Datacolor in fiscal 2008/09
Despite significant decline in sales positive operating result before restructuring costs – Positive consolidated net profit – Dividend of CHF 3.00 per share proposed
Following the sale of Eichhof Beverage and the real estate portfolio, the measures introduced by the Board of Directors to realign the Eichhof Group toward the globally active color management company Datacolor are proving successful. The organizational streamlining and staffing changes began showing clear signs of a sustainably positive development in earnings during the second half.
Positive EBIT before one-off restructuring costs and consolidated net profit
In fiscal 2008/09, Datacolor's sales declined by 28.9% in local currencies in line with the slowdown in the international color management industry as a whole. On its continuing operations it posted net sales of CHF 51.2 million, a positive EBITDA of CHF 1.7 million (margin 3.3%), as well as a positive EBIT of CHF 0.3 million (margin 0.5%). After deduction of the extraordinary charge of CHF 2.3 million for the reorganization of Datacolor, EBIT came to CHF -2.0 million. Thanks to the sum of CHF 5.5 million that the sale of the Eichhof real estate portfolio contributed to profits, consolidated net profit for fiscal 2008/09 came to CHF 2.6 million. One of the effects of the process of reorganization was a reduction in the average headcount by 72 to 254 full-time equivalents. The operating margin was significantly increased already in the second half of the year under review. Adjusted for extraordinary costs, the EBITDA margin came to 8.7% and the EBIT margin stood at 5.9% in the second half of the fiscal year. At CHF 14.0 million, cash and cash equivalents, together with financial assets, accounted for a high 33.7% of total assets of CHF 41.6 million. Datacolor is debt-free, has a substantial net cash position of CHF 11.9 million and with shareholders' equity of CHF 24.8 million has a high equity ratio of around 60%. In view of the company's very good financial situation, the sustainable direction that earning power is taking and the initial signs of a recovery seen towards the end of the year under review, the Board of Directors proposes to the Annual General Meeting that a dividend of CHF 3.00 per registered share be paid.
After a difficult start, trend turned positive in second half
Datacolor's Industrial Business Unit reported a 31.7% decline in sales to CHF 39.5 million as customers' investment programs were abruptly halted in response to the onset of the economic crisis in fall 2008. By contrast, Service and Support sales were up 2.6% on the previous year's solid figure to CHF 13.1 million. The Consumer Business Unit posted an 18.8% decrease in sales to CHF 11.7 million, mainly because of cautious ordering and inventory reductions by major retail chains specializing in photographic products and electronics. Despite seeing its share decline slightly to 43% (previous year 46%), the European Region once again made the largest contribution to Datacolor's sales during the year under review. The USA increased its share to 29% (28%) and Asia/Pacific to 28% (26%). New orders stabilized during the course of the year under review and signs of a recovery in demand began to emerge in the second half.
Substantial investment in long-term corporate development
During the challenging fiscal year 2008/09, Datacolor made heavy countercyclical investments in the development of new products and software solutions, as well as in innovative sensor technology and the expansion of its service and support offering. Six new products were launched during the year under review, including a completely new release of the software package for color management in supply chains and the new spectrophotometer DatacolorCheck II for mobile color measurements. Four new products for the precise color matching of images on monitors and printers were added to the successful Datacolor Spyder product family. The relocation of manufacturing to Datacolor's efficient operations and production site in the Suzhou Industrial Park in China was, with the exception of the strategically important color sensors, largely completed during the year under review. The transfer of central manufacturing and parts of development to the operations and production site in China facilitated a sustainable reduction in production costs.
Ready for the upturn
Datacolor is prepared for the economic recovery. It has a rejuvenated, experienced management team, a strong, debt-free balance sheet, a successful product range and an attractive development pipeline ensuring a steady flow of new and innovative product launches. By concentrating on fast-growing market segments and thanks to its very good financial position, Datacolor is – in conjunction with targeted acquisitions – able to achieve its ambitious targets for growth and profitability.
Lucerne, December 1, 2009