The software behind perfect printed and digital communication
Perfect printed and digital communication

News Release

Pompey, France  08/08/2013

Global Graphics reports results for the second quarter and the first six months of 2013

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GLOBAL GRAPHICS SE (NYSE-Euronext: GLOG), experts in developing e-document and printing software, announces its consolidated results for the second quarter and the first six months of the financial year ending 31 December 2013.

ANALYSIS OF THE COMPANY’S FINANCIAL PERFORMANCE

Quarter ended 30 June 2013

Comparisons for the quarter ended 30 June 2013 with the second quarter of the financial year ended 31 December 2012 include:

  • sales of Euro 1.8 million this quarter (Euro 1.8 million also at Q2 2012 exchange rates) compared with Euro 2.4 million in Q2 2012, or a decrease of 27.6% at current exchange rates, and of 25.4% at constant exchange rates;
  • an operating loss of Euro 0.8 million this quarter, compared with an operating loss of Euro 0.1 million in Q2 2012;
  • an adjusted operating loss (EBITA) of Euro 0.5 million this quarter, compared with a nominal adjusted operating loss in Q2 2012;
  • a net loss of Euro 0.5 million this quarter (or a net loss of Euro 0.05 per share this quarter), compared with a net loss of Euro 0.1 million in Q2 2012 (or a net loss of Euro 0.01 per share in Q2 2012); and
  • an adjusted net loss of Euro 0.3 million this quarter (or an adjusted net loss of Euro 0.03 per share this quarter), compared with an adjusted net loss of Euro 0.1 million in Q2 2012 (or an adjusted net loss of Euro 0.01 per share in Q2 2012).

The Company’s consolidated results for the quarter ended 30 June 2013 were:

  • unfavorably impacted by non-recurring operating expenses amounting to Euro 0.1 million, which resulted from the Board’s decision to implement a reorganization of the Company’s legal structure, as announced in a press release issued on 15 April 2013; and
  • favorably impacted by the repayment to the Company’s UK subsidiary in late June 2013 of the R&D tax credit for the financial year ended 31 December 2012, for approximately Euro 0.4 million.
A similar amount had been repaid to the Company with respect to the R&D tax credit for the financial year ended 31 December 2011 during the third quarter of that year, when such tax repayment was recognized as a current tax benefit.

Six-month period ended 30 June 2013

Comparisons for the six-month period ended 30 June 2013 with the first six months of the financial year ended 31 December 2012 include:

  • sales of Euro 3.6 million in the first six months of 2013 (Euro 3.8 million, using exchange rates prevailing during the first six months of 2012) compared with Euro 4.5 million in the first six months of 2012, or a decrease of 18.7% at current exchange rates, and of 14.9% at constant exchange rates;
  • an operating loss of Euro 1.6 million in the first six months of 2013, compared with an operating loss of Euro 0.4 million in the first six months of 2012;
  • an adjusted operating loss (EBITA) of Euro 0.9 million the first six months of 2013, compared with an adjusted operating loss of Euro 0.3 million in the first six months of 2012;
  • a net loss of Euro 1.3 million in the first six months of 2013 (or a net loss of Euro 0.13 per share for that period), compared with a net loss of Euro 0.4 million in the first six months of 2012 (or a net loss of Euro 0.04 per share for that period); and
  • an adjusted net loss of Euro 0.7 million in the first six months of 2013 (or an adjusted net loss of Euro 0.06 per share for that period), compared with an adjusted net loss of Euro 0.4 million in the first six months of 2012 (or an adjusted net loss of Euro 0.04 per share for that period).

Sales reported for the six-month period ended 30 June 2013 include the royalty revenue referred to under note 2b (iii) of the Board’s report on operations for the financial year ended 31 December 2012, which is included in the Company’s annual financial report for 2012.

The Company’s consolidated results for the six-month period ended 30 June 2013 were:

  • unfavorably impacted by non-recurring operating expenses amounting to Euro 0.4 million, which resulted from the Board’s decision to implement a reorganization of the Company’s legal structure, as announced in a press release issued on 15 April 2013; and
  • favorably impacted by the repayment to the Company’s UK subsidiary in late June 2013 of the R&D tax credit for the financial year ended 31 December 2012, for approximately Euro 0.4 million.
A similar amount had been repaid to the Company with respect to the R&D tax credit for the financial year ended 31 December 2011 during the third quarter of that year, when such tax repayment was recognized as a current tax benefit.

Cash position and cash flow analysis

The Company had no outstanding debt and a cash position of Euro 1.7 million as at 30 June 2013, compared with a net cash position of approximately Euro 2.3 million as at 31 December 2012, and of Euro 1.5 million as at 30 June 2012.

Cash flows provided by the Company’s operations amounted to Euro 0.4 million in the six-month period ended 30 June 2013 (compared with cash flows used in the amount of Euro 0.1 million in the same period of the financial year ended 31 December 2012), allowing the Company to finance its operating requirements and its capital expenditures during the first six months of the current financial year.

Detailed discussion of the Company’s financial performance

A detailed discussion of the Company’s financial performance during the quarter and the six-month period ended 30 June 2013, including a comparison with the previous financial year’s comparative periods, is set out in note 2 to the interim management report of the Company’s Board of Directors for the quarter and the six-month period ended 30 June 2013, which is attached to this press release, together with the condensed consolidated interim financial statements for those periods.

MANAGEMENT’S COMMENTS

Gary Fry, Global Graphics’ Chief Executive Officer, stated: “Our first half performance was not in line with our expectations, notably in our Print segment, due to lower shipping volumes of certain of our digital press customers in comparison to the same period of 2012. Whilst it is beyond our direct control, we expect that this trend will not continue in the second half of 2013 and we anticipate stronger sales and a better operating performance during the remainder of 2013.

“During the second quarter of 2013 our Print development teams were busy readying technology launches for the second half of the year, including version 4.0 of our Harlequin Host Renderer which we announced in July. The Harlequin Host Renderer is used to build the digital front-ends that drive high-speed digital presses, and this release contained enhancements to color management and further increases in speed. It has been well received by our partners.

“This quarter, on the applications side of the Company’s business, the development focus has been on prototyping enhancements that can be added to our gDoc Platform by our OEM and system partners. We also prepared to launch our new gDoc Creator, a PDF creation product, that was announced in July, and which demonstrates to our partners the exceptional document conversion quality and speed that is possible when creating applications based on our platforms.”

UPDATE ON THE COMPANY’S LEGAL REORGANIZATION

On 7 June 2013, the Company’s shareholders rejected the proposed transfer of the Company’s share listing to NYSE Alternext Brussels, but unanimously approved the conversion of Global Graphics SA into a European Company (SE). Such conversion of the Company into a SE has been effective since 11 July 2013.

On 18 October 2013, the Company’s shareholders will be invited to vote on the proposed relocation of the Company’s registered office from France to the UK.

Additional information on the Company’s legal reorganization is available on a dedicated page of the Investor section of its website at: http://www.globalgraphics.com/investors/legal-reorganization.

INFORMATION ON THE COMPANY’S PERFORMANCE FOR THE QUARTER AND THE NINE-MONTH PERIOD ENDING 30 SEPTEMBER 2013

Global Graphics expects to provide information on its financial and operating performance for the quarter and the nine-month period ending 30 September 2013 on Friday 18 October 2013 before market opening.

Editors notes

About Global Graphics
Global Graphics (www.globalgraphics.com) is a leading developer of e-document and printing software. Its high-performance solutions are at the heart of products from customers such as HP, Fuji Xerox, Agfa, Corel and Quark.


Forward-looking statements
This press release contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. These include statements regarding the Company’s growth, funding, expansion plans and expected results for future periods.
Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Although management believes that their expectations reflected in the forward-looking statements are reasonable based on information currently available to them, they cannot assure any reader that the expectations will prove to have been correct. Accordingly, any reader should not place undue reliance on these forward-looking statements.
In any event, these statements speak only as of the date of this release. The Company undertakes no obligation to revise or update any of them, neither to reflect events or circumstances after the date of this release, nor to reflect new information nor the occurrence of unanticipated events.

Contact

Alain Pronost, Chief Financial Officer Tel: + 33 (0)6 62 60 56 51 Jill Taylor, Director of Corporate Communications Tel: + 44 (0)1223 926 489