Anacomp(R) Announces Second Quarter 2000 Financial Results Results Reflect Continued Growth In Digital Services
SAN DIEGO, May 11 /PRNewswire/ -- Anacomp, Inc. (Nasdaq: ANCO), a leading
provider of document-management solutions, today announced results for both
the three- and six-month periods ended March 31, 2000. During the quarter,
Anacomp continued to grow its digital services business and to accelerate
customer order activity in docHarbor(SM), the company's document Application
Service Provider (ASP) business unit.
SECOND QUARTER RESULTS
Second quarter revenues were $104.9 million, compared to $112.5 million in
the same period last year. Excluding operating losses (EBITDA basis) of
$6.8 million in docHarbor, EBITDA (earnings before interest, other income,
taxes, depreciation, and amortization) for the second quarter of fiscal 2000
was $21.1 million (20% of revenues), compared to $25.7 million (23% of
revenues) for the year-ago period. The decline in both revenues and EBITDA is
principally the result of the decline in sales of COM and CD systems and
related supplies in the DatagraphiX(R) business unit.
"We made progress in a number of key areas during the quarter," said Lewis
Solomon, co-chairman and acting co-CEO of Anacomp. "docHarbor, our new
document ASP, secured 10 new contracts during the quarter with a total
annualized value of approximately $6.0 million. We have accelerated our
investment in this business, hiring 20 new solutions sales personnel and
building an infrastructure that is unmatched in the industry."
Commenting on the other lines of business, Richard D. Jackson, co-chairman
and acting co-CEO of Anacomp, said, "our Document Solutions business achieved
excellent growth in digital services revenues, which were up almost 40% over
the prior year. In fact, March was our best month ever for digital services
with new orders valued in excess of $5.0 million in annual revenue. We also
made excellent progress with our COM outsource services initiatives during the
quarter, recording new orders valued at approximately $7.0 million in annual
revenue. As a result, the COM services area of the business met our
expectations during the first six months of the fiscal year. We continued to
build our Field Service third-party maintenance business, signing a number of
worldwide agreements, including several that move us into storage area network
maintenance. Overall, docHarbor, Document Solutions, and Field Service are
performing well, executing strategies that will help them grow and better
serve the needs of their customers."
SIX MONTHS RESULTS
Revenues for the six months ending March 31, 2000 totaled $206.7 million,
compared with $226.9 million reported in the same period a year ago.
Excluding the $10.0 million incremental investment in docHarbor (compared to
the same period last year), EBITDA was $43.1 million, compared to the
$50.8 million earned in the year-ago period. EBITDA, excluding the docHarbor
investment, as a percentage of revenues was 21%, compared to 22% in the prior
six months.
BUSINESS UNIT RESULTS
Anacomp's four business units are docHarbor, a document ASP; Document
Solutions, which provides outsource services and software solutions for
document management; Field Service, which provides third-party and Anacomp
equipment maintenance services; and DatagraphiX, which includes COM and CD
hardware systems, related supplies, and contract manufacturing services.
As a document ASP, docHarbor assumes full responsibility for hosting and
managing its customers' vital documents. In the second quarter, docHarbor
recorded revenues of just under $1.0 million. On a cash basis, Anacomp
invested more than $11.0 million in docHarbor personnel, infrastructure and
software development during the quarter. This represents the largest
quarterly investment to date in this business unit. "We are very pleased with
the progress we've made in docHarbor," said Solomon. "We had a strong quarter
for new orders and have entered into contracts with top-tier companies, who
will rely on docHarbor to manage their documents, and we have a pipeline of
excellent prospects. We continue to develop new applications and are focused
on aggressively marketing these offerings through our key vertical markets."
Document Solutions digital revenues increased 39% to $18.3 million
compared to $13.2 million in the year-ago quarter, and accounted for 32% of
total revenues in the current quarter compared to 22% last year. Combined
digital and COM revenues were $56.7 million, compared to $59.4 million in the
same period last year. EBITDA improved to $14.1 million (from $13.1 million a
year ago). As a result, EBITDA as a percentage of revenues grew to 25%,
compared to 22% last year.
Field Service revenues were $15.8 million, compared to $18.5 million a
year ago. Approximately $1.7 million of this decline resulted from the
discontinuance of a segment of the COM maintenance business. EBITDA was
$7.1 million, compared to $8.0 million last year, resulting in EBITDA as a
percentage of revenues of 45% (from 44% a year ago). Third-party maintenance
continued to grow with revenues 27% higher than the year-ago quarter and
representing 30% of total revenues, compared to just 20% a year ago.
DatagraphiX revenues were $31.4 million, compared to $34.5 million last
year. The decline was a result of the $11.4 million drop in revenues for
supplies and for sales and leases of the company's XFP(R) COM system. The
decline in COM systems and supplies sales was partially offset by revenue
growth in contract manufacturing services, which was $7.7 million for the
quarter. However, EBITDA generated by contract manufacturing was insufficient
to offset the decline in DatagraphiX's traditional business, resulting in
EBITDA for the second quarter of $4.2 million, compared to $10.2 million for
the same period last year.
Also during the second quarter, Anacomp incurred a restructuring cost of
$7.0 million related to the previously-announced reorganization of the
company's corporate services and the streamlining of its international
operations in line with the company's business-unit structure. The
$7.0 million charge included $5.4 million in severance and related expenses
and $1.6 million in other expenses such as building leases and costs. When
fully implemented, these initiatives will contribute ongoing operating expense
reductions of approximately $10.0 million annually. |
