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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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