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Anacomp Announces Improved Second Quarter Results that Reflect Increased Recurring Revenue Streams
SAN DIEGO, May 4 /PRNewswire/ -- Anacomp(R), Inc. (Nasdaq: ANCO), a world
leader in information-management solutions, today announced higher revenues
and cash flow for both the three- and six-month periods ended March 31, 1999
that reflect significantly higher recurring revenues and profits from
services. The results include the company's Magnetics Solutions division;
Anacomp announced last week a definitive agreement to sell this division for
up to $47.5 million in cash, notes, and incentive payments.
SECOND QUARTER RESULTS
Second quarter revenues totaled $138.5 million, an 18% increase over the
$117.6 million reported in the same period a year ago. EBITDA (earnings
before interest, other income, taxes, depreciation, and amortization) was
$27.4 million, a 46% increase over the $18.8 million earned in the year-ago
period. EBITDA as a percentage of revenues improved to 19.8%, compared to
16.0% a year ago. The current quarter includes results of the former First
Image Management Company(R), which was acquired by Anacomp in June 1998.
Adjusting both current and prior-year results to exclude the Magnetics
Solutions business (which for accounting purposes is now treated as a
discontinued operation), second quarter revenues from continuing operations
were $112.5 million, up 23% compared to $91.3 million in the second quarter of
1998. EBITDA from continuing operations was $24.7 million, compared to
$16.7 million in the prior-year period.
Contributing to the improved results were several factors: the integration
of First Image's services business, which significantly boosted recurring COM
services revenues and profits; substantially higher sales of the company's
digital services, which are largely recurring in nature; higher digital
hardware and software sales; and continued solid demand for COM systems and
supplies as well as the company's field services.
"We made good progress in several areas in the second quarter," said Ralph
W. Koehrer, Anacomp president and chief executive officer. "We substantially
completed the integration of First Image, including consolidating our
same-city service centers five months ahead of schedule. I am extremely
pleased with how smoothly the entire First Image acquisition and integration
has progressed. Customer retention has been extremely high, and we will begin
to see net cost savings in the second half of the year. On the digital front,
we continue to expand our service offerings, and the orders recorded in March
were our largest ever. In addition, even though we increased spending on R&D
and marketing by one-third in the second quarter, EBITDA as a percentage of
revenues continued to increase and approached 20%."
"But perhaps the biggest change from a year ago is the percentage of
revenues coming from services -- most of which are recurring -- compared to
sales of equipment, supplies, and other non-service items," continued Koehrer.
"In the second quarter, 53% of our revenues came from services, compared to
just 43% in the same period last year. When the sale of the Magnetics
Solutions division is completed, about two-thirds of our business will be
service-related, reflecting substantial progress toward our goal of making
Anacomp predominantly an outsourcing company. And our plan is to drive the
percentage of the business derived from services even higher as we focus on
growing our digital services revenues."
On a pro forma basis, which excludes non-cash reorganization amortization
of $18.9 million, the company would have reported (including the Magnetics
Solutions division) current quarter net income of $4.0 million, basic earnings
per share of $0.28, and diluted earnings per share of $0.26. On a pro forma
basis in the year-ago period, which excludes non-cash reorganization
amortization of $18.7 million, the company would have reported net income of
$2.9 million, basic earnings per share of $0.21, and diluted earnings per
share of $0.19. Excluding results from the Magnetics Solutions division,
current quarter pro forma net income would have been $2.5 million, basic
earnings per share would have been $0.18, and diluted earnings per share would
have been $0.17. In addition, the company expects to realize a gain before
taxes in excess of $10 million in the third quarter as a result of the
Magnetics sale.
SIX MONTHS RESULTS
Revenues for the six months ending March 31, 1999 totaled $277.5 million,
an 18% increase compared with the $235.4 million reported in the same period a
year ago. EBITDA was $54.2 million, a 43% increase over the $37.8 million
earned in the year-ago period. EBITDA as a percentage of revenues improved to
19.5%, compared to 16.1% in the prior six months. The current period includes
First Image results.
Adjusting both current and prior-year results to exclude the Magnetics
business (which for accounting purposes is now treated as a discontinued
operation), revenues from continuing operations in the current six-month
period were $226.9 million, up 23% compared to $183.8 million in the same
period last year. EBITDA from continuing operations was $49.2 million,
compared to $33.9 million in the year-ago period.
"We are very pleased with our performance in the first half of the year,
particularly the execution of our strategic initiatives to grow our digital
business," commented Koehrer. "Total digital revenues for the period were
more than double the revenues recorded in the first six months of last year,
and total digital services revenues were almost four times greater than the
year-ago period. And we made significant strides in advancing our digital
marketing and development programs."
On a pro forma basis, which excludes non-cash reorganization amortization
of $37.8 million, the company would have reported (including the Magnetics
Solutions division) net income for the first six months of the current fiscal
year of $8.4 million, basic earnings per share of $0.59, and diluted earnings
per share of $0.55. On a pro forma basis in the comparable year-ago period,
which excludes non-cash reorganization amortization of $37.5 million, the
company would have reported net income of $6.3 million, basic earnings per
share of $0.45, and diluted earnings per share of $0.42. Excluding the
Magnetics Solutions division, current period pro forma net income would have
been $5.7 million, basic earnings per share would have been $0.40, and diluted
earnings per share would have been $0.37.
Consistent with the company's previously announced program, the company
repurchased 148,656 shares of its common stock during the second quarter.
Serving thousands of clients around the world, Anacomp manages more
customer documents than anyone else in the world. The company is a leading
provider of COM and CD outsource services, digital and analog information-
management systems, consulting services, and technical support. For more
information, visit Anacomp's web site at www.anacomp.com.
Anacomp media contact: Anacomp analyst contact:
Julie Miller, Nancy Vandeventer,
Public Relations Investor Relations
Phone: (619) 848-5402 Phone: (800) 350-3044
Email: jamiller@anacomp.com Email: nvandeventer@anacomp.com |
