COSTA MESA, Calif., Oct. 7 /PRNewswire-FirstCall/ -- TROY Group,
Inc. (Pink Sheets: TROY) announced today that financial results for
the third quarter of fiscal 2008, which ended August 31, 2008, have
been posted on the company's web-site at http://www.troygroup.com/.
To access the report, click on About TROY Group then click on
Financials. TROY's financial results are also posted at
http://www.pinksheets.com/. Enter TROY in the symbol field then
click on Financial Report. Revenue for the three months ended
August 31, 2008 decreased to $10.7 million compared to revenue for
the three months ended August 31, 2007 of $11.3 million largely due
to a decline in printer sales partially offset by an increase in
supplies sales. Earnings from continuing operations for the three
months ended August 31, 2008 decreased to $0.08 per share compared
to $0.11 per share for the three months ended August 31, 2007.
Revenue for the nine months ended August 31, 2008 decreased to
$32.5 million compared to revenue for the nine months ended August
31, 2007 of $36.2 million largely due to a decline in printer and
supplies sales. Earnings from continuing operations for the nine
months ended August 31, 2008 decreased to $0.22 per share compared
to $0.36 per share for the nine months ended August 31, 2007. As of
October 6, 2008 a substantial portion of the Company's current
assets consisted of $8.6 million in investments that are auction
rate securities. These auction rate securities consist of preferred
stock of various closed-end mutual funds which have an AAA credit
rating. The auctions for these securities have failed since
February 13, 2008 resulting in the investment being illiquid. There
has been no default on the underlying securities, and investment
income continues to be received in a timely manner while we wait
for a return of the market. The seller of these securities has
announced its intention to repurchase these securities and has
begun the repurchase process. There is no assurance the repurchase
will be completed. On June 23, 2008, the Orange County Water
District filed a lawsuit against 17 companies including TROY and
400 unnamed companies in the Superior Court of the State of
California, Orange County. The complaint asserts claims for these
alleged hazardous releases under the Orange County Water District
Act and the California Superfund Act. The complaint further asserts
common law claims for negligence, trespass and nuisance. The
complaint seeks various forms of legal and equitable relief,
including without limitation unspecified compensatory damages,
attorneys' fees and costs, and declaratory relief. With respect to
these matters, we believe that we have valid defenses to claims
asserted against us and we do not expect the outcome of these
matters to have a material effect on our results of operations or
financial position. Litigation, however, is inherently
unpredictable, and it is possible that the ultimate outcome of
claims asserted against us could adversely impact our results of
operations or financial position. The consolidated balance sheet
and consolidated statement of income are attached to this press
release. Please refer to the quarterly report including financial
statements for more detailed information. TROY GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS Assets August 31, November
30, 2008 2007 (unaudited) Current assets: Cash and cash equivalents
$4,021,000 $782,000 Investment in available-for-sale securities
11,872,000 11,400,000 Accounts receivable, net of allowances 2008
$266,000; 2007 $293,000 4,538,000 6,302,000 Inventories 3,159,000
3,050,000 Prepaid expenses and other 904,000 840,000 Deferred tax
assets 512,000 734,000 Current assets of discontinued operations
held for sale -- 311,000 Total current assets 25,006,000 23,419,000
Equipment and leasehold improvements, net 1,481,000 1,725,000
Goodwill 281,000 281,000 Other assets, including receivables from
stockholders; $1,899,000 in 2008 and $1,903,000 in 2007 3,577,000
3,535,000 Total assets $30,345,000 $28,960,000 Liabilities and
Stockholders' Equity Current liabilities: Accounts payable $
2,379,000 $2,645,000 Accrued expenses 2,043,000 2,085,000 Deferred
revenue 1,323,000 1,286,000 Current liabilities of discontinued
operations held for sale -- 1,976,000 Total current liabilities
5,745,000 7,992,000 Non-current liabilities 1,230,000 881,000 Total
liabilities 6,975,000 8,873,000 Commitments and contingencies
Stockholders' equity: Preferred stock, no par value, authorized
100,000 shares; issued none -- -- Common stock, par value $0.01 per
share; authorized 13,000,000 shares; issued 9,763,235 shares in
2008 and 10,563,701 shares in 2007; outstanding 9,713,235 in 2008
and 9,948,235 in 2007 98,000 106,000 Additional paid-in capital
18,307,000 21,587,000 Retained earnings 5,165,000 1,441,000 Less
cost of treasury stock; 2008 50,000 shares, 2007 615,466 shares
(200,000) (3,047,000) Total stockholders' equity 23,370,000
20,087,000 Total liabilities and stockholders' equity $30,345,000 $
28,960,000 TROY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (unaudited) Three Months Ended Nine Months Ended August 31,
August 31, August 31, August 31, 2008 2007 2008 2007 Net sales
$10,684,000 $11,335,000 $32,504,000 $36,195,000 Cost of goods sold
6,409,000 6,693,000 19,374,000 21,376,000 Gross profit 4,275,000
4,642,000 13,130,000 14,819,000 Operating expenses: Selling,
general and administrative 2,462,000 2,391,000 8,041,000 7,460,000
Research and development 753,000 523,000 2,132,000 1,736,000 Total
operating expenses 3,215,000 2,914,000 10,173,000 9,196,000
Operating income 1,060,000 1,728,000 2,957,000 5,623,000 Interest
income 127,000 177,000 454,000 464,000 Income from continuing
operations before income taxes 1,187,000 1,905,000 3,411,000
6,087,000 Provision for income taxes 438,000 695,000 1,261,000
2,252,000 Income from continuing operations 749,000 1,210,000
2,150,000 3,835,000 Loss from discontinued operations, net of tax
-- (230,000) (73,000) (833,000) Gains on disposal of discontinued
operations, net of tax -- -- 1,647,000 -- Discontinued operations,
net of tax -- (230,000) 1,574,000 (833,000) Net income $ 749,000
$980,000 $3,724,000 $3,002,000 Net income per share: Basic income
from continuing operations $0.08 $0.11 $0.22 $0.36 Basic income
(loss) from discontinued operations -- (0.02) 0.16 (0.08) Basic
income $0.08 $0.09 $0.38 $0.28 Diluted income from continuing
operations $0.08 $0.11 $0.22 $0.36 Diluted income (loss) from
discontinued operations -- (0.02) 0.16 (0.08) Diluted income $0.08
$0.09 $0.38 $0.28 Weighted average shares outstanding: Basic
9,713,000 10,564,000 9,790,000 10,564,000 Diluted 9,749,000
10,631,000 9,899,000 10,595,000 About TROY Group TROY Group, Inc.
("TROY") is a worldwide leader of secure on-demand printing
solutions. TROY solutions manage, secure and simplify end-to-end
enterprise printing environments. TROY offers application software,
security printing hardware and specialized consumables for securely
printing checks, money orders, transcripts, prescriptions and other
important documents. TROY solutions are used by small and medium
size businesses as well as large enterprises and governmental
organizations to manage fraud, operational risk and comply with
government regulations related to protecting information privacy.
As a Gold Solutions Partner to Hewlett Packard, TROY is the only
company in the world authorized by HP to enhance HP printers and
consumables for use in secure printing workflows. Only TROY MICR
and Security printers and HP compatible MICR Toner cartridges are
certified by Hewlett Packard for quality and reliability. We sell
and service our products to major corporations, banks, key
government accounts and distributors worldwide. Visit TROY at
http://www.troygroup.com/ Forward-looking statements of TROY
(statements that are not historical fact) in this news release are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements may be identified by terms such as believe, expect, may,
will, could and should, and the negative of these terms or other
similar expressions. These statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those discussed in the forward-looking statements. These risks
and uncertainties include, but, are not limited to, the ability to
sell investments when needed, the ability to develop new products,
the ability to hire and retain qualified management, technology and
other personnel, the impact of competition from existing and new
technologies and companies and the other factors set forth in our
periodic reports and other documents that we distribute from time
to time which are available in our financial statements under
certain important factors on our website TROYgroup.com or
pinksheets.com. Statements included in this news release are based
upon information known to TROY as of the date of this release, and
TROY assumes no obligation to update information contained in this
news release. For More Information Contact: TROY Group, Inc. 940
South Coast Dr., Suite 200 Costa Mesa, CA 92626 (714) 241-4760
(714) 241-4762 Facsimile http://www.troygroup.com/ Contact: Myra
Erickson, Investor Relations DATASOURCE: TROY Group, Inc. CONTACT:
Myra Erickson, Investor Relations of TROY Group, Inc.,
+1-714-241-4760, fax, +1-714-241-4762 Web site:
http://www.troygroup.com/
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