Thursday April 8, 8:05 am Eastern TimeCompany Press Release
Operating Results Continue to Improve At TST/Impreso, as Company Earns $0.05 Per Share in Second Quarter, Compared With Prior-Year Loss of -$0.13- Per Share
EBITDA Improves to $1.2 Million in First Half of FY1999
COPPELL, Texas--April 8, 1999--
TST/Impreso, Inc. (Nasdaq National Market: ``TSTI''), a leading
manufacturer and distributor of paper and film hard copy imaging
products for commercial and home office applications, today reported
that its operating results continued to improve in the second quarter
and first half of its 1999 fiscal year.
For the quarter ended February 28, 1999, net sales increased 45%
to $13.7 million, compared with net sales of $9.5 million in the
second quarter of the previous fiscal year. The Company recorded a net
profit of $259,436, or $0.05 per share, in the most recent quarter,
versus a net loss of ($687,786), or ($0.13) per share, in the
prior-year period.
Net sales for the six-month period ended February 28, 1999, rose
62% to $28.0 million, versus net sales of $17.3 million in the first
half of FY1998. Net income improved to $396,136, or $0.07 per share,
compared with a net loss of ($870,037), or ($0.16) per share, in the
corresponding period of the previous fiscal year.
``We are very pleased to report another strong increase in sales
and a continuation of our earnings turnaround during the second
quarter and first six months of fiscal 1999,'' commented Marshall
Sorokwasz, president and chief executive officer of TST/Impreso, Inc.
``Net income improved by approximately $1.3 million, or $0.23 per
share, in the six months ended February 28, 1999, when compared with
the prior-year period. EBITDA (earnings before interest, taxes,
depreciation and amortization), which represents an important measure
of cash flow and the financial health of any company, improved to $1.2
million during the first half of fiscal 1999, versus ($615,300) in the
corresponding period of the previous year.''
``Growing market acceptance of our new specialty imaging and
branded paper product lines has propelled sales to record levels
during recent quarters. Sales gains from the corresponding periods of
the prior year of 45%, 83%, 125% and 94% have been recorded in each of
the past four quarters, respectively. Meanwhile, gross profit margins
improved to 16.1% of sales in the most recent quarter, versus 7.5% a
year earlier and 14.5% in the quarter ended November 30, 1998.''
``We have continued to expand the distribution of our branded and
private-label products into new marketing channels, and revenues
during the past two quarters have included significant sales to a
major office supply superstore chain. Gross profit margins have
benefitted from the increase in branded product sales and our ability
to purchase raw paper supplies from foreign suppliers at relatively
attractive prices. In addition, our selling, general and
administrative expense ratio improved to 11.9% of sales during the
first half of fiscal 1999, from 15.1% in the prior-year period, as we
were able to spread fixed corporate overhead costs over a
substantially higher revenue base.''
``Our new higher-margin specialty products include transparency
films, glossy and matte-coated ink-jet papers, digital photo papers,
opaque gloss films and ink-jet T-shirt transfers, and we have recently
expanded our branded product line to include adding machine and
point-of-sale paper rolls,'' continued Sorokwasz. ``Although conditions
within the paper products industry remain unsettled and highly
competitive, we are optimistic that our branded and specialty imaging
products can continue to position TST/Impreso as a world-class
distributor to office products superstore retail chains, office supply
dealers and distributors as we approach and enter the 21st Century''.
In February 1999, the Company entered into an agreement with a
bank for an expanded revolving line of credit. The new line replaces
an earlier borrowing facility, which was scheduled to expire in May
1999. Available borrowings under the new line of credit, which expires
in May 2001 and accrues interest at the prime rate of interest plus
1/2%, are based upon specified percentages of eligible accounts
receivable and inventories. As of February 28, 1999, the Company's
outstanding borrowings under the new $13 million line of credit
approximated $6.6 million.
The Company also announced a number of developments regarding its
HotSheet.com® web portal during the quarter ended February 28, 1999.
HotSheet.com, which can be accessed on the World Wide Web at
www.hotsheet.com, is a unique single-page Internet directory which
provides categorized links to premier web destinations. The new HotSheet Super Search performs simultaneous searches of leading
World Wide Web seach engines, Usenet forums and/or News services, and
presents combined results ranked according to relevance.
The HotSheet.com main page is currently being accessed by Internet users over 2
million times each month. TST/Impreso, Inc. is seeking to engage an
investment banker for the development of strategies to maximize the
value of the Company's web portal. Three investment bankers have been
consulted, and the Company intends to retain and develop the sites
into a valuable corporate asset, or proceed with an initial public
offering or the sale of the sites to an unrelated third party. The
Company will continue to invest in the sites by associating with
vendors which can provide income-generating services.
TST/Impreso, Inc. is a manufacturer and distributor of paper and
film products for commercial and home use in domestic and
international markets. The Company's product lines consist of
continuous computer forms, facsimile paper, cut sheet paper,
transparency films, photo paper and other specialty papers for use in
copying machines, laser printers, ink jet printers, facsimile machines
and overhead projectors. Customers include business forms dealers,
wholesale stationers, office products dealers, paper merchants, office
supply superstores, wholesale clubs, mass merchandisers, and direct
catalog companies. Headquartered in Coppell, Texas (Dallas/Ft. Worth
metroplex), TST/Impreso operates three manufacturing plants and
distributes its products through 47 warehouse locations.
The common stock of TST/Impreso, Inc. is traded on Nasdaq's
National Market System under the symbol ``TSTI''.
This press release may include statements that constitute
``forward-looking'' statements, usually containing the words ``believe'',
``estimate'', ``project'', ``expect'' or similar expressions. These
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements inherently involve risks and uncertainties that could cause
actual results to differ materially from the forward-looking
statements. Factors that would cause or contribute to such differences
include, but are not limited to, continued acceptance of the Company's
products in the marketplace, competitive factors, new products and
technological changes, paper prices and raw material costs, dependence
upon third-party vendors, and other risks detailed in the Company's
periodic report filings with the Securities and Exchange Commission.
By making these forward-looking statements, the Company undertakes no
obligation to update these statements for revisions or changes after
the date of this release.
TST/IMPRESO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
February 28, February 28,
1999 1998
Net Sales $13,750,604 $9,484,374
Cost of Sales 11,534,725 8,769,450
GROSS PROFIT 2,215,879 714,924
Selling, General and Admin. Exp. 1,681,162 1,337,185
Interest Expense 172,859 90,939
Other Income, Net (36,272) (14,280)
Income (Loss) Before Taxes 398,130 (698,920)
Income Tax Expense (Benefit) 138,694 (11,134)
NET INCOME (LOSS) $259,436 $(687,786)
BASIC AND DILUTED
EARNINGS (LOSS) PER SHARE $ 0.05 $ (0.13)
Weighted Avg. Shares Outstanding:
Basic and Diluted 5,292,780 5,292,780
TST/IMPRESO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended
February 28, February 28,
1999 1998
Net Sales $28,022,626 $17,276,380
Cost of Sales 23,738,102 15,472,213
GROSS PROFIT 4,284,524 1,804,167
Selling, General and Admin. Exp. 3,326,098 2,608,947
Interest Expense 354,592 203,738
Other Income, Net (17,051) (45,086)
Income (Loss) Before Taxes 620,885 (963,432)
Income Tax Expense (Benefit) 224,749 (93,395)
NET INCOME (LOSS) $ 396,136 $ (870,037)
BASIC AND DILUTED
EARNINGS (LOSS) PER SHARE $ 0.07 $ (0.16)
Weighted Avg. Shares Outstanding:
Basic and Diluted 5,292,780 5,292,780
Contact:
For further information, please contact:
Marshall Sorokwasz
972/462-0100
or
R. Jerry Falkner, CFA, Investor Relations Counsel
800/377-9893
www.rjfalkner.com