Anacomp Announces Fourth-Quarter and Fiscal 1999 Results
- Also Unveils New Internet Services Line of Business -
SAN DIEGO, Dec. 3 /PRNewswire/ -- Anacomp(R), Inc. (Nasdaq: ANCO), a
leading provider of document-management outsource services, today announced
results for the three-month and twelve-month periods ended September 30, 1999,
as well as the formation of a new business line dedicated to Internet
services.
TOTAL COMPANY RESULTS
Fiscal 1999 revenues totaled $442.2 million, 12% higher than the
$394.9 million reported in the previous year. EBITDA was $94.9 million, a
30% increase over the $73.0 million earned a year ago. EBITDA as a percentage
of revenues improved to 21.5% from 18.5%. For the fourth quarter, revenues
were $109.0 million, compared to $116.2 million in the year-ago period, and
EBITDA was $23.0 million, compared to $23.9 million a year ago. All results
exclude the company's former Magnetics Solutions business, which was sold in
June 1999, and include $13.5 million in non-recurring charges primarily
related to revaluations of goodwill and other intangibles.
"1999 was a productive and pivotal year for Anacomp," said Ralph W.
Koehrer, Anacomp's president and chief executive officer. "We successfully
repositioned ourselves to take advantage of opportunities in our core markets.
First, we divested our Magnetics business. Second, we integrated the First
Image services business we acquired in June 1998. Third, we launched our
Internet services business. Fourth, we initiated or made significant progress
in digital solutions and other new activity in each of our businesses. And
finally, we increased the focus on our primary lines of business to position
ourselves better for the future. While doing all of this, we were able to
significantly improve our EBITDA percentage despite increasing our investment
in Internet Document Services(SM), our growth engine for the future."
Koehrer noted that Anacomp ended the year with a strong balance sheet. In
fiscal 1999, the company reduced the principal on its long-term debt by
$25.0 million, repurchased more than 500,000 shares of its common stock, and
finished the year with $11 million in cash. In addition, the company
confirmed that it completed its three-and-a-half year, $267.5 million
reorganization amortization in November, and that as a result the company
expects to resume showing a net profit beginning with the second quarter of
fiscal 2000. In the current quarter, excluding non-cash reorganization
amortization of $15.4 million and non-recurring charges of $13.5 million, pro
forma diluted earnings per share from continuing operations would have been
$0.13, compared to $0.28 in the prior-year quarter. For fiscal 1999, also
excluding non-cash reorganization of $68.4 million and non-recurring charges
of $13.5 million, pro forma diluted earnings per share from continuing
operations would have been $0.61, compared to $0.53 a year ago.
The non-recurring charges of $13.5 million recorded in the fourth quarter
include $10.6 million to reduce the carrying value of certain intangibles and
fixed assets related to prior years' acquisitions. "As we do on a regular
basis, we took a hard look at the value of various assets in the fourth
quarter," explained David Hiatt, Anacomp executive vice president and chief
financial officer. "Based on the speed of our continuing transition to
Internet-based and other digital services, we felt it was prudent to decrease
the value of several of these assets." In addition, the company wrote off
$3.0 million of in-process research and development associated with its
acquisition of Litton Adesso Software in August 1999.
LINE OF BUSINESS RESULTS
Anacomp announced today that it has established a new line of business,
Internet Document Services(SM), to focus exclusively on providing online
document-management outsource services. These services enable Anacomp's
clients to give their personnel and customers quick, secure access to
virtually any type of electronic document including reports, print output, and
scanned images over private networks or the Internet using standard web
browsers.
"Our Internet services, although still relatively new, have been well
received by our customer base and we have signed several significant contracts
in recent months," noted CEO Koehrer. "Revenues began to ramp up in the
fourth quarter, and we exited the year with a annual run rate of about
$4 million. Our acquisition of Adesso Software in August augmented our
software platform for high-volume document presentment and retrieval and we
believe we can best take advantage of the tremendous market opportunity by
forming a separate, dedicated line of business." Koehrer added that Anacomp
is dedicating significant research and development resources in this area, and
that he doesn't expect the business to show a profit in fiscal 2000.
The new Internet business unit joins the company's other three lines of
business: Document Management Solutions (DMS), which includes outsource
services and software solutions for digital and COM-based document management;
Field Services, which provides field maintenance services for Anacomp and
third-party equipment; and DatagraphiX(R), which includes COM and digital
hardware systems, related supplies, and manufacturing services. The line of
business results discussed below have been restated to reflect the new
organization.
DMS revenues were $227.3 million in fiscal 1999, 40% higher than the prior
year, primarily due to the acquisition of First Image last year, the continued
growth of CD and online services, and higher software sales. EBITDA was
$50.1 million, almost double a year ago, and EBITDA as a percentage of
revenues increased from 15.7% to 22.0%, largely as a result of efficiencies
achieved from the First Image integration. "In addition to the efficient
integration of First Image, we are particularly pleased with our progress in
building a significant digital services and software business in Europe," said
Koehrer. "Our acquisition in September 1999 of Bgin Holdings AG of
Switzerland, a leading systems integrator with high-level customer
relationships, complements our existing operations there and makes us one of
the largest European providers of digital document-management solutions."
Field Services revenues were $72.0 million and EBITDA was $30.7 million in
fiscal 1999, compared to $72.5 million and $30.4 million respectively a year
ago, as newer digital and other third-party maintenance business offset
expected declines in the company's COM business. EBITDA as a percentage of
revenues increased slightly from 41.9% to 42.7%. "We continue to execute our
plan of self-renewal and improved efficiencies," noted Koehrer. "In the
fourth quarter, third-party business increased to 24% of total revenues,
compared to 14% in the same period last year. Just as important, this
business continues to generate significant cash flow."
DatagraphiX revenues were $141.4 million for the fiscal year, 12% lower
than last year, because of the continued and expected declines in the sales of
COM systems and related film supplies. EBITDA, however, was $42.3 million,
7% higher than the previous year, augmented by almost $4 million in one-time
events. Said Koehrer, "There's no doubt that the COM portion of this business
unit is mature and that, so far, sales of our digital systems have not been
robust enough to offset that decline. In addition, we saw a general slowdown
in capital sales in the fourth quarter, due we believe to Y2K caution.
However, as with our other business units, the improvement in EBITDA
percentage shows that we increased the return on our investment in this
business." |
