UPPSALA, Sweden, Nov. 7, 2002 (PRIMEZONE) --Pricer (Other OTC:PCRBF):
- Increased net sales of SEK 51.9M (25.6)
- Improved operating result of SEK -33.2M (-59.8)
- Orders received of SEK 45.7M (321.6)
- Liquid funds of SEK 82.5 (109.6)
- Strategic order from Leclerc Scarmor in France
Subsequent events:
Agreement with AWEK Nord C-POS systems, a leading cash system supplier in Germany
OPERATIONS
The third quarter is normally slightly weaker, taking into account a low activity from customers related to the holiday months. Sales were slightly lower than expected due to delayed deliveries to Japan. However, these deliveries were made during October. Orders received amounted to SEK 4.9M (307.1) for the third quarter and to SEK 45.7M (321.6) for the first nine months of 2002. Orders received for the third quarter of 2001 consisted mainly of an order from Pricer's Japanese partner, Ishida, which will be delivered over five years. At the period end, the backlog amounted to SEK 288M (340). The majority of Pricer's orders are made in U.S. Dollar and currency fluctuations affect the value of the backlog in SEK.
The majority of the action programme that was agreed in November 2001 was implemented during the first quarter. The effects of the cost reduction will make an impact gradually during 2002.
During the period, Pricer's French subsidiary received a strategically important order for an ESL system (Electronic Shelf Label) in the Leclerc retail chain in France. It is Pricer's first installation with the new generation of products (R3) in France.
Market
Signals pointing to an increased interest were recorded from most markets and customers, among others Germany, Belgium and the Netherlands. Belgium have emerged as markets in which Pricer have implemented an increased number of installations. The number of installations of the Pricer ESL-system in Japan also shows a satisfactory increase. A further sign that the market is developing is that a large retail chain in the United Kingdom has made a decision to install electronic price labelling.
Net sales and results
Net sales for the quarter amounted to SEK 13.7M (7.8). Net sales were affected by the fact that some of the deliveries to the Japanese market were delayed. The deliveries were made during October. Net sales for the first nine months amounted to SEK 51.9M (25.6), which is a twofold increase compared with the same period in the previous year and more than total sales for 2001.
The gross profit for the third quarter amounted to SEK 2.8M (2.6) and to SEK 8.7M (3.5) for the first nine months of the year. The gross margin for the third quarter was 20 (33) per cent and 17 (14) per cent for the first nine months. The change in the margin for the third quarter of 2002 compared with the third quarter of 2001 can mainly be attributed to the dissolution of a guarantee reserve and currency effects.
Operating expenses for the third quarter fell to SEK 11.2M (23.0) and to SEK 41.9M (63.3) for the first nine months of 2002. One-off costs amounting to SEK 0.3M arose in the third quarter. These related to the new office in Sollentuna into which Pricer's Swedish operations will move during November.
The operating result for the quarter improved compared with 2001 and amounted to SEK -8.4M (-20.4). The operating result for the first nine months of the year was SEK -33.2M (-59.8).
Financial income and expenses for the quarter was SEK 0.4M (-2.4) and SEK -2.4M (-7.0) for the nine months. In the first nine months, financial income and expenses were affected by negative exchange rate differences as a result of the weak USD.
The net result for the quarter was SEK -8.0M (-22.8) and SEK -35.6M (- 66.8) for the first nine months.
Net sales and operating result, SEK M
Jul-Sep 2002 Jul-Sep 2001 Jan-Sep 2002 Jan-Sep
2001
Net sales 13.7 7.8 51.9 25.6
Cost of goods -10.9 -5.2 -43.2 -22.1
sold
Gross result 2.8 2.6 8.7 3.5
Expenses -11.2 -23.0 -41.9 -63.3
Operating -8.4 -20.4 -33.2 -59.8
result
Gross margin, % 20 % 33 % 17 % 14 %
Financial position
The cash flow from current operations was SEK -21.6M (-15.2) for the third quarter and SEK -58.0M (-55.2) for the first nine months of 2002. Liquid funds amounted to SEK 82.5M (109.6). In the first nine months of the year, the cash flow was affected by restructuring costs for the action programme of approximately SEK 8M. Increased sales during the year generated a need for a larger safety inventory.
As previously announced, the share issue implemented during spring 2002 was not paid in full. One of the members of the guarantee consortium has not paid his share although he is liable to do so. Approximately SEK 1.7M remains to be paid. The Board of Directors of Pricer will therefore declare 1,750,000 B shares forfeited. The Swedish Patent and Registration Office will thereafter make a decision about a corresponding write-down of the company's share capital. Pricer intends to take legal action against the guarantor for the non-payment. What has occurred has no significant negative effect on the company's financial position.
Expenses of SEK 0.6M for the divestment of Intactix were charged to the cash flow of investment operations, but not the result, during the first nine months of 2002. Costs of approximately SEK 7M remain for the phasing out of the Intactix Group. These have been entered as a liability. The phasing out of the Intactix Group is taking longer than anticipated. It is not impossible that additional costs could arise.
The tax authority has announced a changed assessment relating to VAT on issue costs of SEK 3.4M, which were declared in 1999 in accordance with the opinion of the National Tax Board applicable at that time. Pricer has appealed against the decision and has not entered the amount as a liability. Should the decision of the highest court be the same as that of the tax authority, Pricer will report the amount directly against equity.
Capital expenditure
Total capital expenditure for the third quarter amounted to SEK 0.3M (0.4) and to SEK 0.9M (0.8) for the first nine months of the year.
Personnel
During first nine months of 2002, the average number of employees amounted to 36 (44) whereas the number at 30 September 2002 amounted to 31 (46).
Parent company
The parent company's net sales for the first nine months amounted to SEK 51.5M (25.2) and the result before appropriations was SEK -35.3M (- 54.1). Capital expenditure amounted to SEK 0.9M (0.8). The parent company's liquid funds amounted to SEK 81.1M (80.6) at 30 September 2002.
Accounting principles
This Interim Report has been prepared in accordance with the Swedish Financial Accounting Standards Council's recommendation RR20 Interim Reports.
Compared with the Annual Report for 2001, the following new recommendations have been applied from 1 January 2002: RR 1:00 Consolidated accounts, RR15 Intangible fixed assets, RR 16 Provisions, contingent liabilities and contingent assets, and RR17 Write-downs. The application of these recommendations has not had any significant impact on the company's results and position.
Subsequent events
Pricer has entered into an agreement with a leading cash system supplier in Germany, AWEK Nord C-POS systems. The agreement means that C-POS systems will sell, install and maintain Pricer's ESL systems in the German market. A separate unit has been formed with representatives of both companies with the aim of securing a customer oriented sales and development process.
Forecast
In line with increasing sales, the action programme is aimed at achieving a faster improvement in the operating result by significantly reducing the fixed costs. It is difficult to assess the continued market trend. However, there are positive signs of a general increase in interest.
The Board of Directors is of the opinion that the payment from the new share issue will meet Pricer's capital requirement until the operations generate a positive cash flow. This is expected to be achieved during the first half of 2004.
This forecast has not been changed from the Interim Report for the second quarter of 2002.
Next reporting date
The Year-End Report for 2002 will be published on 13 February 2003.
this report has not been the subject of examination by the auditors.
For further information, please contact: Pricer AB Jan Forssjo, President +46 18-18 81 00
Pricer AB (publ), founded in 1991 in Uppsala, has the world's leading position as a supplier of electronic display and information systems to the retail industry. Pricer offers electronic information systems that improves significantly customer profitability and productivity.
With the largest product range on the market, Pricer ESL System is installed in more than 300 stores in three continents. Among others, the second largest retailer in Europe and some of the largest retailers in Japan are customers to Pricer. Pricer, in cooperation with highly competent partners, offer a totally integrated solution together with the supplementary products, applications and services.
Pricer AB (publ) is quoted on the O-list of OM Stockholm Exchange. For further information, please visit Pricer's website www.pricer.se . Registration to receive news releases automatically via e-mail can be made through the website.
New address from 18 November 2002: Bergkallavagen 20-22 SE-192 79 SOLLENTUNA Tel: +46 8-505 582 00 Fax:+46 8-505 582 01
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