Anacomp Announces First Quarter 2000 Financial Results; Company Also Unveils docHarbor Internet Subsidiary
SAN DIEGO, Feb. 14 /PRNewswire/ -- Anacomp(R), Inc.
(Nasdaq: ANCO), a leading provider of document-management solutions, today
announced results for the three-month period ended December 31, 1999 (the
company's first quarter of fiscal 2000), and additionally announced the
creation of docHarbor, Inc., a wholly-owned subsidiary and a dedicated
document Application Service Provider (ASP).
Total Company Results
First quarter revenues were $101.8 million compared to $114.4 million in
the same period last year. Excluding a $4.6 million incremental investment in
the Internet services business (docHarbor), EBITDA for the first quarter of
fiscal 2000 was $21.3 million (21% of revenues), compared to $24.3 million
(21% of revenues) for the year-ago period. On a pro forma basis, excluding
non-cash reorganization amortization of $12.0 million, the company would have
reported a diluted earnings per share loss of $0.22 from continuing
operations, compared to a gain of $0.23 a year ago. All results from last
year exclude the company's former Magnetics Solutions business, which was sold
in June 1999. As previously announced, Anacomp completed its three-and-a-half
year, $267.5 million reorganization amortization in November.
"There are three main themes in our first quarter performance," said Ralph
W. Koehrer, Anacomp's president and chief executive officer. "First, we made
significant progress in developing our Internet services business -- which is
now a wholly-owned subsidiary called docHarbor. The order stream is strong,
and we continue to make substantial investments in growing this business.
Second, our Document Solutions and Field Service business units performed as
expected in executing their self-renewal plans, with both businesses
increasing their digital revenue streams both in absolute dollars and as a
percentage of total revenues. In fact, digital/renewal business was up 57%
over the first quarter of fiscal 1999 and represented 26% of company-wide
revenues in the first quarter, compared to just 15% a year ago. Finally, as
expected, primarily because of the Y2K impact on COM systems placements and
supplies sales, our DatagraphiX(R) business had a very weak first quarter,
with revenues and margins significantly lower than the same period a year ago.
We are continuing our efforts to reshape this business and we continue to
reduce overhead costs."
docHarbor(SM) Information and Results
Anacomp's new subsidiary, docHarbor, an application service provider
(ASP), will focus on delivering documents using web and leading-edge
technology. As part of this initiative, the company has opened a
state-of-the-art e-document center in Northern Virginia, which will house an
Internet Document Services(SM) hosting site and an Executive Briefing Center.
"The formation of docHarbor is a significant step in our transition to
digital and Internet technologies," noted Koehrer. "Our internal software
development activities, coupled with the acquisition of Adesso Software and
enhanced by our innovative Work Smart(SM) process, give us a powerful
e-document solutions set. Through this new subsidiary, we will have the focus
and dedicated resources we need to develop our capabilities even further and
to maximize our strengths in Internet document delivery."
In the first quarter, this line of business recorded revenues of just
under $1 million, which was in line with the company's expectations. Anacomp
is investing significantly in docHarbor in terms of personnel, infrastructure,
and software development. As a result, the company expects docHarbor to
consume cash throughout fiscal year 2000.
"This business has remarkable growth potential," continued Koehrer. "We
have some terrific new orders and a solid pipeline of prospects. By creating
a company dedicated to online document services, we have new opportunities to
leverage the ASP trend, especially in our core financial-services markets, and
we are better positioned to be a true strategic partner to our customers."
More information about docHarbor is available at www.docharbor.net.
Other Business Unit Results
Anacomp's other business units are: Document Solutions, which includes
outsource services and software solutions for digital and COM-based document
management; Field Service, which provides COM and third-party maintenance
services; and DatagraphiX, which includes COM and digital hardware systems,
related supplies, and manufacturing services.
Document Solutions digital revenues increased by 68% to $19.9 million,
compared to $11.8 million in the year-ago quarter, and accounted for 34% of
total revenues in the current quarter compared to 25% last year. Combined
digital and COM revenues were $58.5 million, compared to $58.3 million in the
same period last year. Although revenues were essentially flat, EBITDA
improved to $14.2 million (from $13.0 million a year ago). As a result,
EBITDA as a percentage of revenues grew to 24%, compared to 22% last year.
Field Service revenues were $18.5 million, compared to $18.4 million a
year ago. EBITDA was $8.5 million, compared to $8.1 million last year,
resulting in EBITDA as a percentage of revenues of 46% (from 44% a year ago).
Despite some delays in signing new contracts in the first quarter, which the
company believes was due to Y2K market issues, digital and other third-party
maintenance business was 43% higher than the year-ago quarter and represented
31% of total revenues, compared to just 20% a year ago.
DatagraphiX revenues were $24.0 million, compared to $37.5 million last
year. The decline was a result of lower revenue for both supplies and for
sales and leases of the company's XFP(R) COM system; there were 9 XFP
placements in the first quarter, compared to 28 in the same period a year ago.
While the company believes that a portion of this business was delayed because
of Y2K issues and will be recovered in the future, part of the decrease also
is attributable to the decline in the market for COM systems and supplies.
Additionally, the first quarter results were impacted by a Y2K postponement of
a significant order for manufacturing services, which the company expects to
receive in the second quarter.
Cash at the end of December was $8.4 million. Cash flows from operating
and investing activities, although somewhat down from the first quarter in
fiscal 1999, were above expectations.
Subsequent Events
In the second quarter of fiscal 2000, Anacomp changed its European
organization to align it with the company's four business units.
Additionally, the company reorganized its corporate services as part of its
move to decentralize these functions and it relocated its docHarbor
development and operations units to the new docHarbor facilities near Boston
and Herndon, Virginia. Furthermore, when fully implemented, these initiatives
will contribute ongoing operating expense reductions of approximately $10
million annually, and they also will result in one-time restructuring charges,
primarily during the second and third fiscal quarters, of approximately
$8 million to $10 million. |
