Highcon has put itself in a ‘good position’ ahead of drupa 2024, following a major reorganization and refinancing project initiated in the latter stages of 2023.
In Q4 last year, the digital converting equipment manufacturer established a new business plan with the target to reach positive cash flow and operational profitability in 2024. This saw Highcon’s board of directors approve a new business plan for the remainder of 2023 and for 2024, with the goal of bringing the company to positive cash flow and towards operating profitability in 2024. This included a series of reorganisation activities that will allow it to save more than $10 million on an annual basis and reach cash breakeven during the second half of 2024. Such activities included a: funding round from existing and new shareholders, debt restructuring, temporary shutdown of major R&D projects and the respective reduction in force. In parallel to these measures, the company secured a strategic deal with BHS Corrugated, which is expected to impact on the company’s go-to-market as well as its operational and manufacturing costs.
Alon Bar-Shany, chairman of the company’s board of directors, said, ‘With the combination of these steps Highcon is back on track and with drupa around the corner and the building relations with BHS we are cautiously optimistic about the future.’
Highcon has now published its preliminary financial results for 2023, with $8.4 million in revenues and a loss of $26.9 million, including $5 million related to inventory and fixed assets write offs and impairments. The company ended 2023 with $7 million in systems backlog to be delivered in 2024, some of which was already delivered to customers and will be recognised as revenue in the first quarter of 2024. Recurring revenues (consumables and services) increased by 20% to $4.2 million in 2023 compared with 2022. The company expects such growth to continue in 2024. As such, the company expects significant growth in overall revenues in 2024, in comparison to 2023.
drupa is also expected to have a big impact on Highcon and its future prospects. Its customer base that is rooted in the folding carton and corrugated markets has demonstrated consistent growth in number of jobs by more than 30% each year in the last two years. With both folding carton and corrugated expected to be major talking points at drupa 2024, Highcon sees the ‘Olympics of the print industry’ as an opportunity to ‘ignite its business’. For reference, Highcon secured tens of millions of dollars in purchase orders and letters of intent at the last drupa in 2016.
Simon Lewis, Highcon’s senior vice president of marketing, strategy and business development, said, ‘In anticipation for drupa, we are pleased with the strong focus on folding carton we have seen in the last 12 months with around $8 million in order taking, all of which are in the folding carton space. Coupled with the consistent strong growth of more than 30% per year, demonstrated by our customers in both folding carton and corrugated, we feel this puts us in a good position to approach such a critical event for us, drupa 2024.’
Highcon CEO Shlomo Nimrodi said, ‘2023 was a challenging year for Highcon as the global economy slow down, negatively impacted new order intake. R&D costs increased as the company invested in the development of the new product platform for the corrugated market. While making good progress on this development, which resulted in multiple commitments from new customers to purchase the future product, the impact was that the company faced a cash crunch.’
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