XRIT

[Ramsburg]

Profile: X-Rite, Incorporated develops color management systems. It offers hardware, software, and support solutions that ensure color accuracy and data communication. The company's products include colorimeters, spectrophotometers, densitometers, spectrodensitometers, and sensitometers. It provides color measurement solutions to graphic arts, industrial, retail, and light industries. The company's graphics arts product lines provide solutions for commercial and package printing applications, digital printing and photo processing, photographic, graphic design, and prepress service bureaus in the imaging industries. Its industrial products group provides color measurement solutions for the automotive and process control markets.
Website: http://www.xrite.com
Market Cap: 186M

Trading Idea:
This is mainly a technical pick.
XRIT chart is trading a bearish chart, and is showing some downside momentum for the last few sessions even with the recent market rebound.
XRIT is working its way down 2 main resistances; the short term descending resistance line is now based at $9.20, and the last relative high is located at $9.48 a good spot to put a stop for this position and setup a tight plan for this trade.

Trading Plan:
Short Sell XRIT today at or near the open and then set a buy to cover stop at $9.50

Regards,

[Ramsburg]

Update:
XRIT started yesterday's session with a nice sell off, but mainly because of the overall market rally the stock turnaround in late session and was able to perform a bullish candle, closing in positive territory. Volume was smaller then the previous session which is not a signal of strength.
We expect XRIT to stay below the descending resistance line, and our stop is based near the last relative high.

Trading Plan:
Hold XRIT short with a buy to cover stop @ $9.50

Regards,

[Ramsburg]

Update:
XRIT is still trading below the short term descending resistance, taking in consideration the recent market rebound; this is bearish and shows relative weakness with the market.
We'll hold this short with the same trading plan.

Trading Plan:
Hold XRIT short with a buy to cover stop @ $9.50

Regards,

[Ramsburg]

Update:
A new lowest close since this short term swing began... Let's keep waiting with the same plan.

Trading Plan:
Hold XRIT short with a buy to cover stop @ $9.50

Regards,

[Ramsburg]

Update:
Another new lowest close since this short term swing began... XRIT downside momentum seems to be accelerating, and so far this position looks great. We could now move our stop a bit down, but let's keep wait for developments before we do that...

Trading Plan:
Hold XRIT short with a buy to cover stop @ $9.50

Regards,

[Ramsburg]

Update:
XRIT had another retest to the short term descending resistance; but with lower volume than the previous session. No reasons to worry yet, let's wait with the same plan.

Trading Plan:
Hold XRIT short with a buy to cover stop @ $9.50

Regards,

[Ramsburg]

Update:
XRIT is trading a short term range between $8.50 and $9.00, volume is low and the stock is not showing any strength which is good, but the short term descending resistance is now being tested, therefore we have the chance to decrease the risk on this position and update our stop maintaining the same potential in play.
A breakout of this resistance may lead XRIT to higher prices and a better opportunity for a short entry, so the new trading plan is:

Trading Plan:
Hold XRIT short with a buy to cover stop @ $9.10

Regards,

[nullzero]

I may play this one tomorrow. Nice short btw Ramsburg on SPNC I should of traded that darn hehe.

[Ramsburg]

I may play this one tomorrow. Nice short btw Ramsburg on SPNC I should of traded that darn hehe.

Hi Nullzero,

Thanks, SPNC was a nice short
About XRIT, althought we are still shorted in this stock, have special attention to our stop at $9.10, I think this stock is weak and thats why we still hold this short position, but I'm not enjoying this thight range here at 8.60/8.90.

regards,

[nullzero]

Yeah a little to close to the stop. I havent shorted XRIT as of yet. Been riding your CCJ pick today .

[Ramsburg]

Yeah a little to close to the stop. I havent shorted XRIT as of yet. Been riding your CCJ pick today .

Once again... be carefull, CCJ is radioactive

[Ramsburg]

News: (from Wednesday)
- X-Rite downgraded by Barrington Research

Update:
XRIT is trading sideways for the last few sessions, but managed to breakout the descending resistance. This is not good for our short configuration, but our stop was already downgraded to $9.10 so that's the risk we'll take here.
We are not covering this position right away after this breakout for 2 reasons:
- This breakout was made with XRIT going sideways and not much volume
- $9.00 is still a resistance level
But anyway, we are worried with this position and its quite possible that we get stopped tomorrow.

Trading Plan:
Hold XRIT short with a buy to cover stop @ $9.10

Regards,

[Ramsburg]

Position was stopped @ $9.10 according to our trading plan.

[setravis]

GRAND RAPIDS, Mich., Jan 08, 2009 (BUSINESS WIRE) -- X-Rite, Incorporated (XRIT, Trade) today announced that due to the slowdown in the global economy, the Company will fall short of its fourth quarter and 2008 sales estimate. The Company also announced a significant new profit improvement plan which will better align its 2009 sales expectations and cost structure.

Highlights of today's announcement:

-- Fourth quarter net sales expected in the range of $60 to $61 million and full year 2008 sales expected in the range of $261 to $262 million

-- 2008 adjusted EBITDA (as defined in the Company's credit agreements) estimated in the $57 to $60 million range

-- A new profit improvement plan that will deliver up to $20 million of savings in a challenging economic environment

-- An estimated 2009 restructuring charge of $3.5 million

-- Strong year-end cash position of approximately $47 million

"We have seen an accelerating decline in demand, particularly in the fourth quarter of 2008," said 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 percent versus 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. Key contributors to the new profit improvement plan include:

-- Narrow business focus and rationalize certain business segments

-- Aggressively pursue manufacturing efficiencies, component cost reductions and distribution and logistics efficiencies

-- Implement a reduction in force of approximately 90 jobs (excluding the Viptronic closure announced previously)

-- Execute reduced work schedules and furloughs for selected employee groups

-- Reduce third party services and discretionary spending

-- Reduce executive compensation

-- Suspend the Company's 2009 bonus programs and selected benefit programs

"Cost and working capital management actions taken in 2008 contributed substantially to the level of EBITDA profitability and cash flow," said 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," said 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.

Conference Call

The Company will conduct a live audio webcast on Thursday, January 8, 2009 at 11:00 a.m. EST. The call will be co-hosted by Thomas J. Vacchiano, Jr., the Company's Chief Executive Officer and Bradley J. Freiburger, the Company's Interim Chief Financial Officer. To access this webcast, as well as all future webcasts, refer to the X-Rite corporate Web site at www.xrite.com. Select the Corporate/Investor Relations page and click on the Presentations and Conference Call link for the webcast. In addition, an archived version of the webcast conference call will be available on X-Rite's Web site shortly after the live broadcast.

About X-Rite

X-Rite is the global leader in color science and technology. The Company, which now includes color industry leader Pantone, Inc., develops, manufactures, markets and supports innovative color solutions through measurement systems, software, color standards and services. X-Rite's expertise in inspiring, selecting, measuring, formulating, communicating and matching color helps users get color right the first time and every time, which translates to better quality and reduced costs. X-Rite serves a range of industries, including printing, packaging, photography, graphic design, video, automotive, paints, plastics, textiles, dental and medical. For further information, please visit www.xrite.com.

EBITDA and Non-GAAP Measures

In addition to the results reported in accordance with generally accepted accounting principles (GAAP) within this release, X-Rite may reference certain information that is considered a non-GAAP financial measure. Management believes these measures are useful and relevant to management and investors in their analysis of the Company's underlying business and operating performance. Management also uses this information for operational planning and decision-making purposes. Non-GAAP financial measures should not be considered a substitute for any GAAP measures. Additionally, non-GAAP measures as presented by X-Rite may not be comparable to similarly titled measures reported by other companies.

One specific non-GAAP measure used by X-Rite is "adjusted EBITDA", which is defined as net income adjusted for interest, taxes, depreciation, amortization, acquisition restructuring and other related charges, share based compensation, gains/losses on life insurance, foreign currency, property tax assessment on the former headquarters, and sales of assets. In addition to disclosing results that are determined under US GAAP, the Company also discloses non-GAAP results of operations that exclude certain expenses and charges that are directly related to the Amazys acquisition and Pantone acquisition and related integration and restructuring. Specific non-GAAP captions on the income statements include gross profit from continuing operations, operating expenses (selling and marketing, engineering, general and administrative and certain acquisition-related restructuring and integration expenses), operating income from continuing operations, net income from continuing operations and earnings per share information. The excluded expenses and charges primarily include costs and charges resulting from purchase accounting and integration and restructuring activities associated with the July, 2006 acquisition of Amazys Holding AG and the October, 2007 acquisition of Pantone.

Forward-looking Statements and Disclaimer

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in the forward-looking statements, due to a variety of factors, some of which may be beyond the control of the Company. Factors that could cause such differences include the impact of the Company's defaults under its credit agreements, the Company's ability to sustain increased sales, improve operations and realize cost savings, competitive and general economic conditions, ability to access into new markets, acceptance of the Company's products and other risks described in the Company's filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward looking statements whether as a result of new information, future events or for any other reason.

SOURCE: X-Rite, Incorporated


 
X-Rite, Incorporated   
Brad Freiburger, Interim CFO   
616 803-2143   
[email protected] 

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