Rimage CEO sees many untapped opportunities
Rimage Corp. (Nasdaq: RIMG) CEO Bernie Aldrich said the provider of CD and DVD publishing systems sees significant untapped opportunities in a number of large business service markets. The chief executive said some of these untapped markets include media and broadcasting, law enforcement, education, government, software and professional services. Aldrich made the comments during a morning conference call.
“We believe business service applications will drive a significant portion of our growth over the next few years,” Aldrich said. “We intend to devote considerable resources building positions in these areas similar to what we have achieved in the retail and medical markets.”
Aldrich said the Edina, Minn.-based firm’s profitable growth over the last two years has been driven by its ability to penetrate the retail and medical imaging markets. Rimage’s equipment has become the retail industry standard for on-demand publishing systems for CDs, DVDs and Blu-Ray discs, he said.
“We continue to see good opportunities in these markets both here and overseas that we will pursue aggressively in the years ahead,” Aldrich said.
He said Rimage is also moving into mammography imaging in the medical market.
Before the opening, Rimage posted fourth-quarter earnings of $4.5 million, or $0.45 per share, up 25% from $3.6 million, or $0.34 per share, a year earlier. Wall Street analysts expected earnings of $0.32 per share.
“Our forth-quarter earnings benefited from increased channel sales of Rimage’s producer equipment. We also benefited from an improved average selling price on this product line,” Aldrich said. “These factors helped drive our fourth-quarter gross margin to 48%, from 45% in last year’s fourth quarter.”
Quarterly revenue fell 2% to $28.2 million, from $30.5 million. The firm blamed the lower sales on large national retailers, who did not place significant orders. Rimage’s fourth-quarter revenue was driven primarily by its global distribution channel, the company said in a press release. Analysts projected $26 million in revenue.
Also Wednesday morning, Rimage announced that its board of directors issued a 500,000-share repurchase authorization. Under the company’s share repurchase plan, 1 million shares are available for repurchase.
Going forward, Rimage expects first-quarter earnings of between $0.21 and $0.26 per share on revenue in the range of $22 million to $24 million.
“We believe the first quarter of 2008 should be another period of progress and improved operating results for Rimage,” Aldrich said.
In midday trading, RIMG shares are up 12.62%, or $2.70, at $24.10. Over the last 52 weeks, shares have ranged from $20.79 to $34.63.
