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Anacomp(R) Restructures DatagraphiX(R) Business Unit; Plans to Discontinue Manufacturing of Hardware Systems and Peripherals
SAN DIEGO, June 1 /PRNewswire/ -- Anacomp, Inc. (Nasdaq: ANCO), a global provider of document-management solutions, today announced that, reflecting its strategic focus on its core services-based businesses, it has restructured the DatagraphiX business unit and will phase out associated manufacturing operations by September 30, 2000.
"The restructuring of the DatagraphiX business is an important step in our transformation into a recurring-revenue, services-based company," said Richard D. Jackson, co-chairman of the Board and acting co-CEO of Anacomp. "This move sharpens our focus on growing our digital document outsource services and our third-party maintenance businesses, and will allow us to devote more attention to building docHarbor(SM), our high-growth document Application Service Provider (ASP) business."
Anacomp's DatagraphiX business comprises three segments: manufacturing, which includes hardware systems and contract manufacturing services; micrographics supplies; and logistics and repair functions. Anacomp is discontinuing manufacturing new systems under its own name as well as contract manufacturing for third parties, but will continue to sell refurbished COM systems, distribute supplies, and operate its repair and logistics functions in support of its installed base of systems including the approximately 400 COM systems operating in its Document Solutions data centers worldwide. The company will fulfill any contractual obligations prior to its exit from manufacturing.
The continuing DatagraphiX supplies and logistics/repair operations will be managed by a new unit, Anacomp Technical Services, which will also be responsible for Anacomp's field maintenance business (formerly named Field Service).
"We will continue to operate the portions of the DatagraphiX business that are most closely aligned with our core service offerings," said Jackson. "The supplies and logistics business are important to the company, and combining that business with our field maintenance business in Anacomp Technical Services allows us to leverage our infrastructure and sales organizations to maximize results in both segments."
Upon completion of the restructuring, Anacomp will have three business units: docHarbor, Anacomp Document Solutions, and Anacomp Technical Services.
The DatagraphiX restructuring is expected to affect approximately 100 employees, with the majority located in Anacomp's headquarters in San Diego. Another 150 employees associated with the supplies and logistics and repair operations will become part of the Technical Services organization. This transition will begin immediately and the company anticipates that it will be largely completed by September 30, 2000.
The company said it expects to incur charges of approximately $1 million in the third quarter as a result of the DatagraphiX restructuring, with the bulk of the charges related to employee severance packages that will be paid in fiscal year 2001. The restructuring is expected to provide initial savings of approximately $2 million annually, and additional potential savings in excess of $3 million annually.
Jackson noted that the DatagraphiX business has had disappointing results over the last two quarters. "The systems component of the business has declined to the point where manufacturing new systems no longer makes financial sense," he said. "We've been moving in this direction for some time, and the recent performance of the manufacturing business convinced us that now's the time to exit the manufacturing of new systems and focus our investment on our service offerings."
Jackson noted that the company is currently talking with several parties who have expressed an interest in acquiring rights to manufacture and sell several of the product lines that Anacomp plans to discontinue.
The company said that it is also exploring alternative uses for the space currently occupied in its San Diego facility by the manufacturing operations. Anacomp's other businesses and its corporate functions will continue to operate from its current locations. |
