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“We have seen an accelerating decline in demand, particularly in the fourth quarter of 2008,” says Thomas J. Vacchiano Jr., X-Rite’s CEO. “Large accounts have increasingly delayed projects and smaller end user accounts seemed to be waiting to see what will happen in the economy. Also, we observed that reseller partners took actions to trim their inventories due to the tight credit markets.”
The company announced it expected 2008 net sales to be in the range of $261 to $262 million, which represents a decline of approximately 7.7% vs. 2007 on a pro forma comparable basis. 2008 adjusted EBITDA (as defined by X-Rite’s credit agreements) is estimated to be in the range of $57 to $60 million.
The new profit improvement plan is expected to deliver up to $20 million in 2009 savings, builds on actions taken in April of 2008 and includes accelerating the closure of X-Rite’s Viptronic group in Brixen, Italy announced in November 2008.
“Cost and working capital management actions taken in 2008 contributed substantially to the level of EBITDA profitability and cash flow,” says Bradley J. Freiburger, X-Rite’s interim CFO. “The additional actions we will take in our profit improvement plan for 2009, our strong cash position of approximately $47 million, and our track record of implementing cost control measures make us confident that we will be able to confront the economic climate we currently see this year.”
“Despite current economic challenges, we remain positive about X-Rite’s future,” says Vacchiano. “We have a strong market leadership position, great products and services, and the liquidity to manage through the anticipated downturn.”
The company intends to provide more details regarding the 2008 financial results during its 2008 earnings call, scheduled for March 17, 2009.