It announced that it is experiencing continued weakness in sales to the Europe, Middle East and Africa (EMEA) regions. These trends have primarily impacted sales in the automotive market, but Printronix is also experiencing longer sales cycles throughout a variety of markets.
Printronix elected to repatriate $32 million of accumulated foreign earnings and as a result it estimates a provision of$2.6 million for United States and foreign income taxes will be recorded in the fourth quarter and it expects to have a net loss after taxes for both the fourth fiscal quarter and the full fiscal year 2006 results.
California-based Printronix specialises in high-performance thermal and fanfold laser printing solutions and is a leader in pioneering technologies, including radio frequency identification (RFID)printing, bar code compliance and networked printer management.
It says that several major sales opportunities in EMEA that were expected to close in March have now slipped out of the quarter. In addition to the EMEA weakness, sales in the Americas region have also been impacted by the American automotive industry’s plans to reorganize and trim their operations, which resulted in deferral of purchasing decisions until the next fiscal quarter.
The company says it is continuing to invest to maintain its leadership position in RFID printing, thermal and line matrix solutions while closely managing costs. While the company continues to execute its cost reduction strategy, increased costs for Sarbanes-Oxley compliance and one-time costs related to a variety of consolidation efforts in the fourth quarter will more than offset the cost reduction efforts. Based upon the current revenue and spending projections, Printronix will most likely experience a loss from operations.
