Media Sciences International, Inc. today announced its second quarter financial results for the period ended December 31, 2006. The Company will host a conference call Wednesday 14 February at 8:45 a.m. ET to discuss its quarterly results.
Highlights of the Company’s second quarter include:
* Record Net revenues of $6.1 million, an increase of 18% over the same
quarter last year.
* Gross margin at 58% of net revenues, an 800 basis point improvement
over the same quarter last year.
* Record Income from operations of $0.94 million, an increase of 21% over
the same quarter last year.
* Net income of $0.63 million, an increase of 38% over the same quarter
last year.
* EPS of $0.06 basic and $0.05 fully diluted.
* Record EBITDA of $1.2 million, an increase of 22% over the same quarter
last year.
* Operating cash flow of $0.35 million, a decrease of 74% over the same
quarter last year due primarily to building inventory associated with
recently announced products for use in Dell® and Epson® printers.
Net revenues for the second quarter were the best on record and $0.1 million ahead of the prior record set in the Company’s fiscal 2006 fourth quarter ended June 30, 2006. Consolidated net revenues for the three months ended December 31, 2006 compared to the same period in 2005, increased by $0.9 million, or 18% to $6.1 million, from $5.1 million. For the six months ended December 31, 2006 compared to the same period in 2005, net revenues increased by $1.8 million, or 18% to $11.7 million, from $9.9 million. The Company’s net revenue growth rate increased from the 10% and 9% realized, respectively, during the three and six months ended December 31, 2005 over the same period in 2004.
For the three months ended December 31, 2006 as compared to the same period in 2005, sales of color toner cartridges increased by about 35%, while sales of solid ink sticks increased approximately 22%. For the six months ended December 31, 2006 as compared to the same period in 2005, sales of color toner cartridges increased by about 38%, while sales of solid ink sticks increased approximately 15%. For the three and six months ended December 31, 2006 as compared to the same period in 2005, the Company experienced declines in its net revenues from its legacy Cadapult Graphics Systems business and from INKlusive printer sales. Placements of INKlusive printers during the three months ended December 31, 2006 were down as customers anticipated a new solid ink printer introduction, which is expected to occur in early 2007.
The year-over-year increase in net revenues is attributed primarily to recurring sales from the Company’s growing portfolio of color business printer supply products. To a lesser extent, some of the noted growth is also attributed to the general growth and increased market acceptance of color business printers and an increase in market share for some of our existing products.
In October 2006, Media Sciences began shipping toner cartridges for use in the Oki® C3100 and C3200 color business printers, with an installed base that is now the fourth largest in our portfolio of products. The European market comprises more than 80% of the estimated total ins