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To: Jenna who wrote (87941)	3/10/2000 3:11:00 PM
From: Jenna	Read Replies (1) \| Respond to of 120523

AGTX at 6 it just filled in a bearish gap down from 2/17 on triple volume than usual. AGTX also had a 10 and 20 day moving average breakout and DMI breakout. The company is obviously not in good shape or it wouldn't be down this much. The question is however how much of a recovery can it expect to see? Applied Graphics Technologies Reports Preliminary Fourth Quarter And Year-End Results - Retains Investment Banker to Assist in Sale of Devon Publishing Group - NEW YORK, Feb. 16 /PRNewswire/ -- Applied Graphics Technologies, Inc. (Nasdaq: AGTX - news), the country's largest provider of outsourced digital media asset management services, today reported that it expects its fourth quarter and year-end 1999 results to be below those reported for the same period last year and below certain analysts' expectations. AGT expects to report a loss of between $0.22 and $0.27 per weighted average common share from operations for the fourth quarter of 1999, before restructuring, impairment, and other charges. For the full year the Company expects to report a loss of between $0.16 and $0.21 per weighted average common share from operations before the fourth quarter restructuring, impairment and other charges. This compares with net income of $0.16 per weighted average common share before restructuring and other charges in the fourth quarter of 1998, and net income of $0.86 per weighted average common share before restructuring and other charges for the twelve months ended December 31, 1998. On a pro forma basis, the Company expects its 1999 earnings before interest, taxes, depreciation, amortization (``EBITDA') and restructuring and other charges to be approximately $3.25 per weighted average common share. AGT said it expects to record restructuring and other charges for the 1999 fourth quarter of at least $12.0 million before income tax effect or at least $ 0.31 per weighted average common share, net of income taxes. These charges are related to the Company's ongoing activities to integrate its operations primarily in the United States and to a lesser extent in the United Kingdom. The Company also announced today that it has retained Chase Securities, Inc. to assist it with the sale of its Devon Publishing Group subsidiary, subject to receipt of an adequate price. The proposed sale is part of the Company's plan to sell non-core assets in order to allow it to focus on improving its core operations, and to use the proceeds therefrom to pay down debt incurred in connection with its acquisition activities of the last few years. As a result of its actions with respect to the potential sale of the Devon Publishing Group and subject to receipt of an adequate bid price, AGT expects to reflect this business as a discontinued operation and record an estimated charge related to the disposal in the fourth quarter of 1999 related to its investment in that operation, the amount of which will be known by mid-March. The Company said there can be no assurance that the sale of the Devon Publishing Group will occur. ``Obviously we are very disappointed in these results,' said Fred Drasner, Chief Executive Officer. ``The loss from operations is due to lower than anticipated results, especially in the Creative Advertising businesses. While the creative side of our business has grown rapidly in the fourth quarter, costs to complete projects seriously impaired the margins we expected to realize on this business. We are taking steps to improve management of product pricing and to better monitor and control costs on jobs. Additionally, while we have made some progress in the integration of our business, we have not accomplished the integration as fast as we had anticipated. This has resulted in our carrying duplicative operating costs longer than we had expected.' ``We are moving ahead with our plan to sell the Devon Publishing Group, which will leave us strategically well-positioned to focus all of our attention on improving and growing our core business. The proceeds from the sale of Devon Publishing Group, if consummated, and certain other non-core assets (most of which are either under contract or have offers outstanding), including the previously announced sale of our Photolab business, will also allow us to continue to pay down our bank debt.' ``While our operating results have been negatively impacted by the factors mentioned above, our ability to generate cash continues to be strong. On a pro forma basis in 1999, earnings before interest, taxes, depreciation, amortization ('EBITDA``) and restructuring and other charges should be approximately $3.25 per weighted average common share. This ability to generate cash, the planned sales of non-core assets and our borrowing capacity under our bank lines should permit us to fund the turnaround of our business as well as begin the expansion of our business planned for in 2000. Additionally, the more rigorous implementation of our integration activities in 2000 should result in improved performance and generate further cash with which we plan to pay down our debt and grow our Company.'