Checkpoint Systems Inc. Announces Q4 and 2004 Financials

EAS and CCTV divisions post profits, but label-making division pulls revenues back


Checkpoint Systems Inc., a manufacturer of electronic article surveillance (EAS) systems and CCTV systems for retail environments, has announced the company's financial results for Q4 2004 and for the full year 2004.

The company reported a net loss for the fourth quarter of $29.3 million, equaling a loss $0.78 per diluted share. It was a marked downturn compared to Q4 2003, when the company saw net earnings of $4.5 million equaling $0.13 per diluted share. Excluding impairment and restructuring charges, net of tax, the company reported net income for the fourth quarter 2004 of $0.30 per diluted share, compared to $0.27 per diluted share in Q4 2003.

In this past quarter, Checkpoint recorded a non-cash impairment charge of $45 million net of tax, equal to $1.19 per diluted share. The impairment charge was related "to the impairment of goodwill, intangibles, and fixed assets in the company's labeling services segment."

The results for Q4 also included a restructuring charge reversal of $2 million net of tax, equal to $0.05 per diluted share.

Checkpoint Systems' revenue for the fourth quarter was at $216.4 million, up slightly from $213.9 million for the fourth quarter of 2003.

"We were encouraged with the results from our U.S. electronic article surveillance (EAS) and closed circuit television (CCTV) businesses which delivered revenue growth of 21 percent and 6 percent, respectively," said George Off, Chairman and Chief Executive Officer of Checkpoint in a prepared statement. "The strong growth in our U.S. EAS business was driven by the ongoing rollout of our RF EAS technology with CVS/pharmacy. Our U.S. CCTV business began facing more difficult prior year comparables, but still delivered outstanding results. However, declines in our labeling services segment have masked the company's overall earnings potential."