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Sales of disc publishing hardware are currently running below previously forecasted levels as its distribution partners have adopted a more cautious approach toward their purchasing decisions in light of the uncertain economic environment. This has translated into longer selling cycles over the past few months. As a result, Rimage’s sales mix has shifted toward lower-margin consumable supplies, which has magnified the impact of below-plan sales on Rimage’s second quarter profitability. Rimage also announced that it has instituted expense reductions totaling approximately $2.0 million on an annualized basis. The full impact of the Company’s streamlined cost structure will begin to be realized in this year’s third quarter. Bernard P. Aldrich, president and chief executive officer, commented: “Like other capital goods suppliers, Rimage is encountering a difficult economic environment at this time. In our first quarter earnings release, we indicated that uncertain economic conditions had adversely affected our operating results for that period. Caution on the part of our customers has increased since that time. However, as evidenced by the cost reductions announced today, we are acting decisively to minimize the impact of the economy on our operations. At the same time, we believe that our longer-term prospects remain positive. We are aggressively pursuing numerous opportunities in our targeted retail, medical and business services markets. Moreover, we are moving forward with various product development initiatives that will equip us to capitalize more fully upon these promising opportunities.” Rimage will release its second quarter results during the third full week of July. www.rimage.com
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