Baldwin Announces 10 Percent Loss
Baldwin Technology Company, Inc., a global leader in process automation technology for the printing industry, reported its financial results for the company's first quarter ended Sept. 30.
First Quarter Fiscal Year 2012 Financial Results
The Company reported first quarter net sales of $35.9 million from continuing operations, a decrease of $4.1 million, or 10 percent, from net sales of $40.0 million for the first quarter of the prior year. Currency translation had a $2.3 million favorable impact on sales in the quarter. Sales were negatively impacted by temporary delays in production and timing of certain deliveries.
Orders in the fiscal first quarter were approximately $36.8 million, a decrease of 5 percent compared to orders in the first quarter of fiscal year 2011. Currency translation had a $1.3 million favorable impact on orders in the quarter. Backlog as of Sept. 30 was $36.2 million compared to $31.9 million a year earlier, an increase of 14 percent.
Gross margin in the first quarter of fiscal year 2012 decreased to 24.8 percent compared to 30.9 percent in the prior year primarily due to a realignment of certain global engineering and product management costs of approximately $1.3 million. Excluding the impact of the realignment of these costs, gross margin in the first quarter of fiscal year 2012 was 28.5 percent. Effective July 1, 2011, as a result of organizational changes that more closely align certain engineering functions with specific products and production, the Company started recording the related engineering and product management costs as cost of goods sold, whereas in prior periods these costs were properly recorded as operating expenses. Additionally, margins for the 2012 first fiscal quarter were negatively impacted by lower volume on fixed overhead. The negative impact on gross margin from the cost realignment and lower volume was partially offset by cost savings from the restructuring actions completed in the fiscal year 2011.
President and CEO Mark T. Becker said, "Lower sales levels in our fiscal first quarter compared to the same quarter last year reflect both timing issues of orders received (which will now be recognized in the second quarter) and general economic weakness experienced in Japan as earthquake recovery continues, and in the U.S. and Europe during recent national budget and political turmoil. While our backlog of $36 million is up 14% from prior year and we expect positive revenue trends, we remain cautious as we watch customer economic confidence which drives the timing of their major capital project orders. Our focus remains on driving higher margin consumable sales and growing revenue from press retrofit projects."
Vice President and CFO Ivan R. Habibe said, "We continue to be on track in the realization of our $5 million restructuring savings in fiscal year 2012 from programs announced and completed in 2011 with the related restructuring cash payments to be substantially completed by December 2011. The savings have been somewhat masked by the current volume shortfall but we are poised to show improvements in gross margins and lower operating costs."