MEDIA SCIENCES INT’L NET INCOME DOWN 63%

[Anonymous]

MSI net income down 63 percent
September 2007 — Oakland (NJ): Media Sciences International has announced its annual financial results.
Net income fell 63 percent to $0.78 million from $2.13 million a year earlier. Basic and fully diluted EPS were $0.07Net revenue was up six percent to $22.5 million, from $21.3 million a year earlier. Gross margin was at 54 percent of net revenues, a 300 basis point improvement, year-over-year.

Michael Levin, president and chairman, said: “Fiscal 2007 was a year of investment and adjustment. We invested significantly in R&D, resulting in the fastest product introduction in our history. In fiscal 2007, we recognised that we were not meeting our revenue growth expectations. We acted swiftly, making sweeping changes to our sales leadership, team, and structure. While the changes we made adversely impacted our financial results in the short term, each was necessary to build a firm foundation from which our company can scale to realise its growth potential.”

According to the company, its results were negatively affected by pre-tax litigation costs of $1.18 million and a one-off charge resulting from reorganisation of the company’s sales and marketing efforts.These items, along with other costs, reduced the company’s reported net revenues by $0.71 million, gross profits by $0.92 million, pretax income by $2.77 million, net income by about $1.68 million and earnings per share by about $0.14 per diluted share.Levin continued: “There are three key initiatives for fiscal 2008. The first is to return to a revenue growth rate that reflects the opportunity we have in this market. In both the Americas and Europe we are strengthening existing relationships, and developing new distribution relationships, particularly in the office products and computer channels. We are doing so using the pricing and channel structure foundation put in place last year.”Second, we intend to better meet the needs of our European customers by expanding our distribution and logistics capabilities into Europe, and adopting regionalised pricing and local currencies, specifically the British Pound and the Euro.”And third, we intend to build our Asian based xerographic engineering and manufacturing capability over the course of the year to reduce toner product lead times (and thus inventory levels), reduce new product development time, and ultimately, reduce our toner product costs.””We are making significant progress on each of these initiatives. Our products are now actively being sold by two of the largest office products dealers in the US and one of the largest in Europe. We expect to have our European logistics in place in our second fiscal quarter. And, we are building our team in China. While last year was a year of adjustment, we are now focused purely on execution and we are seeing the results.”

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September 28, 2007 at 11:52 AM