Checkpoint earnings down, guidance restated

Checkpoint Systems Inc. of Thorofare said it earned $14.4 million, or $0.36 per share in the second quarter, compared to $15.1 million, or $0.37 per share, in the same quarter of 2007.

Its revenues were up 20.7 percent to $236.2 million for $195.7 million during the quarter a year ago. "The decline in second quarter gross margins when compared to the same period in 2007 resulted from increasing raw material and energy costs across our business lines and production issues that are being addressed," said chief executive Rob van der Merwe.

The company provides products such as radio frequency identification (RFID) tags that prevent theft and make managing inventories more efficient.

The company says it will undertake a manufacturing and supply chain restructuring program, to be completed in 2010, that is expected to save $6 million a year. Checkpoint said in a release that it expects to incur after-tax restructuring charges in 2008 of about $5 million, or $0.12 per share, and have operating expenditures of about $0.04 to $0.06 per share in the second half of 2008 as it expands capacity.

Checkpoint also restated it full-year guidance: earnings per share of $1.46 to $1.58, down from $1.65 to $1.75 as stated in the prior quarter.

The company said in a release that expectations were affected both by the restructuring effort and by the integration of Massachusetts-based OATSystems Inc., which it acquired earlier this summer.

Company shares were trading this morning at $19.99, down $1.21 (5.71 percent).