|Checkpoint Systems, Inc. Announces Third Quarter 2011 Results|
PHILADELPHIA, Nov 01, 2011 (BUSINESS WIRE) -- Checkpoint Systems, Inc. (NYSE: CKP) today reported financial results for the third quarter ended September 25, 2011.
Net revenues for the third quarter of 2011 were $218.1 million compared to net revenues for the third quarter of 2010 of $203.3 million. A net loss attributable to Checkpoint Systems, Inc. for the third quarter of 2011 was $49.3 million, or $1.21 per diluted share, compared to net earnings for the third quarter of 2010 of $7.1 million, or $0.17 per diluted share. Non-GAAP net earnings attributable to Checkpoint Systems, Inc. for the third quarter of 2011 excluding restructuring expenses, acquisition costs, and the impact of a change in valuation allowances were $15.3 million, or $0.38 per diluted share, compared to $12.0 million, or $0.30 per diluted share in the third quarter of 2010. (See accompanying Reconciliation of GAAP to Non-GAAP Financial Measures.)
Rob van der Merwe, Chairman, President and Chief Executive Officer of Checkpoint Systems, said, "Commencing in the third quarter we started to experience significant changes in retailer behavior, most notably in Europe. In some cases, large retailers abruptly stopped their automatic ordering processes from their suppliers and in other cases, held back on placing orders pending the reduction in new material input costs, such as cotton. The ongoing global economic uncertainty combined with unpredictable retailer behavior has convinced us that a conservative view of the market is required and that the Company needs to be immediately restructured to meet that view. As a result, we are revising our guidance for the balance of the year and embarking on an expanded and more wide-reaching global restructuring plan designed to reduce costs by approximately $58 million annually."
Mr. van der Merwe concluded, "We remain committed to our stated strategy. Through this challenging period, we believe our core businesses have maintained their relative market positions. Our immediate focus is not only to right size SG&A but also to accelerate gross margin recovery and ensure we remain well positioned in the market. We will continue to preserve cash and allocate resources to introducing new, innovative products to drive growth in our core businesses as well as the emerging merchandise visibility business."
Selected analysis and discussion for the third quarter of 2011:
Outlook for 2011
Based on an assessment of current market conditions, Checkpoint is reiterating guidance for 2011 that was provided on October 18, 2011. This guidance does not include the impact of unusual charges, such as additional restructuring expense, that the Company may incur during the year and assumes a continuation of current exchange rates.
Checkpoint Systems will host a conference call today, November 1, 2011, at 11:00 AM Eastern Time, to discuss its third quarter 2011 results. The conference call will be simultaneously broadcast live over the Internet. Listeners may access the webcast at http://ir.checkpointsystems.com. A replay will be available following the event.
Checkpoint Systems, Inc.
Checkpoint Systems is a global leader in shrink management, merchandise visibility and apparel labeling solutions. Checkpoint enables retailers and their suppliers to reduce shrink, improve shelf availability and leverage real-time data to achieve operational excellence. Checkpoint solutions are built upon 40 years of RF technology expertise, diverse shrink management offerings, a broad portfolio of apparel labeling solutions, market-leading RFID applications, innovative high-theft solutions and its Web-based Check-Net(R) data management platform. As a result, Checkpoint customers enjoy increased sales and profits by improving supply-chain efficiencies, by facilitating on-demand label printing and by providing a secure open-merchandising environment enhancing the consumer's shopping experience. For more information, visit http://www.checkpointsystems.com.
Caution Regarding Forward-Looking Statements
This press release includes information that constitutes forward-looking statements.Forward-looking statements often address our expected future business and financial performance, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," or "will."By their nature, forward-looking statements address matters that are subject to risks and uncertainties.Any such forward-looking statements may involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements.Factors that could cause or contribute to such differences include: our ability to integrate the Shore To Shore acquisition we acquired in the second quarter of 2011 and other prior acquisitions and to achieve our financial and operational goals for our acquisitions; changes in international business conditions; foreign currency exchange rate and interest rate fluctuations; lower than anticipated demand by retailers and other customers for our products; slower commitments of retail customers to chain-wide installations and/or source tagging adoption or expansion; possible increases in per unit product manufacturing costs due to less than full utilization of manufacturing capacity as a result of slowing economic conditions or other factors; our ability to provide and market innovative and cost-effective products; the development of new competitive technologies; our ability to maintain our intellectual property; competitive pricing pressures causing profit erosion; the availability and pricing of component parts and raw materials; possible increases in the payment time for receivables as a result of economic conditions or other market factors; changes in regulations or standards applicable to our products; the ability to successfully implement global cost reductions in operating expenses including, field service, sales, and general and administrative expense, and our manufacturing and supply chain operations without significantly impacting revenue and profits; our ability to maintain effective internal control over financial reporting; risks generally associated with our company-wide implementation of an enterprise resource planning (ERP) system and additional matters disclosed in our Securities and Exchange Commission filings.We do not undertake to update our forward-looking statements, except as required by applicable securities laws.
Reconciliation of Non-GAAP Financial Measures in Accordance with SEC Regulation G
Checkpoint Systems, Inc. reports financial results in accordance with U.S. GAAP and herein provides some Non-GAAP measures. These Non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. These Non-GAAP measures are intended to supplement the Company's presentation of its financial results that are prepared in accordance with GAAP. The Company uses the Non-GAAP measures presented to evaluate and manage the Company's operations internally. The Company is also providing this information to assist investors in performing additional financial analysis that is consistent with financial models developed by research analysts who follow the Company.
Set forth below is a reconciliation of the Non-GAAP financial measures used in this release to the most directly comparable measures based on GAAP.
SOURCE: Checkpoint Systems, Inc.
Checkpoint Systems, Inc.