CGII earnings out.. 156% increase..
Wednesday February 9, 4:16 pm Eastern Time
Company Press Release
Cunningham Graphics International Announces Record Fourth Quarter and Year-End Results
Posts Seventh Consecutive Quarter of Record Sales and Earnings
JERSEY CITY, N.J.--(BUSINESS WIRE)--Feb. 9, 2000-- Fourth Quarter Revenues Increase 156%, EPS $0.39 vs. $0.24
Cunningham Graphics International, Inc. (NASDAQ NM: CGII - news) today announced record financial results for the fourth quarter and year ended December 31, 1999.
For the fourth quarter ended December 31, 1999, revenues increased 156% to $38.5 million compared to $15.0 million in the fourth quarter of 1998. The Company achieved internal revenue growth (excluding revenues from acquisitions) of 50% compared to last year's fourth quarter. Net income for the fourth quarter increased 73% to $2.2 million, or $0.39 per diluted share, compared to a net income of $1.3 million, or $0.24 per diluted share, for the quarter ended December 31, 1998.
For the year ended December 31, 1999, revenues increased 108% to $110.7 million compared to $53.1 million for 1998. The Company achieved internal revenue growth of 31% compared to last year. Before non-recurring moving related costs, net income for the year increased 94% to $7.1 million, or $1.25 per diluted share, compared to pro forma net income of $3.7 million, or $0.80 per diluted share, for 1998.
Cunningham Graphics International has completed the relocation of its New Jersey and certain Manhattan operations to a state-of-the-art 167,000 square foot facility in Jersey City, NJ. The Company provided $597,000 or $0.11 per diluted share after taxes during the second and third quarters for non-recurring costs related to the relocation. Net income for the year including the non-recurring moving costs was $6.5 million, or $1.15 per diluted share.
During 1999, Cunningham Graphics International successfully completed the acquisition and integration of 10 commercial printers. The acquisitions have significantly expanded the Company's geographical operations and diversified its client base and all have been accreative to earnings. In addition to the acquisitions of commercial printers, the Company also successfully acquired and integrated the in-house printing operations of Merrill Lynch and PaineWebber and assimilated five digital printing centers of The McGraw-Hill Companies. Cunningham Graphics International adds value to acquired graphic communication companies by increasing revenues through geographic cross-selling, by improving operating rates, upgrading technology and realizing purchasing economies for materials, thereby significantly reducing document production costs.
In order to expand the capabilities of the Company's global digital on-demand network, World Research Link(TM), Cunningham Graphics International recently formed a strategic alliance with leading printers in Australia and Japan. Through the strategic alliance, Cunningham Graphics International significantly widens its presence in the Asia/Pacific region.
Michael R. Cunningham, Chairman and Chief Executive Officer, commented, ``By any measure 1999 was a very successful year for Cunningham Graphics International. We've successfully completed numerous acquisitions, achieved significant internal growth, improved operating efficiency, increased quality, strengthened our technological capabilities and expanded our global reach all while posting record sales and earnings. We remain committed to increasing shareholder value and are very optimistic about the growth prospects for the Company.'
L.J. Baillargeon, Chief Financial Officer, commented, ``We are very pleased with the financial results, especially the strong internal growth and the significant margin improvement. Gross margins for the year increased 340 basis points to 32.5% versus 29.1% in 1998 due to the inclusion of higher margin business through acquisitions and increased efficiencies at existing locations. We've also focused on controlling selling, general and administrative expenses as the business grows and expect margins to continue to improve as we increase revenues and achieve better absorption of overhead costs.'
Recognized as one of the fastest growing companies in the U.S. printing industry, Cunningham Graphics International is a leader in the graphic communications industry, providing time-sensitive graphic communications services and outsourcing solutions to a blue chip client base. With corporate office operations headquartered in Jersey City, NJ, the Company currently operates in select international markets. The Company's services include digital communications, document management, offset and digital printing, data output, bindery, fulfillment and mailing services.
This press release may contain forward-looking statements, which involve known and unknown risks, uncertainties or other factors that could cause actual results to materially differ from the results, performance or other expectations implied by these forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, continued demand for its services, the availability of raw materials, the impact of competitive services and pricing, risks in technology development, changing economic conditions and other risk factors detailed in the Company's filings with the Securities and Exchange Commission.
CUNNINGHAM GRAPHICS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousand, except shares and per share amounts)
(Unaudited)
Three Months Ended For the Year Ended
December 31, December 31,
1999 1998 1999 1998
Net Sales $38,472 $15,025 $110,671 $ 53,146
Operating expenses:
Costs of production 26,508 10,082 74,707 37,694
Selling, general &
administration 5,782 2,218 17,921 7,783
Non-recurring moving
costs - - 1,017 -
Depreciation &
amortization 1,778 415 4,873 1,252
------ ------ ------ ------
34,068 12,715 98,518 46,729
Income from operations 4,404 2,310 12,153 6,417
Interest income
(expense) (1,014) 76 (2,052) 75
Other income (expense) 26 (79) 195 5
Income before income
taxes 3,416 2,307 10,296 6,497
Provision for income
taxes 1,176 1,009 3,747 2,489
Net income $ 2,240 $ 1,298 $ 6,549 $ 4,008
Earnings per common
share:
Basic $ 0.39 $ 0.25 $ 1.15
Diluted $ 0.39 $ 0.24 $ 1.15
Weighted average
number of common
shares:
Basic 5,715,713 5,301,630 5,692,456
Diluted 5,715,713 5,329,681 5,718,371
Pro Forma Data
Income before income
taxes $ 6,497
Pro forma provision
for income taxes 2,809
Pro forma net income $ 3,688
Pro forma earning
per common share:
Basic $ 0.80
Diluted $ 0.80
Pro forma weighted
average number of
common shares:
Basic 4,587,941
Diluted 4,637,024
Net income $ 2,240 $ 1,298 $ 6,549 $ 4,008
Non-recurring
moving costs - 1,017 -
Tax benefits from
non-recurring
moving costs - (420) -
Pro forma provision
for income taxes - - - (320)
Net income excluding
non-recurring
moving costs $ 2,240 $ 1,298 $ 7,146 $ 3,688
Diluted earnings per
share excluding
non-recurring
moving costs $ 0.39 $ 0.24 $ 1.25 $ 0.80
Weighted average
shares
outstanding 5,715,713 5,329,681 5,718,371 4,637,024
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