Datacolor made a good start to fiscal 2020/21. Demand recovered in all markets and many customers released orders deferred in the previous year due to the pandemic during the first half of fiscal 2020/21. Net sales increased by 5.2% (2.4% in local currency) to USD 36.9 million from USD 35.1 million in the first half of the previous year. The gross margin remained within the targeted range at 64.3% (65.9%). The decrease of 1.6 percentage points is due primarily to shifts in the product mix. The good sales performance and strict cost management led to a successful improvement in profitability. The EBITDA margin remained stable at 10.9% (11.0%) and the EBIT margin increased to 8.6% (8.0%). Operating profit (EBIT) increased by 13.9% to USD 3.2 million (USD 2.8 million). Thanks to an above-average financial result of USD 3.4 million (USD -3.8 million) in the first half of 2020/21, net income of USD 5.3 million (USD -1.5 million) significantly exceeded the comparative figures for the previous year. Earnings per share amounted to USD 32.25 (USD -9.21). The average number of employees in the first half of fiscal 2020/21 was 366.
Strong recovery particularly in China
China was the main driver of the significant recovery in demand in the first half of fiscal 2020/21, with production, sales, and service activities now largely back to normal following the drastic travel and contact restrictions in the previous year. Thanks to its customer-focused international sales and support organization, Datacolor also saw a pleasing recovery in demand in most other markets. Asia and Europe each accounted for 36% of sales in the first half of fiscal 2020/21 (previous year: Asia 36% / Europe 35%). Due to the pandemic, the North and South America region's share declined slightly to 28% (29%).
Swift renewal of the product range
Datacolor is consistently investing in the enhancement of its successful color measurement products: The continuous renewal and expansion of the broad range of products for the textile and apparel industry as well as paint, dye and plastics manufacturers and the consumer market has been further accelerated. In the first half of fiscal 2020/21, Datacolor launched ColorReader Spectro, a high-precision spectrophotometer. It can easily be integrated with customers' existing software or with Datacolor's Paint software and is ideal for paint and hardware stores looking for a cost-effective color measurement solution allowing them to provide custom color matching services to professional contractors. In January 2021, Datacolor then introduced the Spectro 1000/700 series, to ensure uniform color assessments across various instruments and multiple locations throughout the supply chain, enabling customers to improve productivity and workflow efficiency. The new products are experiencing strong customer demand and will make a substantial contribution to sales growth.
Strong balance sheet
At the end of March 2021, Datacolor had total assets of USD 77.2 million (September 30, 2020: USD 65.9 million) and substantial net cash (including financial assets) of USD 46.6 million (September 30, 2020: USD 41.6 million). Datacolor remains debt-free. Shareholders' equity increased to USD 48.3 million (September 30, 2020: USD 45.3 million) and the equity ratio corresponded to 62.5% (September 30, 2020: 68.7%).
Outlook
Assuming that the impact of the pandemic recedes successively and the recovery of the global economy continues, the Board of Directors and Management expect sales and operating profit development in the second half of fiscal 2020/21 within the range of the first half. With its high cash position and still solid equity base, as well as a swift renewal of its product range with high-precision hardware and software products for measuring and communicating color, Datacolor is well equipped to expand its leading position in the international color measurement market and to grow profitably.
Rotkreuz, May 7, 2021
About Datacolor
Datacolor, a global leader in color management solutions, provides software, instruments and services to assure accurate color of materials, products and images. The world's leading brands, manufacturers and creative professionals have used Datacolor's innovative solutions to consistently achieve the right color for 50 years. The company provides sales, service and support in over 100 countries throughout Europe, the Americas and Asia. Industries served include textile and apparel, paint and coatings, automotive, plastics, photography and videography. For more information visit www.datacolor.com.
