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XRite Inc. Reports Operating Results (10-Q)

November 10, 2011 | About:
10qk

10qk

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XRite Inc. (XRIT) filed Quarterly Report for the period ended 2011-10-01.

Xrite Inc. has a market cap of $398.3 million; its shares were traded at around $4.63 with a P/E ratio of 17.7 and P/S ratio of 1.8.

Highlight of Business Operations:

The Support Services product line provides professional color training and support worldwide through seminar training, classroom workshops, on-site consulting, technical support and interactive media development. This group also manages the Companys global service repair departments. The products repaired by the service department include the Companys products currently covered by our warranty program as well as those products which have expired warranties. Support Services product line net sales were up $0.8 million or 13.4 percent for the three months ended October 1, 2011 and up $2.6 million or 13.7 percent for the nine months ended October 1, 2011, over the comparable periods of 2010. The Company is continuing to see the strong demand for repair and professional services that it experienced in 2010. New service programs, expanding the installed base through new sales growth in Asia Pacific, and selected price increases contributed to the growth experienced in the three and nine months ended October 1, 2011.

Gross profit for the three months ended October 1, 2011 was $33.9 million or 59.5 percent of sales, compared with $32.7 million or 59.1 percent of sales, for the three months ended October 2, 2010. Gross profit for the nine months ended October 1, 2011 was $106.4 million or 59.4 percent of sales, compared with $98.0 million or 59.9 percent of sales, for the nine months ended October 2, 2010. The year to date decrease in gross margin was primarily due to the impact of currency exchange rate changes with a small negative impact related to customer and product sales mix.

Operating income was $8.4 million and $28.2 million for the three and nine months ended October 1, 2011, as compared to operating income of $6.9 million and $20.0 million in the comparable periods of 2010. Operating income was favorably impacted by the increase in net sales across several product lines. The improved operating income is also a reflection of the Companys profit margins and continued cost management.

For the three months ended October 1, 2011, income tax expense was $1.1 million, compared to a $2.0 million tax benefit for the comparable period in 2010. For the nine months ended October 1, 2011 income tax expense was $0.7 million, compared to a $1.6 million tax benefit for the comparable period in 2010. The income tax expense for both three and nine month periods ended October 1, 2011 is primarily related to earnings in foreign countries. The Companys effective tax rate for the three months ended October 1, 2011 was 12.5 percent compared to 93.8 percent for the three months ended October 2, 2010. For the nine months ended October 1, 2011, the Companys effective tax rate was 12.5 percent compared to 82.4 for nine months ended October 2, 2010.

The components of the Companys investment activities are (i) proceeds from sales of assets, (ii) capital expenditures, and (iii) increase in capitalized software. Net cash used for investing activities during the nine months ended October 1, 2011 and October 2, 2010 was $9.1 million and $7.0 million, respectively.

Read the The complete Report

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