Anacomp(R) Appoints New CEO; Previews Third-Quarter Results; Engages Financial Advisors
SAN DIEGO, Aug. 2 /PRNewswire/ -- Anacomp, Inc. (Nasdaq: ANCO), announced today that its Board of Directors has named Edward (Phil) Smoot chief executive officer, effective immediately. Smoot brings more than 30-years experience in the technology sector and in acquisitions, start-ups, and turn-around situations.
Smoot joins Anacomp after almost 20 years with Nelco International, a wholly owned subsidiary of Park Electrochemical Corporation, where he served as president and chief executive officer from 1993 to 1999. In addition, Anacomp said that Donald W. Thurman will be resigning as Chief Operating Officer of Anacomp effective August 31, but will continue to work closely with the company for an additional 60-day transition period.
The company also previewed fiscal third-quarter results and reported that, as anticipated, it will be in violation of certain debt covenants set forth in its senior revolving credit facility. In addition, Anacomp has retained outside financial advisors to assist it in financial restructuring initiatives.
Anacomp announced that, because of its continuing investment in docHarbor(SM) and the decline in its legacy COM businesses, as well as the impact of its previous announcement regarding the closure of its manufacturing operations, fiscal third-quarter performance was disappointing. Revenues for the three months ended June 30 were under $90 million and EBITDA was substantially lower than EBITDA as reported in each of the prior two quarters. The company also announced that it would record additional charges in the third quarter related to the restructuring of its business and to write down the value of certain assets. The company expects to report a net loss that is significantly larger than the losses reported in each of the prior two quarters. The complete earnings release will be issued on August 14.
As the company anticipated in its second quarter report on Form 10-Q filed with the Securities Exchange Commission, it will be in violation of certain of the financial covenants set forth in its senior revolving credit facility. The company has been in communication with its senior lenders and is continuing to work with them to explore alternatives to address the situation.
The company also noted it has retained Donaldson, Lufkin & Jenrette Securities Corporation (DLJ) to advise it regarding a possible debt restructuring and to raise new capital to fund docHarbor, Anacomp's document application service provider (ASP).
Anacomp said that it has also retained Crossroads, Inc., a Newport Beach, California advisory firm to assist in working with its bank group and with other operational restructuring activities.
The company also announced that Lloyd Miller resigned from the Board of Directors effective July 27. Miller is a private investor who joined the Board of Directors earlier in the summer.
"We are clearly facing some serious issues, but we believe we are taking the necessary and appropriate steps, including appointing a new CEO and retaining outside advisors, to address Anacomp's long-term financial health," said Richard D. Jackson, co-chairman of the board of Anacomp. "Phil brings extensive and relevant experience, a record of success, and a fresh perspective to our business. He recognizes both our challenges and opportunities and is working closely with our advisors and the executive management team to move ahead with important actions we need to address as we reposition this company for financial success in the future." |
