Anacomp Announces 36% Increase in Third-Quarter EBITDA
SAN DIEGO, Aug. 4 /PRNewswire/ -- Anacomp(R), Inc. (Nasdaq: ANCO), a world
leader in digital document-management services, today announced results for
the three- and nine-month periods ended June 30, 1999, that reflect
significantly improved revenues and EBITDA (earnings before interest, other
income, taxes, depreciation, and amortization). All results exclude the
company's former Magnetics Solutions business, which was sold in June 1999.
THIRD-QUARTER RESULTS
Third-quarter revenues totaled $106.3 million, 12% higher than the
$95.0 million reported in the same period a year ago. EBITDA was
$23.1 million, a 36% increase over the $17.0 million earned in the year-ago
period, causing EBITDA as a percentage of revenues to improve to 21.7% from
17.9%. This improvement in EBITDA occurred despite increased spending on
digital-related development, which was more than $2 million higher in the
third quarter compared to the same period a year ago.
Several factors contributed to the improved revenues: a full three months
of business from the acquisition of First Image(R) (the prior period included
only one month of First Image business); the doubling of digital-services
revenues; increased revenues from COM system placements; and significant
growth in third-party maintenance services. The growth in EBITDA percentage
was primarily the result of synergies obtained from the integration of First
Image.
"The third quarter was another effective quarter for us," noted Ralph W.
Koehrer, Anacomp president and chief executive officer. "Most important, we
continued to make substantial progress in growing our digital-services
business, as evidenced by the 100% increase in revenues. Orders for digital
services were very strong once again, in both the U.S. and international
markets, and we signed several new contracts related to Internet-based
document management. By the end of the year, we expect a digital-services
business with an annualized run rate of around $35 million. This business is
gaining momentum."
As a result of the divestiture of its Magnetics Solutions business, the
company has reorganized its internal and public reporting around three primary
lines of business: Document Management Solutions (DMS), which includes analog
and digital services as well as software solutions; Field Services, which
includes COM and third-party maintenance services; and Systems & Supplies,
which includes both COM and digital hardware plus related supplies. In the
third quarter, DMS revenues grew 34% and EBITDA increased 59% over the prior-
year period; Field Services revenues declined slightly, while EBITDA improved
modestly; and Systems & Supplies revenues were 5% lower, while EBITDA
increased by 26%.
"We are very pleased with how our lines of business performed in the third
quarter," continued Koehrer. "DMS, our growth engine for the future, expanded
nicely, in part because of significant growth in our newer digital services.
In Field Services, growing third-party (or non-COM) business offset most of
the continuing decline in COM systems maintenance. In fact, third-party
business accounted for 21% of total Field Services revenues in the third
quarter -- substantially higher than the 12% ratio we saw last year. Finally,
although Systems & Supplies revenues were, as expected, lower than a year ago,
this business met its most important objective of increasing cash generation."
On a pro forma basis, which excludes non-cash reorganization amortization
of $17.1 million, the company would have reported net income from continuing
operations in the third quarter of $1.5 million, with basic and diluted
earnings per share of $0.10. On a pro forma basis in the comparable year-ago
period, which excludes non-cash reorganization amortization of $17.8 million
and a restructuring charge of $4.9 million, the company would have reported
net income from continuing operations of $0.4 million, with basic and diluted
earnings per share of $0.03.
NINE-MONTHS RESULTS
Revenues for the nine months ended June 30, 1999, totaled $333.2 million,
a 20% increase compared with the $278.8 million reported in the same period a
year ago. EBITDA was $71.9 million, a 46% increase over the $49.1 million
earned in the year-ago period. EBITDA as a percentage of revenues improved to
21.6%, compared to 17.6% in the prior period. The current period includes a
full nine months of First Image results.
"Three-fourths of the way through the year, we are on track to meet most
of our significant objectives, particularly related to the execution of our
strategic initiatives," commented Koehrer. "We successfully divested the
Magnetics Solutions business, enabling us to simplify our focus going forward.
We have ramped up our investments in digital research and development, and in
fact our spending on growth initiatives doubled from the first quarter to the
third quarter. And we have optimized operations in our maturing product
lines, which are generating nice cash flows."
On a pro forma basis, which excludes non-cash reorganization amortization
of $53.0 million, the company would have reported net income from continuing
operations for the first nine months of the current fiscal year of
$7.2 million, basic earnings per share of $0.50, and diluted earnings
per share of $0.47. On a pro forma basis in the comparable year-ago period,
which excludes non-cash reorganization amortization of $53.4 million and a
restructuring charge of $4.9 million, the company would have reported net
income from continuing operations of $3.8 million, basic earnings per share of
$0.27, and diluted earnings per share of $0.26.
STOCK REPURCHASE PROGRAM
In other developments, the company announced that it repurchased 160,400
shares of its common stock during the third quarter in accordance with its
previously announced stock buyback program. |
