MAASTRICHT ¿ Israeli-Dutch digital color printing company Indigo (Nasdaq:INDG, INDGW) reported record revenues for the third quarter of 2001 of $44.1 million, up 14% from the $38.7 million reported for the corresponding quarter of 2000.
Revenues were the highest ever reported by the company for a third quarter and follow a similar record profile achieved during the second quarter of this year.
Revenue growth would have been 16% before the negative impact of currency conversion, the company says.
Third-quarter unit shipments were also at an all-time high for a third quarter, increasing by more than 20% over the third quarter of 2000. The newest Indigo press, the Platinum, introduced in July 2001, made up nearly half of the units shipped.
Revenue from equipment sales increased 14% to $23.7 million, compared with $20.8 million in the third quarter of last year.
Equipment gross margins in the quarter were 28% compared with 45% in the same quarter last year, primarily due to the product mix, the increased contribution of lower-margin sales to distributors and OEMs in the sales mix, and price reductions in the U.S.
"We are pleased with Indigo's performance in the third quarter, despite the weak economic climate," commented chairman and CEO Benny Landa. "The slow-down in the economy was clearly evident at the Print '01 show with lower attendance and generally less activity than usual."
"We are excited about the HP acquisition of Indigo and the potential new opportunities this combination will yield," Landa added. Indigo and HP have yet to finalize the transaction, which was announced on September 6.
Indigo's net loss for the quarter was $7 million, up from the $2.4 million net loss for the third quarter of 2000. Loss was impacted by the decrease in gross margin as well as by expenses associated with the HP transaction, and with the Print '01 exhibition, and an increase in the bad debt reserve.
Loss per common share was $0.06, compared with a loss per common share of $0.03 in the third quarter of 2000 (excluding $61.6 million, or $0.78 per share, in dividends and conversion inducements on preferred shares).
Third-quarter net research and development expenses were $3.8 million, a 28% decrease compared with the third quarter of last year.
Sales, general and administrative expenses increased 28% to $20.9 million from $16.3 million in the third quarter of 2000.
General and administrative expenses, excluding a $1 million increase in the bad debt reserve, and $1.5 million related to the HP deal, were up slightly compared to the comparable quarter last year.
Sales expenses increased due to the growth of Indigo's direct sales force.
Marketing expenses were up as there were no major shows during the third quarter of last year, while this year's third quarter marketing expenses include approximately $2 million for the Print '01 exhibition, which took place in Chicago in September 2001.
Indigo's Chief Financial Officer, Alon Bar-Shany, commented, "This is the 17th quarter in a row that our operating revenues have grown compared to the same quarter in the previous year, though at a rate more modest than that achieved in the last several quarters.
"Through the first nine months, revenue has grown 17% year over year, very close to our guidance. However, there is less visibility for revenue growth in the fourth quarter, given the weak economic conditions."
He said Indigo ended the quarter with $77 million in cash and investments, and $18 million in short-term utilization of credit lines.