XRite Continues Growth Surge

July 18, 2003
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GRANDVILLE — X-Rite Inc. yesterday reported net sales of $28.2 million for the second quarter ended June 28, an increase of 15.6 percent over nets sales of $24.4 million posted for the prior year’s second quarter.

Operating income for the quarter was $2.6 million, up 60 percent over last year.

Net income was $2 million, or 10 cents per share, compared to a loss of $5.5 million, or 27 cents a share for the year-ago period.

For the six months ended June 28 net sales were $51.8 million, a 14 percent increase over the first half of fiscal 2002.

Operating income for the six-month period was $4 million, an increase of nearly 223 percent over operating income of $1.3 million a year ago.

Net income for the first half was $3 million, or 15 cents per share, compared with a net loss of $13.4 million, or 66 cents per share, for the comparable period last year.

“This represents the fourth quarter in a row of year-over-year growth,” said CFO Duane Kluting. “We experienced growth across all geographies and all markets served. That’s the first time I’ve been able to say that in some time and it really pleases me a lot to do so.”

Despite the SARS situation, X-Rite’s Asian business has increased more than 40 percent from the second quarter of 2002, he said.

The weak dollar vs. European currency helped the company on the sales side but hurt it a bit in terms of operating expenses, Kluting noted.

“We’re in the growth mode and we’re going to stay on course,” said President Michael C. Ferrara. He said customers have been receptive as X-Rite continues to make the cultural transition from a product and technology company to a customer-focused company.

Business is up 11 percent in the coatings market, which represents nearly 40 percent of X-Rite’s business. Ferrara said the company sees a lot of coating business in China due to the manufacturing base developing there.

X-Rite’s Graphic arts business, which represents nearly 44 percent of X-Rite’s business, is up 22 percent from last year. That arm of X-Rite’s business includes printing, photo and digital imaging. Ferrara said the company is investing in those areas because it believes they will grow.

The company’s bio-diagnostic business, which serves the dental market, remains about the same size as last year — about 6.6 percent of the business. X-Rite’s ShadeVision System uses advanced colorimeter technology to determine the hue, value and chroma of teeth.

“We are right on the curve where we expect to be in terms of the acceptance of shade taking by (dental) laboratories and dental practitioners,” Ferrara said. “We have over 1,000 units installed. We are clearly the category leader.”

X-Rite’s laboratory color measurement business, which comprises slightly more than 10 percent of the company’s business, grew nearly 19 percent from a year ago.

During the just-passed quarter X-Rite:

  • Acquired the assets of Monaco Systems, a Massachusetts-based company that develops and distributes color management software. It was X-Rite’s third acquisition this year.

  • Launched a new brand strategy to promote products and services globally and consistently.

  • Was awarded the prestigious President’s “E” Award for excellence in exporting.

  • Was recognized as one of West Michigan’s top 10 “Best and Brightest” places to work by the Michigan Business & Professional Association.           

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