Great qtr:
Anacomp Announces Higher Revenues and Cash Flow in First Quarter
Company Also Announces Stock Buyback Program
and Reelection of Board of Directors
SAN DIEGO, Feb. 10 /PRNewswire/ -- Anacomp(R), Inc. (Nasdaq: ANCO), a
world leader in information management solutions, today announced increased
revenues and EBITDA (earnings before interest, other income, taxes,
depreciation, and amortization) for its first quarter ended December 31, 1998.
The company also announced a stock repurchase program and the reelection of
its Board of Directors.
FIRST QUARTER OVERVIEW
First quarter revenues totaled $138.9 million, an 18% increase compared
with the $117.8 million reported in the same period a year ago. EBITDA was
$26.8 million, a 40% increase over the $19.1 million earned in the year-ago
period. The current quarter includes results for First Image Management
Company(R), which was acquired in June 1998 and accounts for a substantial
part of the quarter's revenue growth.
On a pro forma basis, excluding a non-cash reorganization amortization of
$18.9 million, the company would have reported first quarter net income of
$4.4 million, basic earnings per share of $0.31, and diluted earnings per
share of $0.29. On a pro forma basis in the year-ago period, excluding a
non-cash reorganization amortization of $18.7 million, the company would have
reported net income of $3.4 million, basic earnings per share of $0.24, and
diluted earnings per share of $0.23.
The main factors that contributed to the improved results were the
addition of First Image business; growth of the company's CD services; and the
introduction of newer digital services, both in Europe and the United States.
"We are very pleased with our performance in the first quarter," said Ralph W.
Koehrer, Anacomp president and chief executive officer. "Not only did we
achieve growth over the year-ago period, we also made meaningful progress in
key strategic areas -- including the expansion of our digital business, which
now exceeds a $40 million annualized run rate based on our first quarter
performance. In addition, we continue to grow EBITDA as a percentage of
revenues. At 19.3% in the first quarter, it was higher than the fourth
quarter percentage and substantially greater than the 16.2% recorded in the
year-ago period."
U.S. AND INTERNATIONAL PERFORMANCE
Anacomp expanded its business in the first quarter in both its U.S. and
International (which includes Europe, Latin America, and the Pacific Rim)
markets.
U.S. results were positively affected by substantially increased sales of
digital services and by the addition of services provided to former First
Image customers. Digital services revenues were 91% higher than the same
period a year ago, with most of this growth coming from increased sales of CD
services as well as the development of new digital solutions that address
specific customer needs. The integration of First Image clients, facilities,
and operations progressed smoothly in the quarter, with the company about five
months ahead of schedule in consolidating same-city service centers.
International results (which exclude Magnetics) were significantly
improved, with revenues 18% higher and EBITDA 37% higher than the first
quarter of fiscal 1997. Highlights include the first German sales of the
company's Data/Ware(R) CD system; additional sales of Anacomp's XFP2000(R) COM
system to the French government; and the company's first COLD digital services
contract in Europe, to provide electronic information over a wide-area network
to a leading Swiss supermarket chain.
LINES OF BUSINESS RESULTS
Anacomp's largest line of business, Outsource Services, also achieved the
greatest growth in the first quarter. Revenues were $56.7 million, 9% higher
than the fourth quarter (which included First Image) and 91% higher than the
year-ago period. The growth of CD services, the introduction of new digital
services, and the expansion of both analog and digital services in Europe all
contributed to the increase in revenues.
Revenues from COM Systems and Supplies were $34.4 million, 11% lower than
the first quarter of fiscal 1998. The decline in revenues was mostly due to
the company's exit from the low-margin resale of duplicate film. Revenues
from sales and leases of XFP2000s remained steady, although new unit
placements were 28 in the current quarter, compared to 33 units in the
year-ago period. This unit decrease was expected, since the year-ago period
included eight XFPs shipped to Eastman Kodak(R) Company as part of a
multi-year agreement that concluded last year.
Information Solutions, which comprises digital system sales and related
consulting services, had revenues equivalent to the year-ago period but
significantly less than internal goals and fourth quarter results. The
company believes the disappointing results are due to the long sales cycle for
digital systems as well as the need to move prospects through the sales
process more quickly.
Technical Services revenues were level with the year-earlier period, with
the percentage of non-COM maintenance business increasing to 17% of total
revenues. Magnetics revenues were approximately the same as year-ago results.
"Our first quarter performance gives us optimism on several fronts," noted
Koehrer. "First, the investment in our sales force last year is yielding
results, and we are especially pleased with our enhanced ability to sell
digital services. Second, the integration of First Image is ahead of plan,
with former First Image associates well motivated and the retention of former
First Image clients very high. Finally, we developed and installed a pair of
innovative digital service solutions in the first quarter, and we are moving
quickly to replicate these successes."
STOCK BUYBACK PROGRAM AND DIRECTORS ELECTION
Anacomp also announced today that its Board of Directors has approved a
stock repurchase of up to two percent of the company's outstanding shares of
common stock per quarter over the next three quarters. The program will end
September 30, 1999. Shares may be purchased on the open market from time to
time and at such times and prices as the management of the company may
determine, based on current prices and market conditions. The program is
subject to compliance with the company's credit agreements.
Additionally, Anacomp announced the reelection of its current Board of
Directors at the company's annual shareholders' meeting held on February 8,
1999. |
