8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): July 25, 2007

Rimage Corporation

(Exact name of Registrant as Specified in its Charter)

Minnesota

(State Or Other Jurisdiction Of Incorporation)

000-00619	41-1577970
(Commission File Number)	(I.R.S. Employer Identification No.)

7725 Washington Avenue South Minneapolis, MN	55439
(Address Of Principal Executive Offices)	(Zip Code)

(952) 944-8144

Registrant’s Telephone Number, Including Area Code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Items under Sections 1 and 3 through 7 are not applicable and therefore omitted.

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Rimage Corporation (the “Company”) hereby furnishes a press release issued on July 25, 2007 disclosing material non-public information regarding its results of operations for the quarter ended June 30, 2007 and hereby furnishes statements of its Chief Executive Officer and Chief Financial Officer made on July 25, 2007 at a telephone conference relating to the quarter ended June 30, 2007 results.

ITEM 8.01 OTHER INFORMATION

As reported in the press release issued on July 25, 2007, the Company’s Board of Directors adopted a stock repurchase program authorizing the repurchase of up to 500,000 shares of the Company’s common stock. Shares will be purchased at prevailing market prices in the open market or in private transactions, subject to market conditions, share price, trading volume and other factors, and the repurchase program may be discontinued at any time. The Company will finance the purchase of the shares using cash on hand. Repurchases of common stock will be in accordance with Rule 10b-18 of the Securities Exchange Act of 1934. The program adopted by the Company’s Board of Directors on July 25, 2007 replaces the repurchase program adopted in May 1999.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit No.	Description
99.1	Press Release issued on July 25, 2007.
99.2	Statements of Bernard P. Aldrich, Chief Executive Officer, and Robert M. Wolf, Chief Financial Officer, at a telephone conference held on July 25, 2007.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

RIMAGE CORPORATION
By:	/s/ Robert M. Wolf
	Robert M. Wolf Chief Financial Officer

Date:  July 26, 2007

EX-99.1

Exhibit 99.1

Rimage Reports Second Quarter Operating Results

500,000 Share Repurchase Plan Announced

Minneapolis, MN—July 25, 2007—Rimage Corporation (Nasdaq: RIMG) today reported sales of $25,486,000 for the second quarter of 2007 ended June 30, up slightly from $25,319,000 in the year-earlier period. Second quarter earnings came to $2,921,000 or $0.28 per diluted share, compared to $3,384,000 or $0.33 per diluted share in the second quarter of 2006. Earnings for the current period were reduced by a pre-tax charge of approximately $500,000 for tooling impairment and an inventory write down related to the low-end 360i product line. Rimage’s strong focus on its mission-critical Producer line, combined with slower sales of the low-end 360i, necessitated this charge.

Rimage also reported that its board of directors has authorized the repurchase of up to 500,000 shares of common stock. This new program replaces the 300,000 share repurchase program the Company adopted in May 1999. Shares will be purchased at prevailing market prices in the open market or in private transactions, subject to market conditions, share price, trading volume and other factors, and the repurchase program may be discontinued at any time. Rimage’s board took this action due to its confidence in the company’s future and desire to further enhance shareholder value.

Rimage’s second quarter performance benefited from significant orders placed by two major national retailers. As previously reported, Rimage received an order in April totaling approximately $8.0 million for its high-end Producer disc publishing systems and related multi-year maintenance contracts. Also, in June, another national retailer placed a $6.5 million order for a storewide rollout of Rimage’s Producer systems, in addition to multi-year maintenance contracts and replacement printer ribbons. Revenues of approximately $4 million were recognized in the second quarter related to the system hardware and consumable supplies of both orders. Revenues from the maintenance component of these orders will be recognized over multi-year periods, starting in this year’s third quarter. The on-demand publishing of customers’ photos on discs is expected to be the initial application for these systems, but this equipment is capable of supporting multiple retail applications, including video and music on-demand. Sales generated by Rimage’s global distribution channel were below planned levels in the second quarter, partly reflecting delayed customer purchasing decisions due to uncertainties regarding the course of the economy.

Bernard P. (Bernie) Aldrich, president and chief executive officer, commented: “We believe our large second quarter retail orders are a further indication that Rimage’s advanced disc publishing technology is becoming the retail industry standard for the on-demand publishing of photos and other digital data on CDs, DVDs and blue laser discs. Beyond the positive near-term impact of our retail business on Rimage’s operating results, our expanding base of retail installations is expected to generate growing volumes of recurring revenues in the form of consumable supplies in future periods.”

He continued: “In the third quarter, we expect to recognize revenues of approximately $8 million for the system hardware and consumable supplies of both retail orders, along with a pro-rated portion of maintenance revenues. Reflecting our large retail backlog, we are forecasting earnings of $0.35 to $0.40 on revenues of $29.0 to $31.0 million for the third quarter of 2007 ending September 30. Sales and earnings at this level would make the third quarter a strong period for Rimage.”

Financial Highlights

Recurring revenues, including sales of printer ribbons and cartridges, parts, blank CD/DVD media and maintenance contracts, increased 5% in the second quarter of 2007 and accounted for 47% of sales, compared to 45% in the second quarter of 2006. The growth of consumable supplies has been generated by strategic efforts to capitalize upon the expansion of Rimage’s installed base of disc publishing systems in retail and other applications.

International sales increased 2% in the second quarter and accounted for 34% of total sales, unchanged from the second quarter of 2006. The European operation generated the majority of international sales, but sales in Asian markets increased 27% in the second quarter, reflecting intensified sales efforts in this region. Currency effects increased worldwide sales by 2% in the second quarter of 2007.

Cash and investments rose to $86.9 million at the end of this year’s second quarter, up from $83.5 million at the end of the first quarter and $77.4 million at December 31, 2006. Stockholders’ equity increased to $104.1 million at June 30, 2007, up from $100.3 million at March 31, 2007 and $95.5 million at December 31, 2006.

About Rimage

Rimage Corporation (www.rimage.com) is the world’s leading provider of disc publishing systems, which are used by businesses to produce discs with customized digital content on an on-demand basis. Rimage’s publishing systems, which span the range from high to low disc production volumes, integrate robotics, software and surface label printers into a complete publishing solution. Rimage is focusing its digital publishing solutions on a set of vertical markets with special needs for customized, on-demand digital information, including photography, medical imaging and financial institutions.

Statements regarding Rimage’s anticipated performance are forward-looking and therefore involve risks and uncertainties, including but not limited to: market conditions, competitive products, changes in technology, conditions in overseas markets that could affect international sales, and other factors set forth in Rimage’s filings with the Securities and Exchange Commission.

#     #     #

For additional information, contact:
Bernard P. (Bernie) Aldrich, CEO	Richard G. Cinquina
Robert M. Wolf, CFO	Equity Market Partners
Rimage Corporation	904/415-1415
952/944-8144

RIMAGE CORPORATION

Selected Consolidated Financial Information

(In thousands except per share data)

(Unaudited)

Consolidated Statement of Operations Information:

	Three months ended June30,				Six months ended June30,
	2007		2006		2007		2006
Revenues	$	25,486	$	25,319	$	47,012	$	47,956
Cost of Revenues		14,088		13,678		25,867		26,641
Gross Profit		11,398		11,641		21,145		21,315
Operating Expenses:
Research and Development		1,441		1,746		3,031		3,322
Selling, General and Administrative		6,284		4,959		12,111		11,083
Total Operating Expenses		7,725		6,705		15,142		14,405
Operating Income		3,673		4,936		6,003		6,910
Other Income, Net		759		637		1,588		1,258
Income Before Income Taxes		4,432		5,573		7,591		8,168
Income Tax Expense		1,511		2,189		2,548		3,150
Net Income		2,921		3,384		5,043		5,018
Net Income Per Basic Share	$	0.29	$	0.35	$	0.50	$	.51
Net Income Per Diluted Share	$	0.28	$	0.33	$	0.48	$	.49
Basic Weighted Average Shares Outstanding		10,105		9,808		10,042		9,747
Diluted Weighted Average Shares Outstanding		10,585		10,298		10,550		10,317

Consolidated Balance Sheet Information:

	Balance As Of
	June30, 2007		December31, 2006
	(Unaudited)
Cash and Marketable Securities	$	56,120	$	38,766
Accounts Receivable		18,446		20,720
Inventories		7,478		6,072
Total Current Assets		87,988		70,116
Property and Equipment, Net		3,536		3,626
Marketable Securities – Non-Current		30,731		38,594
Total Assets		122,450		112,359
Current Liabilities		16,562		16,163
Stockholders’ Equity		104,066		95,476

Conference Call and Replay

Rimage Corporation will review its second quarter operating results in a conference call at 4:30 PM Eastern today. Investors can listen to the conference call at www.rimage.com. Listeners should go to this web site at least 15 minutes before the scheduled start time to download and install any necessary audio software. A replay of the conference call can be heard through August 1, 2007 by dialing 1-303-590-3000 and providing the 11093971 confirmation code.

EX-99.2

Exhibit 99.2

Remarks of Bernard P. Aldrich

Rimage Corporation 2nd Quarter 2007 Conference Call

July 25, 2007

§ Good afternoon and thank you for taking the time to participate in our second quarter earnings conference call.

§ Joining me today is Rob Wolf, our chief financial officer, who will review our recent operating results in some detail.

§ Also with us is Manny Almeida, our chief operating officer, and Dave Suden, our chief technology officer

§ We will be pleased to take your questions at the conclusion of our opening remarks.

§ Since Regulation FD prohibits us from providing any forward-looking statements unless they are simultaneously released to the public, we have provided financial guidance for the third quarter of 2007 in this afternoon’s earnings release.

§ It is important to understand that this guidance is subject to a number of risks that could affect our anticipated performance.

§ These risks are set forth in our filings with the Securities and Exchange Commission, which we urge you to review.

§ Turning now to the subject of this conference call, second quarter sales totaled $25.5 million, up slightly from $25.3 million in the year-earlier period.

§ Second quarter earnings came to $2.9 million or $0.28 per diluted share, compared to $3.4 million or $0.33 per diluted share in the second quarter of 2006.

§ Our earnings for the current period were reduced by a pre-tax charge of approximately $500,000 for tooling impairment and an inventory write down related to the low-end 360i product line.

§ This charge was necessitated by slow sales of the 360i line.

§ Our second quarter performance benefited from significant orders placed by two major national retailers.

§ As previously reported, we received an order in April totaling $8.0 million for our high-end Producer disc publishing systems and related multi-year maintenance service.

§ Then, in June, another national retailer placed a $6.5 million order for a storewide rollout of Rimage’s Producer systems, replacement disc surface printer ribbons and multi-year maintenance service.

§ Of this $14.5 million in retail orders, we recognized revenues of approximately $3.8 million related to the system hardware and consumable supply components of both orders in the second quarter.

§ The maintenance component of these orders will be recognized over a multi-year period, starting in this year’s third quarter.

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§ The on-demand publishing of customers’ photos on discs is expected to be the initial application for these systems, but this equipment is capable of supporting multiple retail applications, including video and music on-demand.

§ We believe these large orders are a further indication that Rimage’s advanced disc publishing technology is becoming the retail industry standard.

§ Beyond the positive near-term impact on Rimage’s operating results, our expanding base of retail installations is expected to generate growing volumes of recurring revenues in the form of consumable supplies in future periods.

§ I also want to note that sales generated by our global distribution channel were below planned levels in the second quarter.

§ We believe customers are delaying purchasing decisions due to uncertainties regarding the course of the economy.

§ Even so, we intend to further strengthen our distribution channel by hiring additional field sales representatives.

§ Now, for the next few minutes, I would like to briefly discuss the share buyback announced in this morning’s release and the reasoning that led our board of directors to their decision.

§ We have realized for some time that it was necessary to more actively manage our growing cash reserves, which are approaching $90 million.

§ However, as a conservatively managed company, we deemed it necessary to approach this subject, like everything else we undertake, with due caution and careful analysis.

§ Toward this end, we have been evaluating various cash management alternatives, including the payment of a dividend, making strategic acquisitions and buying back shares.

§ Regarding a dividend, our studies show that only 7% of all small-cap companies in our general industry sector currently pay a dividend.

§ This probably reflects the fact that the vast majority of small-cap companies in the technology arena do not want to commit significant amounts of cash, on an ongoing basis, to support a truly meaningful quarterly dividend.

§ Neither do we, and, in our view, a quarterly dividend of a few pennies per share is not meaningful or worthwhile to our shareholders.

§ Consequently, we were left with three alternatives...buying back shares or making strategic acquisitions, or both.

§ We have elected to pursue both.

§ Consequently, we announced a 500,000 share repurchase plan in this afternoon’s release.

§ Under this plan, we will buy back Rimage common shares in the open market on an opportunistic basis, depending upon market factors and other considerations.

§ At the same time, we intend to actively pursue strategic acquisitions that can further strengthen or expand our business.

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§ We are looking for opportunities for broadening our existing product lines and services, or adding a new related product line or technology.

§ In either case, any potential acquisition will have to meet three criteria.

§ First, it must possess a general degree of synergy with our current business, enabling the acquisition to leverage our core competencies in software, printing or robotics.

§ Second, the price of any acquisition must be right, meaning that we will not incur an undue degree of earnings dilution.

§ Stated simply, we are looking for strategic opportunities that make long-term financial and business sense that will further enhance shareholder value.

§ Finally, a potential acquisition must have a strong management team willing to work for Rimage’s long-term success.

§ The management team must possess the ability to drive both revenue and profitability at Rimage’s historic levels.

§ At this time, no acquisition is imminent, and we are not working under any schedule or time line.

§ However, we are currently evaluating a number of prospects.

§ Now, I will turn to the financial guidance contained in this afternoon’s release.

§ In the third quarter, we expect to recognize revenues of approximately $8 million for the system hardware and consumable components of both retail orders, together with a pro-rated share of maintenance revenues.

§ Reflecting our large retail backlog, we are forecasting earnings of $0.35 to $0.40 per diluted share on revenues of $29 to $31 million for the third quarter of 2007 ending September 30.

§ Sales and earnings at this level would make the third quarter a strong period for Rimage.

§ Thank you. Now Rob Wolf will review our second quarter results in some detail.

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Remarks of Robert M. Wolf

Rimage Corporation 2nd Quarter 2007 Conference Call

July 25, 2007

§ Thanks, Bernie

§ First, I will run through a few highlights about our second quarter sales.

§ Recurring revenues, including sales of printer ribbons and cartridges, parts, blank CD/DVD media and maintenance contracts, increased 5% in the second quarter of 2007 and accounted for 47% of sales, compared to 45% in the second quarter of 2006.

§ International sales increased 2% in the second quarter and accounted for 34% of total sales, unchanged from the second quarter of 2006.

§ Our European operation generated the majority of international sales, but sales in Asian markets increased 27% in the second quarter, reflecting intensified sales efforts in this region.

§ Currency effects increased worldwide sales by 2% in the second quarter of 2007.

§ Rimage’s gross margin was 45% in this year’s second quarter, unchanged from the first quarter and down slightly from 46% in the second quarter of 2006.

§ Our second quarter gross margin was affected by the previously mentioned charge of approximately $500,000 related to the 360i product line.

§ Our gross margin in the third quarter of 2007 is expected to be at or near the second quarter level.

§ Moving down the P&L, second quarter R&D expense came to $1.4 million, down from $1.6 million in the first quarter and $1.7 million in the year-earlier period.

§ The sequential quarterly and year-over-year reductions in R&D resulted from the completion of an R&D initiative.

§ R&D spending in the third quarter of 2007 is forecasted to be at or near the second quarter level.

§ Selling, general and administrative expense, which includes stock compensation expense, totaled $6.3 million, up from $5.8 million in the first quarter and $5.0 million in the second quarter of 2006.

§ The second quarter increase in SG&A resulted primarily from further strengthening of Rimage’s sales and marketing organization.

§ We believe third quarter SG&A should be at or near the second quarter level.

§ Our second quarter income tax as a percentage of pre-tax income was 34%, compared to 33% in the first quarter and 39% in last year’s second quarter.

§ The year-over-year decline in our second quarter tax rate was due primarily to higher tax-exempt interest income. For this year’s third quarter, we believe our income tax as a percentage of pre-tax income will be at or near the second quarter level due, again, to our strategic decision to invest a substantial portion of our cash reserves in tax-exempt securities.

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§ Turning now to our balance sheet, Rimage is continuing to generate significant cash flows from internal operations.

§ Cash and investments rose to $86.9 million at the end of this year’s second quarter, up from $83.5 million at the end of the first quarter and $77.4 million at December 31, 2006.

§ Finally, stockholders’ equity increased to $104.1 million at June 30, 2007, up from $100.3 million at March 31, 2007 and $95.5 million at December 31, 2006.

§ That wraps up our formal remarks, and now the conference call operator will poll you for any questions.

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