Checkpoint to focus on apparel labeling
Checkpoint Systems, Inc. reported financial results for the first quarter ended March 28, 2010.
Net revenues for the first quarter of 2010 were $187.5 million compared to net revenues for the first quarter of 2009 of $159.0 million. Net earnings attributable to Checkpoint Systems, Inc. for the first quarter of 2010 were $3.5 million, or $0.09 per diluted share, compared to a net loss attributable to Checkpoint Systems, Inc. for the first quarter of 2009 of $2.0 million, or $0.05 per diluted share. Non-GAAP net earnings attributable to Checkpoint Systems, Inc. for the first quarter of 2010 excluding restructuring expense were $4.0 million, or $0.10 per diluted share. Non-GAAP net loss attributable to Checkpoint Systems, Inc. for the first quarter of 2009 was $0.9 million, or $0.02 per diluted share.
"Our first quarter results reflected the improving conditions in our core markets. We were particularly pleased with the Company's top line organic growth and the gross margin expansion in all our business segments, compared to one year ago," said Rob van der Merwe, Chairman, President and Chief Executive Officer of Checkpoint Systems. "Notably, both the Alpha and the EAS consumables lines of business experienced significant top line and gross margin growth."
Mr. van der Merwe concluded, "With this solid first quarter performance, typically our seasonally slowest quarter, we remain on track to deliver the financial goals we outlined earlier this year and thus reaffirm 2010 guidance. We remain committed to our stated strategy to focus on the converging fields of shrink management, merchandise visibility and apparel labeling."
Selected analysis and discussion for the first quarter of 2010:
• Net revenues increased 17.9%. Organic growth comprised 8.2% of the increase driven by the Apparel Labeling Solutions and Shrink Management Solutions business segments, notably Alpha high theft solutions and EAS consumables. Foreign currency effects contributed 4.9% of the increase driven principally by the weakened dollar versus the euro. Acquisition growth contributed 4.8% of the increase resulting from the acquisition of Brilliant Label Manufacturing, Ltd.
• Gross profit margin was 43.0% compared to 41.9% for the first quarter of 2009. All business segments experienced higher gross margins, notably in EAS consumables and Alpha high theft solutions businesses.
• GAAP operating income was $5.6 million compared to a $2.4 million operating loss for the first quarter of 2009. Non-GAAP operating income excluding restructuring expense was $6.1 million, or 3.2% of net revenues. Non-GAAP operating loss for the first quarter of 2009 was $0.6 million, or 0.4% of net revenues.
• Restructuring expense was $0.4 million due to our previously announced manufacturing restructuring plan and the initial stages of our selling, general, and administrative restructuring plan.
• Effective tax rate was 30.6% compared to 15.6% for the first quarter of 2009.