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): October 22, 2008

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):

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

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

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

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

Items under Sections 1 and 3 though 8 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 October 22, 2008, disclosing material non-public information regarding its results of operations for the quarter ended September 30, 2008 and hereby furnishes statements of its Chief Executive Officer and Chief Financial Officer made on October 22, 2008 at a telephone conference relating to the quarter ended September 30, 2008 results.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit No.	Description
99.1	Press Release issued on October 22, 2008.
99.2	Statements of Bernard P. Aldrich, Chief Executive Officer, and Robert M. Wolf, Chief Financial Officer, at a telephone conference held on October 22, 2008.

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:  October 22, 2008

EX-99.1

EXHIBIT 99.1

Rimage Reports Third Quarter Sales and Earnings

Minneapolis, MN—October 22, 2008—Rimage Corporation (Nasdaq: RIMG) today reported sales of $25,210,000 for the third quarter of 2008 ended September 30, compared to $33,650,000 in the year-earlier period, which included $8.4 million of retail-related equipment sales, maintenance contracts and replacement printer ribbons. There were no significant equipment sales into the retail market in the current quarter. Third quarter earnings of $4,006,000 or $0.42 per diluted share were down from $6,203,000 or $0.59 per diluted share in the same period of 2007.

Bernard P. (Bernie) Aldrich, president and chief executive officer, commented: “Rimage’s third quarter results exceeded our previously issued guidance for this period due to higher than forecasted sales of digital publishing equipment transacted through our global sales channel, which had a positive impact on Rimage’s profitability for this period. Rimage’s ability to remain solidly profitable amid today’s difficult economic environment stems from several factors. Our distribution partners and field sales representatives, both of which are reporting ongoing interest in our systems across a broad range of applications, have stepped up their efforts to pursue all available opportunities. We are continuing to benefit from our position as the industry-leading provider of CD/DVD/Blu-ray publishing solutions for mission-critical, high-end applications. The $2.0 million of annualized expense reductions that we instituted earlier this year have streamlined our cost structure. Equally important, our strong financial condition is enabling us to operate effectively in a global economy where credit has become difficult to attain. With quarter-ending cash and investments of nearly $91 million and a debt-free balance sheet, we have more than ample resources for supporting our various growth initiatives.”

He continued: “We expect to continue being affected by the lengthened selling cycles for our equipment that has resulted from the cautious attitude of many customers toward capital expenditures. Even so, we expect to remain solidly profitable in the fourth quarter and are forecasting earnings of $0.15 to $0.21 per diluted share on sales of $20 to $22 million for the three-month period ending December 31, 2008. In addition, we remain optimistic about Rimage’s longer-term prospects. We are establishing the foundation required for penetrating several highly promising business services markets. Supported by our strong cash position, we also are moving forward with important enhancements to our disc publishing systems that will keep Rimage at the forefront of the on-demand disc publishing industry.”

Financial Review

Sales of digital publishing systems declined in this year’s third quarter, due to the absence of significant equipment sales into the retail market.

Recurring revenues, including sales of printer ribbons and cartridges, parts, blank CD/DVD media and maintenance contracts, increased 3% in the third quarter of 2008 and accounted for 58% of sales, compared to 43% in the third quarter of 2007. The growth in consumables as a percentage of total sales reflects the fact that equipment accounted for a significantly higher proportion of sales in the third quarter of 2007.

International sales declined 3% in the third quarter and accounted for 35% of total sales, compared to 27% of total sales in the year-earlier period. Rimage’s European and Asian operations are being affected by weakening economic conditions.

Cash and investments totaled $90.6 million at September 30, compared to $93.7 million at the end of the second quarter and $94.2 million at the beginning of 2008. During the third quarter, Rimage used cash of $4.3 million to repurchase approximately 275,000 shares under two 500,000 share buyback authorizations. Approximately 449,000 shares remain available for repurchase under the uncompleted authorization. Cash of $3.9 million also was used to purchase Rimage’s Minneapolis headquarters and manufacturing facility.

About Rimage

Rimage Corporation (www.rimage.com) is the world’s leading provider of recordable CD, DVD and Blu-ray (BD) 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 CD/DVD/BD production volumes, integrate robotics, software and surface label printers into a complete publishing solution. Rimage is focusing its CD/DVD/BD publishing solutions on a set of vertical markets with special needs for customized, on-demand digital information, including retail, medical and business services.

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.

RIMAGE CORPORATION

Selected Consolidated Financial Information

(In thousands except per share data)

(Unaudited)

Consolidated Statements of Income Information:

	Three months ended September 30,				Nine months ended September 30,
	2008		2007		2008		2007
Revenues	$	25,210	$	33,650	$	70,645	$	80,662
Cost of revenues		13,233		17,238		39,077		43,105
Gross profit		11,977		16,412		31,568		37,557
Operating expenses:
Research and development		1,227		1,592		4,091		4,622
Selling, general and administrative		5,225		6,180		17,535		18,292
Total operating expenses		6,452		7,772		21,626		22,914
Operating income		5,525		8,640		9,942		14,643
Other income, net		711		1,021		2,080		2,609
Income before income taxes		6,236		9,661		12,022		17,252
Income tax expense		2,230		3,458		4,303		6,006
Net income		4,006		6,203		7,719		11,246
Net income per basic share	$	0.42	$	0.63	$	.80	$	1.13
Net income per diluted share	$	0.42	$	0.59	$	.79	$	1.07
Basic weighted averageshares outstanding		9,465		9,890		9,629		9,992
Diluted weighted averageshares outstanding		9,595		10,302		9,820		10,466

Consolidated Balance Sheet Information:

	Balance as of
	September 30, 2008		December 31, 2007
Cash and marketable securities	$	56,621	$	59,021
Receivables		15,228		14,447
Inventories		5,914		8,075
Total current assets		80,461		84,771
Property and equipment, net		6,465		3,206
Marketable securities – non-current		33,992		35,201
Total assets		123,101		125,096
Current liabilities		14,113		17,882
Long-term liabilities		2,380		2,153
Stockholders’ equity		106,608		105,061

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

EX-99.2

EXHIBIT 99.2

Remarks of Bernard P. Aldrich

Rimage Corporation 3^rd Quarter FY 2008 Conference Call

October 22, 2008

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

§ Joining me today is Rob Wolf, our chief financial officer, who will review our recent operating results following my opening remarks.

§ Also with us is Manny Almeida, our executive vice president of sales and marketing.

§ We will be pleased to take your questions at the conclusion of our 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 fourth quarter of 2008 in this morning’s 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, our third quarter sales totaled $25.2 million.

§ This compares to $33.7 million in the third quarter of 2007, which included $8.4 million of retail-related equipment sales, maintenance contracts and replacement printer ribbons.

§ There were no significant retail-related equipment sales in the current quarter.

§ Third quarter earnings of $4.0 million or $0.42 per diluted share were down from $6.2 million or $0.59 per diluted share in the same period of 2007.

§ Our third quarter sales and earnings exceeded our previously issued guidance for this period due primarily to higher than forecasted sales of digital publishing equipment transacted through our global sales channel.

§ As a result, our gross margin was higher than anticipated, which had a positive impact on Rimage’s profitability for this period.

§ With that said, the fact remains that economic conditions are continuing to affect our business.

§ Many customers have adopted a cautious attitude toward capital expenditures, which has resulted in lengthened selling cycles for our equipment.

§ It is impossible for us to forecast when market conditions will start to materially strengthen, but it is important to point out that Rimage has remained profitable in 2008 with year-to-date earnings of $0.79 per diluted share.

§ Our ability to remain solidly profitable despite the challenging global economy stems from several key factors.

§ For instance, our third quarter net margin of 16% demonstrates that a significant portion of every sales dollar flows through to our bottom line.

§ There are several main reasons for this.

§ Rimage is not a capital-intensive business.

§ In addition, we have significantly streamlined our cost structure through the annualized $2.0 million of expense reductions that we instituted earlier this year.

§ Moreover, since we are virtually debt-free, our operating income is not materially eroded by interest expense.

§ Our sales and earnings also have benefited from several other factors.

§ First, we are strengthening our distribution channel.

§ Among other things, we are carefully reviewing each of our distribution partners as we explore new ways to expand the penetration of our full line of products into our customer base.

§ Second, we are continuing to benefit from our position as the industry-leading provider of CD/DVD/Blu-ray publishing solutions for mission-critical, high-end applications.

§ Supported by this position, our field sales force and distribution partners are continuing to report customer interest in our optical technology across a broad range of applications.

§ Third, our sales representatives and distributors have stepped up their efforts to pursue all available opportunities.

§ Fourth, and equally important, Rimage’s strong financial condition is enabling us to operate effectively in today’s challenging global economy.

§ We ended the third quarter with cash and investments of nearly $91 million, working capital of $66 million and a virtually debt-free balance sheet.

§ As a result, we have more than ample resources for supporting our various growth initiatives without recourse to capital markets.

§ Turning to the financial guidance contained in this morning’s release, we expect to remain solidly profitable in the fourth quarter ending December 31 with forecasted earnings of $0.15 to $0.21 per diluted share on sales of $20 to $22 million.

§ At this level, our full-year earnings would be in the range of $0.94 to $1.00 per diluted share.

§ Longer-term, we remain optimistic about Rimage’s future.

§ We are establishing the foundation required for penetrating several highly promising business services markets, including media and broadcasting, law enforcement, education, government, software and professional services.

§ Taken as a whole, these business service applications represent highly promising growth opportunities.

§ And, supported by our strong cash position, we are moving forward with the development of next-generation as well as upgraded products that will keep Rimage at the forefront of the on-demand disc publishing industry.

§ All in all, we have every reason to believe that Rimage’s future is promising.

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

Remarks of Robert M. Wolf

Rimage Corporation 3^rd Quarter FY 2008 Conference Call

October 22, 2008

§ Thanks, Bernie

§ First, I will run through some third quarter sales highlights.

§ Sales of digital publishing equipment declined 46% in the third quarter of 2008 and accounted for 42% of total sales, compared to 57% in the third quarter of 2007.

§ The absence of significant retail-related equipment sales in this year’s third quarter was primarily responsible for the year-over-year decline in this revenue category.

§ Recurring revenues, including sales of printer ribbons and cartridges, parts, blank CD/DVD media and maintenance contracts, increased 3% in the third quarter and accounted for 58% of sales, compared to 43% in the third quarter of 2007.

§ Consumables have accounted for a significantly larger portion of our sales mix during 2008 due to the economy-related slowdown in sales of disc publishing hardware, in addition to the expansion of our base of retail installations that occurred in 2007.

§ International sales declined 3% in the third quarter and accounted for 35% of total sales, compared to 27% in the year-earlier period.

§ Our lower international sales reflect the impact of weakening economic conditions on our European and Asian operations.

§ Rimage’s gross margin was 48% in the third quarter, up from 44% in the second quarter and down modestly from 49% in the third quarter of 2007.

§ Our third quarter gross margin was higher than originally anticipated due to better-than-forecasted sales of disc publishing hardware.

§ At this time, we believe our gross margin for the fourth quarter will be in the low to mid-40% range.

§ Moving down the P&L, our overall cost structure in the third quarter benefited from the $2.0 million of annualized expense reductions that we instituted in May.

§ Third quarter R&D expense came to $1.2 million, down from $1.5 million in the second quarter and $1.6 million in last year’s third quarter.

§ Despite the reduced level of R&D expense, we are moving forward with the development of next-generation products, in addition to important enhancements to our current product line.

§ R&D spending in the fourth quarter of 2008 is forecasted to be 5% to 10% above the third quarter level.

§ Selling, general and administrative expense totaled $5.2 million in the third quarter, down from $5.7 million in this year’s second quarter and $6.2 million in the third quarter of 2007.

§ SG&A is expected to be 5% to 10% above the third quarter level due to several non-recurring items.

§ Our operating margin rose to 22% in this year’s third quarter, from 12% in the second quarter, but was down from 26% in the third quarter of 2007.

§ We were taxed at an effective rate of 36% in the third quarter and believe our effective income tax rate for 2008 will be in the range of 35% to 37%.

§ Turning now to our balance sheet, cash and investments totaled $90.6 million at the end of the third quarter, compared to $93.7 million at the end of the second quarter and $94.2 million at the beginning of 2008.

§ During the quarter, cash of $4.3 million was used to repurchase approximately 275,000 Rimage shares under two 500,000 share buyback authorizations.

§ And, during the first nine months of 2008, we used cash of $9.3 million to repurchase a total of 551,000 shares.

§ Approximately 449,000 shares remain available for repurchase under our one uncompleted authorization.

§ In addition, we used cash of $3.9 million in this year’s third quarter to purchase Rimage’s Minneapolis headquarters and manufacturing facility.

§ Stockholders’ equity came to $106.6 million at the end of the third quarter, compared to $107.1 million at the end of the second quarter and $105.1 million at the end of 2007.

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