About Etan Rozin

This author has not yet filled in any details.
So far Etan Rozin has created 194 blog entries.

Creo to eliminate 200 positions globally, or 5% of workforce

Creo Announces Program Targeting Annualized Savings of US$24 Million; Management Confirms Company?s Strategic Direction






Vancouver, BC, Canada(October 6, 2004) ? Creo Inc. (NASDAQ: CREO; TSX: CRE) today announced a program designed to streamline operations, strengthen the company’s competitive cost position and provide a strong platform for earnings growth. The program will eliminate over 200 positions globally, or 5 percent of the total workforce, including 60 positions which were previously announced in August. The program will reduce expenses by an annualized rate of approximately $24 million by the start of the fiscal third quarter of 2005 and is expected to reduce operating expenses and cost of goods sold equally.


The company will host a conference call today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss today?s announcement. Details on how to participate in the call are included later in this news release.


The company estimates total pre-tax charges of approximately $6 million will result from the program, including $3 million in charges for the preliminary actions announced in August, all to be taken in the fiscal fourth quarter ended September 30, 2004. The impact of these charges will be approximately 9 cents per diluted share after tax. Of the total charges:



  • Restructuring expenses of approximately $4 million result from reorganization in the Americas and Europe, Middle East and Africa (EMEA) operations; and
  • Severance expenses of approximately $2 million are associated with the global workforce reduction.

Amos Michelson, Creo chief executive officer, stated, ?We are committed to building shareholder value and profitability from our core business and through the execution of the digital media strategy announced a year ago. We have systematically examined all parts of the business for both cost and contribution. The result is a set of initiatives that will deliver increasing earnings through fiscal 2005.?


Mr. Michelson continued, ?In fiscal 2004, we demonstrated the ability to drive consumables demand and to deliver high quality thermal plates. We have grown to become the fourth largest digital plate vendor in the world. However, we have not generated the bottom line performance we forecast this year. In fiscal 2005 we expect to continue similar top line growth while again increasing consumables revenue by more than 50 percent. More importantly, we are committed to do what is necessary to deliver on the bottom line. The measures announced today will allow us to achieve quarterly earnings before tax of at least eight percent of revenue by the fiscal fourth quarter of 2005.?


Outlook


Creo updates the following outlook for the fiscal fourth quarter ended September 30, 2004:



  • Revenue between $164 million and $166 million;
  • Restructuring charges of approximately 9 cents per diluted share, an increase of 4 cents per diluted share for additional activities undertaken since the estimate of 5 cents per diluted share announced on August 4. The company continues to expect 1 cent per share of intangible asset amortization.

Creo offers the following outlook for the fiscal first quarter ending December 31, 2004:



  • Revenue between $164 million and $171 million.

The guidance is based on foreign exchange rates on September 29th, 2004. All amounts are quoted in U.S. dollars using Canadian GAAP unless otherwise indicated.


Today?s Conference Call


Creo will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time), October 6, 2004 to discuss today?s announcement. The conference call may be accessed at http://www.creo.com/investors. To listen to the conference call live by telephone, dial 1-877-825-5811 for participants in North America and 1-973-582-2767 for international participants ten minutes before the start time. A telephone playback will be available after the completion of the call until October 9, 2004 at 8:00 p.m. Eastern Time (5:00 p.m. Pacific Time) and can be accessed at 1-877-519-4471 for participants in North America and 1-973-341-3080 for international participants using the access code 5224933.


2004 Fiscal Fourth-Quarter Financial Results

Creo will announce its 2004 fiscal fourth-quarter financial results on November 17, 2004 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The company will present the 2004 fourth-quarter financial results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time), the same day.


This news release contains forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.


These risks and uncertainties include the following: (1) new markets and product introductions do not proceed as planned and may adversely affect future revenues; (2) technological changes or changes in the competitive environment may adversely affect the products, market share, revenues or margins of the business; and (3) changes in general economic, financial or business conditions may adversely affect the business or the markets in which it operates. These risks and uncertainties as well as other important risks and uncertainties are described under the caption “Certain Factors That May Affect Future Results” and elsewhere in our Annual Report for the fiscal year ended September 30, 2003, as filed with the U.S. Securities and Exchange Commission and other documents filed with the U.S. Securities and Exchange Commission, and which are incorporated herein by reference. We do not assume any obligation to update the forward-looking information contained in this news release.


? 2004 Creo Inc. The Creo product names mentioned in this document are trademarks or service marks of Creo Inc. and may be registered in certain jurisdictions. Other company and brand, product and service names are for identification purposes only and may be trademarks or registered trademarks of their respective holders. Data is subject to change without notice.

Read More

Scitex- the END?

Creo considers shifting emphasis of its R&D investment to Canada

TheMarker, Ora Coren 31.8.2004 | 12:22

Creo, manufacturers of image technology and developers of new technology, are considering the continuation of R&D projects from Israel in other world centers, most of all Canada  Creo Israel CEO Michael Rolant said yesterday. He noted that Canada provides funding of 20% of R&D costs to companies, while in Israel the funding budget is meager, few companies benefit from it and criteria for receiving aid are obscure.

Rolant added that international Creo had already moved a large R&D operation from Israel over two years ago as a result of the combination of intifada and relatively low government support in comparison to Canada. The volume of sales from the project taken abroad is estimated at $65 million annually. In Canada 40 new employees were hired to work on the project in addition to the crew which left Israel for Canada to lead it.

Likewise, this year Creo international moved another project worth several million dollars to Canada, after failing to receive the support of the Chief Scientist of Israel, while the Canadian government is funding 20% of its scope.

Creo Israel will carry out R&D of $40 million in Israel in 2004, and the Chief Scientist has approved it government funding of only $400,000; the royalties which the company will pay to the Chief Scientist this year will total $4 million, said Rolant. After recruiting 70 to 80 new employees in 2004, the company has frozen hiring on a similar scale which had been planned for before the end of the year. The company employs a staff about 1000 in Israel.

Rolant noted that if the Chief Scientists budget is not increased, the company will be forced to reduce the share which its Israeli center plays in its business as a whole. The companys worldwide sales currently stand at around $600 million, half of those sales from development in Israel. Forecasts for 2007 are sales of $1 billion, and unless there is a change in the level of government support, Israels share will fall to 30% of those sales, he said.

At Creo we hold discussions on a quarterly basis regarding where to start R&D projects. We have two main centers  in Israel and Vancouver, in each of which 40% of our R&D takes place, and additional centers in the U.S. and Europe, Rolant added. Our intention is to draw R&D to Israel, and at the moment no activity is being shifted to Canada, but the cuts in grants by the Chief Scientist are not helping, he concluded.

Creo invests aggressively in R&D by comparison with competitors like Fuji and Kodak, and the pressure on the company to reduce its expenses on R&D is intense. The company has invested $150 million in Israel over the last three to four years in R&D. If that investment had been made in Vancouver we would have received $30 million, he said.

Rolant surmised that the cuts in the budget of the Chief Scientist emanated from the rivalry between Finance Minister Benjamin Netanyahu and Minister of Trade, Industry and Labor Ehud Olmert. Either the right honorable gentlemen will be called to order and see the Chief Scientist and Investment Center as a means to grow investment, or perhaps the Chief Scientist will transfer to the Finance Ministry and there, if the Finance Minister knows that he will reap the benefits, the budget will increase, said Rolant.

Read More

Creo awash in Q3 2004 red ink on charges

TORONTO, Aug 4 (Reuters By Jeffrey Hodgson) – Creo Inc. , a maker of printing software and
technology, found itself awash in red ink in the third quarter, hurt by foreign
exchange and restructuring charges, even as sales rose 9 percent.

The Vancouver, British Columbia-based firm warned it would face further
charges and lower margins in the coming quarter, a forecast analysts said would
disappoint investors.

“We’re not surprised that these numbers are coming in the way they are.
I think the street is going to be negatively surprised here,” said Todd Coupland,
an analyst with CIBC World Markets in Toronto.

“The biggest surprise I think for people is that the gross margin is coming
down and the operating expenses are rising, so the company is looking a lot less
profitable over the next several quarters.”

Creo reported a loss of $1.6 million, or 3 cents a share, in the quarter
ended June 30, compared with year-earlier net income of $2.8 million, or 5 cents
a share.

The company said revenues rose to $156.2 million from $143.5 million.

Analysts had expected a loss of 1 cent a share, including the charges, on
revenues of $155.5 million, according to Reuters Estimates.

Creo warned last month it would miss its previous earnings forecast due to
unusual charges. It said third-quarter profit would be cut by 5 cents a share,
resulting in a net loss of 1 cent to 3 cents a share on revenue of $156 million.

It said on Wednesday the loss included about 6 cents a share of after-tax
expenses. This included a $1.8 million charge caused largely by foreign exchange
losses, the result of the revaluation of Canadian dollar assets as the currency
weakened during the quarter.

Other charges included a restructuring expense of $600,000 as it scrapped
leases while closing some U.S. operations, and a non-cash intangible asset
amortization charge of $700,000.

“The results for the quarter were in line with what they’d already sort of
guided to in their pre-announcement, but guidance will certainly be taken as
disappointing, not so much on the revenue side but more on the cost side,” said
one Toronto-based analyst who follows the firm.

“It was surprising to hear that gross margins are declining to the extent
that they are, and that operating costs are not coming down like we had
expected.”

Creo said it expects fourth-quarter revenue of $163 million to $168 million
and earnings per share between nil and 4 cents.

“While we are confident about our topline growth prospects for 2005, we do
see some margin reductions over the next couple of quarters, due to pricing
pressure and product mix,” chief financial officer Mark Dance told analysts.

“We could see overall gross margins in the low 40s, lets say 41 to 43
percent, before moving back up to their recent historic ranges of 43 to 44
percent later next year.”

The earnings per share forecast includes about 1 cent of intangible asset
amortization and 5 cents of restructuring, retention and accelerated
amortization costs as Creo moves its U.S. distribution arm to Vancouver.

Analysts had expected a fourth-quarter profit of 8 cents a share on revenues
of $167.2 million REUTERS

? 2004 Reuters

Read More
Go to Top