Anacomp(R) Announces Third Quarter Financial Results
SAN DIEGO, Aug. 14 /PRNewswire/ -- Anacomp, Inc. (Nasdaq: ANCO), a leader
in document-management services, today reported results for the third quarter
and nine months ended June 30, 2000.
THIRD QUARTER RESULTS
Third quarter revenues were $88.9 million, compared to $106.3 million in
the same period last year. EBITDA (earnings from continuing operations before
interest, taxes, depreciation, and amortization, as well as restructuring and
asset impairment charges) for the third quarter of fiscal 2000 was negative
$7.8 million. Included in these results are a $9.0 million inventory reserve
related to the cessation of the company's manufacturing operations, which it
announced in June, and $1.9 million in severance and other costs related to
the senior management changes also reported previously. Excluding these
charges, EBITDA for the third quarter would have been $3.2 million.
Also during the third quarter, Anacomp incurred additional charges
totaling $14.9 million, consisting of restructuring costs of $7.6 million
related to the reorganization of the company's lines of business, an impaired
asset charge of $5.7 million related to a note payable to the company and to
certain capitalized software development costs, and a $1.6 million loss
related to discontinued operations.
"Our third quarter results reflect the unanticipated acceleration of
trends that have affected Anacomp over the past several quarters as well as
the resulting re-evaluation of our business strategy in several areas," said
Phil Smoot, president and chief executive officer of Anacomp. "The rate of
decline in COM-related revenues in DatagraphiX, Document Solutions, and
Technical Service has increased and our digital services and third-party
maintenance revenues, while growing steadily, have not yet offset the
COM-related decline. The accelerated COM decline, combined with the
investment in docHarbor, resulted in a disappointing quarter."
Smoot noted that the company is making progress within each of its
business units. "In docHarbor, the focus is on rapidly adding new customers
and revenues with special emphasis on the investment services sector where we
are already having good success and where we see a significant market
opportunity. In Document Solutions, we are deploying an expanded suite of
service offerings and anticipate that these offerings will accelerate growth
of digital services in this business by attracting new customers and by
providing an additional choice for our existing mid- and small-size customers.
And in Technical Service, we continue to focus on building our third-party
maintenance business, particularly in the storage and network space," he
added.
With the release of third-quarter results, Anacomp, as it had previously
announced, is in violation of certain of the financial covenants set forth in
its senior revolving credit facility. However, the company has reached an
agreement in principle with its senior lenders, subject to their internal
approval, to amend the current credit facility and to provide the company with
a waiver, valid through late October 2000, with respect to the covenants for
which it is in default. The company will have limited access to its senior
credit facility during this time.
Anacomp also announced that because of its current liquidity position, it
anticipates that it will be unable to make the interest payment on its
subordinated debt due October 1, 2000. As previously announced, Anacomp has
retained Donaldson, Lufkin & Jenrette to advise the company regarding
financial initiatives, including a possible restructuring of its subordinated
debt.
NINE MONTHS RESULTS
Revenues for the nine months totaled $295.6 million, compared with
$333.2 million reported in the same period last year. EBITDA was
$23.3 million, compared to $71.8 million earned in the year-ago period.
Excluding the charges for the third quarter mentioned above, EBITDA for the
nine months would have been $34.2 million.
BUSINESS UNIT RESULTS
Anacomp currently comprises four business units: docHarbor, a document
ASP; Document Solutions, which provides document-management outsource
services; Technical Service, which provides Anacomp and third-party equipment
maintenance; and DatagraphiX, which provides hardware systems and supplies. As
of October 1, DatagraphiX will be fully integrated into the Technical Service
business unit.
docHarbor third-quarter revenues were $1.1 million, up 16% from the second
quarter of fiscal 2000. During the quarter, docHarbor signed a number of new
agreements with leading financial services firms, bringing the total number of
customers served by docHarbor to 15. On a cash basis, Anacomp invested more
than $ 10.5 million in docHarbor during the quarter.
Document Solutions digital revenues worldwide increased 51% to
$17.2 million compared to $11.4 million in the same period last year, and
accounted for 34% of total revenues in the current quarter compared to 21%
last year. Combined digital and COM revenues were $50.6 million, compared to
$53.9 million in the year-ago period. EBITDA decreased to $9.2 million from
$11.7 million a year ago, resulting in EBITDA as a percentage of revenues of
18.2% compared to 21.7% last year.
Technical Service revenues were $15.0 million, compared to $17.5 million a
year ago. Third-party maintenance revenues were 36% higher than the year-ago
quarter and represented 32% of total revenues in the third quarter, compared
to just 20% a year ago. EBITDA was $5.9 million compared to $7.5 million last
year, resulting in EBITDA as a percentage of revenues of 39.4%, down from
42.6% last year. The company continues to sign new agreements with vendors in
the storage and network support space.
DatagraphiX revenues for the third quarter were $22.1 million, compared to
$34.6 million last year. EBITDA for the third quarter was $3.0 million
(excluding the $9.0 million inventory reserve mentioned above), compared to
$11.0 million for the same period last year. Third quarter results reflect
continuing trends that have negatively affected the DatagraphiX business for
the past several quarters and which led to the decision announced in early
June to discontinue manufacturing operations. |
