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X-Rite's 3Q: Not So Colorful
GRANDVILLE — If X-Rite Inc. could use its industry-leading color management tools to measure its own financial success, the third quarter of 2005 would probably come out as an olive drab — plenty of green, no hint of red, and overall kind of boring. The company’s revenue is up compared to last year, but down compared to last quarter. Income is down by all measures. The company’s stock fell by 15 percent on the release of the quarter’s performance.
In the second quarter of this year, the company earned $2.9 million on just under $33 million in sales. This quarter, sales were down slightly to $28 million, but earnings fell to $922,000. That’s a reduction of 68 percent. During this quarter in 2004, the company managed $1.5 million in earnings on sales of just $27 million. X-Rite CFO Mary Chowning said that investments in infrastructure outpaced cost control measures, resulting in what she called “a small year-over-year decline in our operating income.” That decline was 24 percent.
Not all the news was so gloomy. The company eagerly touted the success of its Asian operations and its digital imaging business, both of which contributed positively to the quarter’s bottom line. CEO Michael Ferrara said that he expects retail operations to grow throughout the fourth quarter. He was also pleased to discuss the company’s Kaleidoscope home décor collaboration with La-Z-Boy. It will, he said, provide “recurring revenue” beginning early next year.