Other highlights for the quarter and year ending Jan. 3 were:
- Gross margins improved over 1 percent, to 65.2 percent in the fourth quarter and 63.8 percent for the fiscal year.
- Operating income increased 35.7 percent for the year, while the firm continued to invest in R&D, engineering, sales and marketing.
- Customer base, product offering and end-to-end solution capabilities grew through three acquisitions, contributing $7.7 million to the year’s net sales.
X-Rite’s fourth quarter and fiscal 2003 net sales were $38.5 million and $117.1 million respectively, both records.
In releasing the report, CEO Michael C. Ferrara, said, “This is a very important year for X-Rite — a turning point.” Because the company refocused on its core color markets, he said, those markets delivered double-digit operating income.
“We posted the highest level of annual sales in our history, and we have now experienced six successive quarters of year-over-year revenue growth. We have a customer-driven strategy in place and a culture focused on accountability.”
Ferrara said X-Rite is adapting to deliver innovative technologies driven by its global partners.
“With Mary Chowning on board as chief financial officer, Jim Weaver’s appointment as vice president of product development and marketing, and Joan Andrew’s new role as vice president, global sales joining other key leadership team members, we have management in place that possess the world-class skills required to run a successful business.”
X-Rite reported operating income of $4 million for the quarter or 10.3 percent of sales. Included in operating income during the fourth quarter of 2003 were the following items affecting comparability:
- A $2.6 million write-down of assets including a goodwill impairment charge related to the Coherix shape mapping technology. The report said X-Rite will explore alternatives for this business, which could include a sale.
- $1 million of costs related to severance agreements with the former CEO and CFO. The full-year impact of the severance agreements was $1.4 million.
For the fiscal year, operating income was $8.7 million or 7.5 percent of sales, an increase of 35.7 percent over the prior year.
X-Rite reported net fourth quarter of $2.2 million or 11 cents per diluted share. Fiscal 2003 net income was $5.5 million or 27 cents per diluted share.
The report said X-Rite’s underlying fundamentals improved over 2002 in both the quarter and fiscal 2003.
It attributed its strong year-over-year performance to better-than-plan results throughout the X-Rite organization.
Ferrara said revenue growth was driven by all major business units and all geographic markets.
“Innovation and attention to the customer throughout X-Rite resulted in our success in 2003,” he said. “Thanks to our substantial efforts and our leading market positions, we expect to deliver double-digit revenue growth and higher operating income in 2004.”