Kentwood-based X-Rite Inc. (NASDAQ: XRIT) reported a 2.9 percent decline in first quarter sales over the year-earlier period, as well as a net loss of $16.8 million.
The company didn't provide a first quarter 2007 profit figure, but said the loss was an improvement from a loss of $19.6 million in the fourth quarter of 2006. Company officials said they didn't provide a comparable first-quarter 2007 figure because the operations of Pantone, acquired last Oct. 27, were so different from those of a publicly held company that direct comparisons were impossible.
Revenue in the first quarter was $65.9 million, down from $67.6 million in the first quarter of 2007.
X-Rite sells hardware, software and services for the communication and verification of color data. Its markets range from coatings to graphic arts.
Adjusting for the positive impact of the weaker United States dollar, the sales decrease was 6.8 percent on the same pro forma combined basis.
“Our sales rates began to soften just as we entered 2008 and led to our April 3 press release stating that our sales would be down in the first quarter of 2008 on a pro forma combined basis versus the first quarter of 2007,” X-Rite CEO Thomas J. Vacchiano Jr. said in a written statement. “Ultimately, our final first quarter 2008 sales results were down 2.5 percent at $65.9 million. We are optimistic about the sales potential for new products this year but remain cautious about our 2008 revenue outlook, given the various integration dynamics we are dealing with and a difficult economic climate. Our sales guidance is subject to the assumption that we will not experience material sales disruptions due to the negative publicity our credit agreement situation has created.”
The company said it was now predicting 2008 revenue of $272 million to $286 million. Revenue in 2007 was $283 million.
On April 3, the company announced a restructuring plan expected to result in $23 million of savings over the second quarter of 2008 through the first quarter of 2009. The company expects to realize $18 million of cost savings in the last three quarters of 2008.
Restructuring and integration costs were $1.4 million in the first quarter and are expected to be $5 million to 6 million in the balance of 2008. Of the restructuring savings, 70 percent are headcount-related and most of the actions to create the savings were taken in the first two weeks of April.
The company said it expects its 2008 earnings before interest, taxes, depreciation and amortization to be $60 million and $68 million.
To listen to a replay of a conference call discussing X-Rite's results, visit www.xrite.com and select the "Corporate / Investor Relations" page.
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