Encad is hoping to turn about its disappointing second-quarter results with a cost-cutting programme and the launch of a new low-cost large-format printer.


Second-quarter sales fell 12% to 16.4m ($23.5m) and it made a net loss of 1.6m, which included 740,000 of staff severance costs related to the cutting of 13% of the workforce.
The current economic environment, moving to a one-tier distribution model, and faster-than-expected price erosion in our key markets contributed to our decision to reduce expenses, said president and chief executive Terry Vandewarker.


Encad expects the staff cuts, which took effect across marketing, research and development and sales, to save 3.2m.
But Encad increased sales of its principal product focus, the 50in to 60in printers. Vandewarker said those products produced
the highest gross margins and generated the largest amount of consumables sales.


There was, however, softness in revenues from smaller and older platforms. Encad is addressing that with an aggressively priced 36in 600dpi machine, the NovaJet 736. It will be launched in the UK at the end of the month for a list price of 4,000. Until the end of September the price will include a copy
of Encads Adobe-based Vibrant-Link software RIP.


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