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Media Sciences Doubles Income for Second Consecutive Quarter
Company Reports Color Toner Cartridge Sales Increase of 41%
OAKLAND, N.J., Feb.06– Media Sciences International, Inc. a leading independent manufacturer of generic supplies for office color printers, today announced its second quarter earnings for the period ended December 31, 2005.
Consolidated net sales for the quarter ended December 31, 2005, increased approximately ten percent to $5.1 million from $4.7 million for the same period in the prior year. In the Company’s second quarter, color toner cartridge sales increased by 41 percent and solid ink sales increased by three percent. Consolidated net sales for the six-month period ended December 31, 2005 increased to $9.9 million from $9.1 million for the same period in the prior year.
Consolidated gross profit for the three months ended December 31, 2005 was $2.9 million or approximately 57% of sales as compared to $2.3 million or approximately 49% of sales for the period ended December 31, 2004. Consolidated gross profit for the six months ended December 31, 2005 was $5.6 million or approximately 56% of sales as compared to $4.4 million or approximately 49% of sales for the period ending December 31, 2004. Media Sciences has benefited from margin expansion due to increased efficiencies in solid ink manufacturing and the mix of products comprising its toner sales. Margins for the remainder of the fiscal year are expected to remain fairly consistent with current results.
For the three months ended December 31, 2005, income from continuing operations was $0.45 million or $0.04 per share basic and diluted, versus $0.24 million or $0.02 per share basic and diluted in the prior year. For the six months ended December 31, 2005, income from continuing operations was $0.88 million or $0.08 per share basic and diluted, versus $0.42 million or $0.04 per share basic and diluted in the prior year.
In May 2005, the Company ceased all electronic pre-press system sales and service operations, which represented a majority of the operations of the Company’s Cadapult subsidiary. The results of operations for that line of business are classified as discontinued operations. Sales and service revenues from discontinued operations for the quarter ended December 31, 2004 were $0.45 million. Income from discontinued operations for the three months ended December 31, 2004 was $0.033 million. Sales and service revenues from discontinued operations for the six months ended December 31, 2004 were $0.89 million. Income from discontinued operations for the six months ended December 31, 2004 was $0.066 million.
Media Sciences expects overall revenue growth in the second half of fiscal year 2006 to outpace revenue growth in the first half. As a result of new products and current sales trends of existing products, the Company anticipates growth in sales of color toner cartridges to outpace growth in sales of solid ink products in fiscal 2006.
Expansion of Development and Sales Teams and Product Line
In December 2005, Lawrence L. Anderson was promoted to Chief Operating Officer, with responsibility for the Company’s research and development. Also in December the Company hired Robert Catena, formerly of Sun Chemical, to the new position of Director of Solid Ink Development.
Further, the Company expanded its sales force with the addition of two regional sales directors in the past 90 days. These senior-level professionals bring to Media Sciences a combined 35 years of experience in selling aftermarket supplies.
New product shipments that began in December included solid ink sticks for use in the Xerox® Phaser® 8500 and 8550 printers and color toner cartridges for use in the Ricoh® AP3800C and related printer engines. The Company anticipates two new product introductions before the end of its third quarter.
Exceptional Rating in Corporate Governance
The strengths, deficiencies and risks of the Company’s corporate governance practices and board of directors were recently reviewed by Institutional Shareholder Services (ISS). As a result of recent changes to its corporate governance practices, Media Sciences’ Corporate Governance Quotient (CGQ®) as of February 1, 2006 was upgraded to the 98.7 percentile of CGQ Universe companies. The CGQ corporate governance rating system is provided by ISS on over 8,000 companies worldwide.
On the exceptional CGQ rating, Michael W. Levin, President and Chairman of Media Sciences International, Inc., commented, “Media Sciences embraces strong corporate governance practices and strives for consistent and transparent communications. We are pleased to see our standards of excellence in this area reflected so positively in the Corporate Governance Quotient on GFX provided by ISS.”
Office Color Opportunity
“Color printers with faster print speeds and higher quality are available at ever lower prices, making the migration of business printing from monochrome to color inevitable,” remarked Mr. Levin. On the unique position held by Media Sciences, he continued, “At Media Sciences, we are continually and strategically expanding our product line and our team so that more and more businesses using Oki®, Konica-Minolta®, Xerox®, and numerous other brands of office color printers will have the opportunity to save up to 30 percent when they select the Media Sciences® brand of newly manufactured supplies. Our knowledge and experience, our all newly manufactured and quality-tested products, and our proven warranty protection are empowering a growing base of customers to choose the Media Sciences alternative with tremendous confidence.”
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