decreased in proportion to the
number of CD units sold. This mix change contributed to lower revenues and margin although CD unit shipments increased
substantially (97%) from the third quarter of 1997 and increased 13% over the second quarter of 1998. The second factor
was a decline in diskette sales. Diskette sales decreased 70% from the third quarter of 1997 as more content moved onto CD.
These product mix trends may continue into future quarters. While we are disappointed with the quarter's results, we are very
pleased to see continued strong increases in demand for CDs. This strong CD unit demand comes from both new and existing
customers as we continue to expand our production capacities. We are working very hard on our sales mix and replacing
diskette volume with increased CD volume.''
Zomax Optical Media, Inc. is a leading outsource service provider to software publishers, computer manufacturers and other
producers of multimedia products. These outsourcing services include compact disc (CD) and digital versatile disc (DVD)
mastering; DVD, CD, diskette and cassette replication; graphic design; print management; CD printing; packaging;
warehousing; inventory management; distribution and fulfillment; and returned merchandise authorization (RMA) processing
services. Zomax has facilities in Minneapolis, Boston, Hayward, Indianapolis, San Jose and Dublin, Ireland.
Statements contained in this press release regarding the Company's change in sales mix and the future sales mix of units sold
are forward-looking, based on current expectations. These forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Reform Act of 1995. There are certain important factors that could cause results to differ
materially from those anticipated, including: strategies of customers, market demand, general economic factors, such as
consumer confidence and inflation. Investors are cautioned that all forward-looking statements involve risk and uncertainty.
SOURCE: Zomax Optical Media, Inc. |
