Rimage Corp. books strong Q3, repurchases shares
Shares of Rimage Corp. (Nasdaq: RIMG) are rallying today after the manufacturer and distributor of CD-Recordable (CD-R) and DVD-Recordable (DVD-R) publishing and duplication systems reported strong earnings for the third quarter and said it will repurchase an additional 500,000 shares.
For the three months ended Sept. 30, the Minneapolis, Minn.-based company recorded earnings of $6.2 million, or $0.59 per share, while two analysts polled by Thomson Financial were on average expecting earnings of $0.39 per share. For the third quarter of 2006, Rimage booked net income of $4.4 million, or $0.43 per share.
Sales rose 36% to $33.7 million, compared with $24.8 million in the same quarter last year. An analyst surveyed by Thomson Financial was expecting revenues of $31 million.
Rimage attributed its robust third-quarter performance to increased sales of high-end Producer disc publishing systems. The small cap noted that during the third quarter, revenues of approximately $8.4 million were recognized from two orders placed in the second quarter by major national retailers for Producer systems and related multi-year maintenance contracts and replacement printer ribbons.
In addition, Rimage said sales generated through its U.S. distribution channel increased by a stronger-than-anticipated 39% in the third quarter from second quarter level. Producer revenues accounted for the majority of total third quarter channel sales.
Higher sales of consumable supplies also contributed to the company’s strong performance in the third quarter, exhibiting growth in Rimage’s installed base of disc publishing systems in retail and other applications.
Rimage also reported that it has authorized a repurchase of an additional 500,000 shares of common stock. The new program replaces the completed share repurchase program that was adopted in July 2007, under which Rimage used cash to repurchase 500,000 shares during the third quarter.
Shares of Rimage (RIMG) rose 22.8%, or $1.96, to $26.75 at 11:10 a.m. ET. Shares of Rimage have been trading in the range of $20.50 to $34.63 for the past 52 weeks.
