Global Graphics reports third quarter and first nine months 2010 results

GLOBAL GRAPHICS SA (NYSE-Euronext: GLOG), experts in developing electronic document and printing software, announces consolidated financial results for the third quarter and the first nine months of the year ending 31 December 2010.

Comparisons for the third quarter of 2010 with the third quarter of the previous year include:

• sales of Euro 2.6 million this quarter, compared with Euro 1.8 million in Q3 2009;
• a nominal operating profit this quarter compared with an operating loss of Euro 0.7 million in Q3 2009;
• an adjusted operating profit of Euro 0.1 million this quarter compared with an adjusted operating loss of Euro 0.8 million in Q3 2009;
• an adjusted pre-tax profit of Euro 0.1 million this quarter (or an adjusted pre-tax profit of Euro 0.01 per share) compared with an adjusted pre-tax loss of Euro 0.8 million in Q3 2009 (or an adjusted pre-tax loss of Euro 0.07 per share);
• a nominal net loss this quarter (or a net loss of Euro 0.00 per share) compared with a net loss of Euro 0.8 million in Q3 2009 (or a net loss of Euro 0.08 per share); and
• a nominal adjusted net profit this quarter (or an adjusted net profit of Euro 0.00 per share) compared with an adjusted net loss of Euro 0.9 million in Q3 2009 (or an adjusted net loss of Euro 0.09 per share).

Commenting on performance, Gary Fry, Chief Executive Officer, said: “It is encouraging to see a turnaround in the Company’s business during the third quarter.  We have seen a positive trend in all segments of business and this, combined with our more realistic expense position after the reorganization which was implemented in April 2010, has put the Company in a stronger position.

“During the quarter we were successful in signing a new Japanese customer that specializes in high-speed digital production printing.  We expect that they will start shipping the Harlequin RIP next year. In the office printing segment our embedded customers performed well and the strategic partnerships that we have secured with several semi-conductor manufacturers are enabling us to develop unique propositions to give us more of a competitive edge in this segment.

“In the enterprise sector we signed new agreements for our gDoc range with corporate clients such as Rohde and Schwarz and Maxon Motor AG during the quarter.  However, our main focus has been in providing our customers with white label versions of our gDoc applications for bundling with their software applications or their hardware.  We signed a significant contract in the third quarter and other white label partnerships are currently being negotiated.”

Third quarter 2010 performance
Sales for the third quarter of 2010 amounted to Euro 2.6 million, compared with Euro 1.8 million in the third quarter of 2009, or a sequential increase of 42.3% at current exchange rates, and of 28.8% at constant exchange rates.

Total operating expenses amounted to Euro 2.4 million this quarter, compared with Euro 2.5 million in the third quarter of 2009, and Euro 3.3 million for the second quarter of 2010.

The Company reported a nominal operating profit for this quarter (or an operating profit equivalent to 1.7% of the quarter’s sales), compared with an operating loss of Euro 0.7 million in the third quarter of 2009 (or an operating loss equivalent to 37.6% of that quarter’s sales).

The Company reported an adjusted operating profit (as defined in the accompanying table) of Euro 0.1 million for this quarter (or an adjusted operating profit equivalent to 4.5% of the quarter’s sales), compared with an adjusted operating loss of Euro 0.8 million in the third quarter of 2009, equivalent to 41.9% of that quarter’s sales.
The Company reported an adjusted pre-tax profit (as defined in the accompanying table) of Euro 0.1 million for this quarter, compared with an adjusted pre-tax loss of Euro 0.8 million in the third quarter of 2009. Accordingly, adjusted pre-tax EPS was a profit of Euro 0.01 this quarter, compared with an adjusted pre-tax loss of Euro 0.07 per share in the third quarter of 2009.

The Company reported a nominal net loss for this quarter (or a net loss of Euro 0.00 per share), compared with a net loss of Euro 0.8 million in the third quarter of 2009 (or a net loss of Euro 0.08 per share).

The Company reported a nominal adjusted net profit (as defined in the accompanying table) for this quarter, compared with an adjusted net loss of Euro 0.9 million in the third quarter of 2009. Accordingly, adjusted net EPS was a profit of Euro 0.00 this quarter, compared with an adjusted net loss of Euro 0.09 per share in the third quarter 2009.

First nine months performance
Sales for the first nine months of 2010 amounted to Euro 6.8 million compared with Euro 7.1 million for the same period of 2009, or a sequential decrease of 5.2% at current exchange rates, and 9.3% at constant exchange rates.

Total operating expenses amounted to Euro 8.7 million for the first nine months of 2010, compared with Euro 7.8 million for the same period of 2009. 2010 operating expenses included non-recurring expenses (net of any non-recurring items of income) for Euro 0.4 million, which principally consisted of expenses incurred with regards to the reorganization plan of the Company which was initiated in April 2010, as well as and another Euro 0.1 million with respect of allowances for certain doubtful accounts.

The Company reported an operating loss of Euro 2.2 million for the first nine months of 2010 (or a loss equivalent to 33.2% of the period’s sales), compared with an operating loss of Euro 0.9 million for the same period of 2009 (or a loss equivalent to 12.3% of that period’s sales).

The Company reported an adjusted operating loss (as defined in the accompanying table) of Euro 1.7 million for the first nine months of 2010 (or a loss equivalent to 24.9% of the period’s sales), compared with an adjusted operating loss of Euro 1.2 million for the same period of 2009 (or a loss equivalent to 17.1% of that period’s sales).

The Company reported an adjusted pre-tax loss (as defined in the accompanying table) of Euro 1.9 million for the first nine months of 2010 (or an adjusted pre-tax loss of Euro 0.19 per share), compared with an adjusted pre-tax loss of Euro 1.3 million for the same period of 2009 (or an adjusted pre-tax loss of Euro 0.13 per share).

The Company reported a net loss of Euro 2.7 million for the first nine months of 2010 (or a net loss of Euro 0.26 per share), compared with a net loss of Euro 1.5 million for the same period of 2009 (or a net loss of Euro 0.14 per share).

The Company reported an adjusted net loss (defined in the accompanying table) of Euro 2.1 million for the first nine months of 2010, compared with an adjusted net loss of Euro 1.7 million for the same period of 2009. Accordingly, adjusted net EPS was a loss of Euro 0.21 per share for the first nine months of 2010, compared with an adjusted net loss of Euro 0.17 per share for the same period of 2009.

Full year 2010 outlook
Gary Fry continued: “We are pleased with the Company’s performance in the third quarter and expect the underlying trends which have contributed to this recovery to continue in the fourth quarter.

“The Company’s expense position provides a solid base for future growth and the investments we have made in people since the start of the year have proved to be very positive in terms of our ability to execute on our strategy. We continue to drive innovation in all areas and are currently developing exciting new applications and are planning future releases of our RIP software that will keep both the Harlequin and Jaws RIPs at the leading edge in terms of performance and quality. I am also very pleased with the white label partnerships that we are negotiating for our gDoc applications.”
 
Fourth quarter and full year 2010 results announcement

Global Graphics (http://www.globalgraphics.com) is a leading developer of e-document and printing software. It provides high-performance solutions to the graphic arts/commercial print and digital print markets and for knowledge worker and professional software applications. The Company’s customers include Original Equipment Manufacturers (OEMs), system integrators, software developers and resellers and number the world’s leading brands of digital pre-press systems, large-format color printers, color proofing systems, digital copiers and printers for the corporate and SOHO (Small Office / Home Office) markets, as well as a wide variety of market leading software applications.

Forward-looking statements
This press release contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. These include statements regarding the Company’s growth, funding, expansion plans and expected results for future periods. Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Although management believes that their expectations reflected in the forward-looking statements are reasonable based on information currently available to them, they cannot assure any reader that the expectations will prove to have been correct. Accordingly, any reader should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of the date of this release. The Company undertakes no obligation to revise or update any of them, neither to reflect events or circumstances after the date of this release, nor to reflect new information nor the occurrence of unanticipated events.