Bell & Howell Company 5215 Old Orchard Road voice 847.470.7100
Skokie, Illinois 60077.1076 fax 847.470.9825
web bellhowell.com
e-mail [email protected]
BELL & HOWELL
Contacts:
Nils A. Johansson Dwight A. Mater
Executive Vice President Vice President, Investor Relations
Phone 847-470-7617 and Business Development
847-470-7111
BELL & HOWELL ANNOUNCES Q3 RESULTS
SKOKIE, Ill., Oct. 17 /PRNewswire/ -- Bell & Howell Company (NYSE: BHW - news)
today announced third quarter net sales of $94 million, up 12% over the prior
year, from continuing operations on a comparable basis. EBITDA (earnings before
interest, taxes, depreciation and amortization) grew 18% for the quarter to $26
million, and earnings per share was 23 cents, before restructuring charges and
the Company's equity interest in bigchalk.com. On a year to date comparable
basis, sales grew 9% to $275 million and EBITDA improved 20% to $72 million.
James Roemer, Bell & Howell Chairman, President and CEO, said, "I am very
pleased with our performance and we are well positioned for a strong finish to
the year."
Reviewing third quarter results for Information & Learning, Roemer continued,
"Sales remained robust with growth of 20%. We continued to enjoy success on a
worldwide basis. XanEdu, our course-centric business, was launched in late July
and I am excited about the early indicators. We are working with many of the
leading e-learning publishers, distance learning and platform providers, and
textbook publishers. For example, we have just signed an agreement with
McGraw-Hill that will integrate XanEdu applications and content into their
textbooks, curriculum products, and websites."
Turning to Publishing Services, Roemer added, "Sales totaled $42 million for the
quarter. In North America, our automobile dealer installed base of electronic
parts catalogs has grown 7% year to date and we continue to gain share.
CollisionLink, our e-commerce application, has received positive feedback from
dealers and manufacturers, and will be launched in early Q1. MotorcycleWorld.com
is currently receiving over 13,000 visitors daily and we expect to be the number
one motorcycle website by the end of the year."
-more-
<PAGE>
BELL & HOWELL REPORTS Q3 RESULTS/PAGE 2
"When looking ahead for the new ProQuest Company," added Roemer, "I expect $225
million in sales for this year in Information and Learning, with nearly $125
million from electronic sales. With respect to Publishing Services, sales are
expected to reach $160 million. In total, on a comparable basis, I see sales
growth of about 10%, with EBITDA growth in the mid-teens, including significant
investments in our Internet initiatives." Although not reflected in the above
projections, the Company also indicated that it will be modifying revenue
recognition for its domestic automotive subscription business, per the
Securities and Exchange Commission's SAB #101. Such adoption will be reflected
in the fourth quarter results.
The Company is continuing to negotiate the sale of its Imaging and Mail &
Messaging businesses and indicated it is also considering two separate
transactions. The Imaging business had sales of $41 million and EBITDA of $5
million for the quarter and is on track to achieve approximately $23 million
EBITDA for the full year. Sales for the quarter for Mail & Messaging were $103
million, and EBITDA of $8 million which the Company indicated put it on course
to achieve approximately $35 million for the full year.
Commenting on the reported 23 cents earnings per share, Roemer indicated, "Sales
and EBITDA growth are more indicative of the health of our continuing operations
during this year of change and restructuring. Earnings per share, on the other
hand, reflects an allocation of interest expense and the current corporate
overhead structure that will be significantly reduced as we conclude the sales
process. Furthermore, reported interest expense increased versus prior year due
to acquisitions and a benefit from interest income on an Internal Revenue
Service refund that reduced net interest expense in 1999."
The Company also announced that Nils Johansson, Chief Financial Officer and EVP,
will move into a role as strategic advisor for the ProQuest Company. His initial
focus will be to complete the sale of the Imaging and Mail & Messaging
businesses while continuing to pursue e-commerce related initiatives. Roemer
commented, "Nils has been a trusted colleague and partner for the last ten years
and I look forward to working closely with him on strategic initiatives ranging
from MotorcycleWorld to bigchalk.com as well as other opportunities."
-more-
<PAGE>
BELL & HOWELL REPORTS Q3 RESULTS/PAGE 2
Alan Aldworth has joined the Company as Chief Financial Officer. "Alan is a
seasoned executive, previously with Tribune Company, who brings exceptional
financial and general business experience to our Company," added Roemer. "I am
confident that Alan will help position us for the future and drive increased
shareholder value."
Concluding, Roemer said, "With respect to our continuing operations, we had a
terrific third quarter and have a busy fourth quarter ahead of us. We anticipate
concluding the sales of Imaging and Mail & Messaging and beginning the
relocation of our corporate headquarters to Ann Arbor. We are optimistic that we
will finish the year with strong performances throughout the Company."
Conference Call
---------------
To participate in a review and question and answer session regarding third
quarter results with Bell & Howell's senior management, call 773-756-4619, using
the password BHW, at 4:00 p.m. (CT) on Tuesday, Oct. 17, 2000. For your
convenience, the call will be taped and archived until Nov. 17, 2000 and can be
accessed by calling 402/530-7685. This conference call may also be accessed over
the Internet through Vcall at http://www.vcall.com . To listen to the live call,
please go to the web site at least fifteen minutes early to register, download,
and install any necessary audio software. For those who cannot listen to the
live broadcast, a replay will be available shortly after the call at Vcall's
website.
Risk Factors
------------
Except for the historical information and discussions contained herein,
statements contained in this release may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements involve a number of risks, uncertainties and other factors,
including without limitation, the cost and availability of intellectual property
from third parties, impact of the change in revenue recognition from the
Securities and Exchange Commission's SAB #101 pertaining to subscription
revenues, decreases in the ability to attract and retain employees for the
existing Bell & Howell, obtain capital, including interest rate risks,
unexpected merger-related effects, timing and market conditions relating to the
sale of the Mail & Messaging Technologies and Imaging businesses as well as
business execution risk and risk of new competitors, and any necessary
regulatory approvals, decreases in funding for Internet access as well as
overall acceptance and usage of the Internet in the education and library
markets, the willingness of parents to purchase educational products for home
use, the availability of free or advertising supported research information on
the Internet, decreases or shifts in mail volumes, rate of acceptance of
electronic-based mailings, including effects of and rate of acceptance of
internet-based solutions, including the automotive business, changes in the
business services market, changes in the automotive industry, and general
economic conditions, all of which could cause actual results to differ
materially, and such other risks as discussed in the company's filings with the
Securities and Exchange Commission.
About Bell & Howell
-------------------
Headquartered in Skokie, Illinois, Bell & Howell Company (NYSE: BHW - news) is a
leading information solutions and services provider to industries worldwide. In
each of its businesses, the company transforms information through software and
services, helping its customers operate more effectively and efficiently.
Additional information on Bell & Howell can be found at www.bellhowell.com .
<PAGE>
BELL & HOWELL COMPANY
SALES AND EARNINGS SUMMARY
(Dollars in Millions, Except Per Share Data)
Third Quarter Year-to-Date
------------------------- --------------------------
2000 1999 Incr 2000 1999 Incr
---- ---- (Decr) ---- ---- (Decr)
------ ------
Net Sales:
Information and
Learning $52.2 $45.7 14% $158.4 $138.6 14%
Publishing
Services 41.9 40.8 3% 116.8 118.8 (2%)
------------------------- --------------------------
Net Sales 94.1 86.5 9% 275.2 257.4 7%
EBITDA (A) 26.0 22.1 18% 72.3 60.1 20%
EBIT (B) 14.2 11.6 22% 34.0 28.1 21%
Net Interest
Expense 5.2 0.6 755% 16.1 7.4 118%
Income Tax Expense 3.6 4.4 (18%) 7.1 8.3 (13%)
------------------------- --------------------------
Earnings from
Continuing
Operations
(C),(D) $5.4 $6.6 (18%) $10.8 $12.4 (13%)
========================= ==========================
Earnings per Common
Share from
Continuing
Operations: (C),(D)
- Basic $0.23 $0.28 (18%) $0.46 $0.53 (13%)
- Diluted 0.23 0.28 (18%) 0.45 0.52 (13%)
Earnings per Common
Share from Continuing
Operations excluding
acquisition
amortization: (C),(D)
- Basic $0.31 $0.34 (9%) $0.69 $0.71 (3%)
- Diluted 0.31 0.34 (9%) 0.69 0.70 (1%)
(A) EBITDA is defined as EBIT plus depreciation and amortization
(B) EBIT is defined as income from continuing operations before
restructuring, interest and taxes
(C) 2000 results include e-commerce expenses of $4.4 million and $10.2
million in Q3 and YTD, respectively.
(D) Excludes restructuring, equity interest in bigchalk.com, discontinued
operations, and cumulative effect of change in accounting principle of:
Third Quarter Year-to-Date
------------- ------------
2000 1999 2000 1999
---- ---- ---- ----
Restructuring Expense
(continuing
operations) $(0.7) $- $(1.5) $-
Earnings (Loss) from
Equity Interest
(bigchalk.com) (5.6) - (14.3) -
Earnings (Loss) from
Discontinued Operations 3.3 6.4 4.0 17.7
Cumulative Effect of
Change in Accounting
Principle - - (5.6) -
Earnings (Loss) per
Common Share:
from Restructuring
(continuing operations)
- Basic/Diluted $(0.03) $- $(0.06) $-
from Equity Interest
(bigchalk.com):
- Basic $(0.24) $- $(0.61) $-
- Diluted (0.24) - (0.60) -
from Discontinued Operations:
- Basic $0.14 $0.27 $0.17 $0.75
- Diluted 0.14 0.26 0.17 0.74
from Cumulative Effect of
Change in Accounting
Principle
- Basic/Diluted $- $- $(0.24) $-
<PAGE>
BELL & HOWELL COMPANY
SALES AND EARNINGS SUMMARY
(Dollars and Shares in Millions)
Third Quarter Year-to-Date
------------------------- --------------------------
2000 1999 Incr 2000 1999 Incr
Net Sales ---- ---- (Decr) ---- ---- (Decr)
--------- ------ ------
Continuing Operations:
Information and
Learning $52.2 $43.5(A) 20% $158.4 $133.2(A) 19%
Publishing
Services 41.9 40.8 3% 116.8 118.8 (2%)
------------------------- --------------------------
Net Sales -
Continuing
Operations $94.1 $84.3 12% $275.2 $252.0 9%
Discontinued Operations
Mail and Messaging
Technologies $102.7 $107.0 (4%) $288.8 $321.9 (10%)
Imaging 41.1 44.8 (8%) 124.5 130.9 (5%)
------------------------- --------------------------
Net Sales -
Discontinued
Operations $143.8 $151.8 (5%) $413.3 $452.8 (9%)
========================== ===========================
EBITDA (B)
----------
Continuing
Operations $26.0 $22.1 18% $72.3 $60.1 20%
Discontinued
Operations 12.8 16.7 (23%) 33.6 48.0 (30%)
EBIT (C)
--------
Continuing
Operations $14.2 $11.6 22% $34.0 $28.1 21%
Discontinued
Operations 10.4 13.2 (21%) 22.4 37.2 (40%)
Other Financial Data
--------------------
Capital
Expenditures $11.7 $12.5 (6%) $35.7 $33.9 5%
Net Debt $540.7 $479.2 13%
Average number of common shares and equivalents outstanding:
Basic 23.7 23.7 23.7 23.5
Diluted 23.7 24.0 23.8 23.9
(A)1999 Information and Learning revenue has been restated to reflect the
consistent application of both:
- SEC Staff Accounting Bulletin 101(issued by the SEC in December 1999 and
adopted by the Company as of the beginning of fiscal 2000) which
modified revenue recognition for new on-line subscriptions, and
- accounting for the results of the Company's kindergarten through twelfth
grade ("K-12") internet business which was combined with the K-12
internet business of Infonautics, Inc. in December 1999 to form
bigchalk.com.
(B)EBITDA is defined as EBIT plus depreciation and amortization
(C)EBIT is defined as income from continuing operations before
restructuring, interest and taxes
