<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-8328
ANACOMP, INC.
Indiana 35-1144230
11550 North Meridian Street
Post Office Box 40888
Indianapolis, Indiana 46240
Registrant's Telephone Number is (317) 844-9666
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
The number of shares outstanding of the Common Stock of the registrant on March
31, 1995, the close of the period covered by this report, was 46,177,546.
<PAGE> 2
ANACOMP, INC. AND SUBSIDIARIES
Index
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements:
<S> <C>
Condensed Consolidated Balance Sheets
June 30, 1995 and September 30, 1994 .................... 2
Condensed Consolidated Statements of Operations
Three and Nine Months Ended June 30, 1995 and 1994....... 3
Condensed Consolidated Statements of Cash Flows
Nine Months Ended June 30, 1995 and 1994................. 4
Condensed Consolidated Statements of Stockholders'
Equity (Deficit) Nine Months Ended June 30, 1995
and 1994................................................ 5
Notes to Condensed Consolidated Financial Statements....... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ............. 11
PART II. OTHER INFORMATION
Item 3. Defaults Upon Senior Securities............................ 20
Item 6. Exhibits and Reports on Form 8-K........................... 20
SIGNATURES ............................................................ 21
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
Anacomp, Inc., and Subsidiaries
<TABLE>
<CAPTION>
(Dollars in thousands, June 30, Sept. 30,
except per share amounts) 1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . $ 6,210 $ 19,871
Accounts and notes receivable, less allowances for
doubtful accounts of $4,214 and $3,550, respectively . . . 107,528 117,441
Current portion of long-term receivables . . . . . . . . . 6,927 8,021
Inventories . . . . . . . . . . . . . . . . . . . . . . . . 71,393 63,375
Prepaid expenses and other. . . . . . . . . . . . . . . . . 6,904 5,421
Total current assets . . . . . . . . . . . . . . . . . . . . 198,962 214,129
Property and equipment, at cost less
accumulated depreciation and amortization . . . . . . . . . 54,498 66,769
Long-term receivables, net of current portion . . . . . . . . 16,588 16,383
Excess of purchase price over net assets of businesses
acquired and other intangibles, net. . . . . . . . . . . . . 163,634 279,607
Deferred tax asset, net of valuation allowance of $57,000 . . 29,000 29,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 34,500 52,751
$497,182 $658,639
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (Deficit)
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . $390,454 $ 45,222
Accounts payable . . . . . . . . . . . . . . . . . . . . . 72,888 82,790
Accrued compensation, benefits and withholdings . . . . . . 12,978 16,573
Accrued income taxes . . . . . . . . . . . . . . . . . . . 9,087 9,000
Accrued interest. . . . . . . . . . . . . . . . . . . . . . 29,125 19,701
Other accrued liabilities . . . . . . . . . . . . . . . . . 46,198 35,027
Total current liabilities . . . . . . . . . . . . . . . . . . 560,730 208,313
Long-term debt, net of current portion. . . . . . . . . . . . -- 366,625
Other noncurrent liabilities. . . . . . . . . . . . . . . . . 6,684 9,467
Total noncurrent liabilities. . . . . . . . . . . . . . . . . 6,684 376,092
Redeemable preferred stock, $.01 par value,
issued and outstanding 500,000 shares
(aggregate preference value of $25,000) . . . . . . . . . . . 24,550 24,478
Stockholders' equity (Deficit):
Common stock, $.01 par value, authorized 100,000,000
shares, 46,177,546 and 45,728,505 issued, respectively . . 462 457
Capital in excess of par value of common stock . . . . . . 182,680 181,843
Cumulative translation adjustment . . . . . . . . . . . . . 2,182 (269)
Accumulated deficit . . . . . . . . . . . . . . . . . . . . (280,106) (132,275)
Total stockholders' equity (deficit). . . . . . . . . . . . . (94,782) 49,756
$497,182 $658,639
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Anacomp, Inc. and Subsidiaries
<TABLE>
<CAPTION>
Three months ended Nine months ended
(Dollars in thousands, June 30, June 30,
except per share amounts) 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Services provided . . . . . . . . . . . . . . . $ 55,126 $ 55,374 $ 165,962 $167,523
Equipment and supply sales . . . . . . . . . . 93,807 90,207 286,272 261,576
148,933 145,581 452,234 429,099
Operating costs and expenses:
Costs of services provided . . . . . . . . . . 40,212 38,825 118,194 116,617
Costs of equipment and supplies sold. . . . . . 69,574 65,812 213,137 188,151
Selling, general and administrative expenses . 28,095 20,339 78,954 65,746
Special charges (See Notes 2 & 5) . . . . . . . 130,000 -- 130,000 --
267,881 124,976 540,285 370,514
Income (loss) before interest, other income,
income taxes, and cumulative effect
of accounting change. . . . . . . . . . . . . . (118,948) 20,605 (88,051) 58,585
Interest income . . . . . . . . . . . . . . . . . 471 804 1,554 2,305
Interest expense and fee amortization . . . . . . (18,310) (16,952) (52,310) (50,796)
Cost of withdrawn refinancing . . . . . . . . . . (235) -- (3,235) --
Other income (expense). . . . . . . . . . . . . . (407) 228 (1,370) (366)
(18,481) (15,920) (55,361) (48,857)
Income (loss) before income taxes, and cumulative effect of accounting change. . . (137,429) 4,685 (143,412) 9,728
Provision for income taxes . . . . . . . . . . . 1,400 2,500 2,800 5,200
Income (loss) before cumulative effect
of accounting change. . . . . . . . . . . . . . (138,829) 2,185 (146,212) 4,528
Cumulative effect on prior years of a change in
accounting for income taxes . . . . . . . . . . -- -- -- 8,000
Net income (loss) . . . . . . . . . . . . . . . . (138,829) 2,185 (146,212) 12,528
Preferred stock dividends and discount accretion. 540 540 1,619 1,619
Net income (loss) available
to common stockholders. . . . . . . . . . . . . $(139,369) $ 1,645 $(147,831) $ 10,909
========= ======== ========= ========
Earnings (loss) per common and common equivalent share:
Income (loss) from operations (net of preferred
stock dividends and discount accretion) . . . $ (3.02) $ .03 $ (3.21) $ .06
Cumulative effect on prior years of a change in
accounting for income taxes . . . . . . . . . -- -- -- .17
Net income (loss) . . . . . . . . . . . . . . . $ (3.02) $ .03 $ (3.21) $ .23
======= ======== ========= ========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Anacomp, Inc., and Subsidiaries
<TABLE>
<CAPTION>
Nine months ended
June 30,
(Dollars in thousands) 1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)............................................. $(146,212) $ 12,528
Adjustments to reconcile net income to net
cash provided by operating activities:
Cumulative effect of a change in accounting
for income taxes........................................... -- (8,000)
Special charges............................................. 130,000 --
Depreciation and amortization............................... 31,479 29,547
Loss on disposition of assets .............................. 1,087 727
Change in assets and liabilities:
Decrease in accounts and long-term receivables............ 12,253 2,389
Decrease (increase) in inventories and prepaid expenses... (8,520) 4,510
Increase in other assets.................................. (8,867) (5,426)
Decrease in accounts payable and accrued expenses......... (3,225) (14,318)
Decrease in other noncurrent liabilities.................. (2,783) (2,750)
Net cash provided by operating activities............... 5,212 19,207
Cash flows from investing activities:
Proceeds from sale of assets.................................. 16,093 11,049
Purchases of property, plant and equipment.................... (10,420) (14,001)
Payments to acquire companies and customer rights............. (1,475) (16,852)
Net cash provided by (used in) investing activities..... 4,198 (19,804)
Cash flows from financing activities:
Proceeds from issuance of common stock and warrants........... 698 1,198
Proceeds from revolving line of credit and
long-term borrowings......................................... 20,000 39,000
Principal payments on long-term debt ......................... (42,949) (51,501)
Preferred dividends paid...................................... (1,031) (1,547)
Net cash used in financing activities................... (23,282) (12,850)
Effect of exchange rate changes on cash......................... 211 472
Decrease in cash and cash equivalents........................... (13,661) (12,975)
Cash and cash equivalents at beginning of period................ 19,871 24,922
Cash and cash equivalents at end of period...................... $ 6,210 $ 11,947
========== =========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest ..................................................... $ 34,182 $ 51,416
Income taxes.................................................. $ 2,961 $ 1,635
Supplemental disclosure of noncash investing and financial activities:
During 1995 and 1994, the Company acquired companies and rights to provide future services.
In conjunction with these acquisitions, the purchase price consisted of the following:
Nine months ended
June 30,
(Dollars in thousands) 1995 1994
Cash paid....................................................... $ 1,475 $ 16,852
Notes payable issued............................................ -- 4,240
Stock issued.................................................... -- 17,201
$ 1,475 $ 38,293
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Deficit)
Anacomp, Inc., and Subsidiaries
<TABLE>
<CAPTION>
NINE MONTHS ENDED JUNE 30, 1995 Capital in
excess of
par value Cumulative Retained
Common of Common Translation earnings
(In thousands) Stock Stock Adjustment (deficit) Total
(Unaudited)
<S> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30, 1994 ...... $ 457 $ 181,843 $ (269) $(132,275) $ 49,756
Exercise of stock options .......... 1 50 -- -- 51
Shares issued for purchases under the
Employee Stock Purchase Plan...... 3 644 -- -- 647
Preferred stock dividends .......... -- -- -- (1,547) (1,547)
Accretion of redeemable preferred
stock discount ................... -- -- -- (72) (72)
Translation adjustments for period.. -- -- 2,451 -- 2,451
Graham stock issuance............... 1 143 -- -- 144
Net income (loss) for the period.... -- -- -- (146,212) (146,212)
BALANCE AT JUNE 30, 1995............ $ 462 $ 182,680 $ 2,182 $(280,106) $ (94,782)
======== ========= ========= ========= =========
NINE MONTHS ENDED JUNE 30, 1994 Capital in
excess of
par value Cumulative Retained
Common of Common Translation earnings
(In thousands) Stock Stock Adjustment (deficit) Total
(Unaudited)
BALANCE AT SEPTEMBER 30, 1993 ...... $ 406 $163,209 $ (4,744) $(145,072) $ 13,799
Exercise of stock options .......... 3 545 -- -- 548
Shares issued for purchases under the
Employee Stock Purchase Plan...... 2 648 -- -- 650
Preferred stock dividends .......... -- -- -- (1,547) (1,547)
Accretion of redeemable preferred
stock discount ................... -- -- -- (72) (72)
Translation adjustments for period.. -- -- 1,916 -- 1,916
NBS stock issuance.................. 20 7,380 -- -- 7,400
Graham stock issuance............... 25 9,776 -- -- 9,801
Net income for the period .......... -- -- -- 12,528 12,528
BALANCE AT JUNE 30, 1994............ $ 456 $181,558 $ (2,828) $(134,163) $ 45,023
======== ======== ========= ========= =========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ANACOMP, INC. AND SUBSIDIARIES
1. The condensed consolidated financial statements included herein have
been prepared by Anacomp, Inc. ("Anacomp" or the "Company") and its
wholly-owned subsidiaries without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations; however, the Company believes that the disclosures are
adequate to make the information presented not misleading. The
condensed consolidated financial statements included herein should be
read in conjunction with the financial statements and the notes thereto
included in the Company's Annual Report to Stockholders and its Report
on Form 10-K as of September 30, 1994.
In the opinion of management, the accompanying interim financial
statements contain all material adjustments necessary to present fairly
the consolidated financial condition, results of operations, and changes
in financial position and stockholders' equity of Anacomp and its
subsidiaries for interim periods. Certain amounts in the prior interim
consolidated financial statements have been reclassified to conform to
the current period presentation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Consolidation
The condensed consolidated financial statements include the accounts of
Anacomp, Inc. and its wholly-owned subsidiaries. Material intercompany
transactions have been eliminated.
Foreign Currency Translation
Substantially all assets and liabilities of Anacomp's international
operations are translated at the period-end exchange rates; income and
expenses are translated at the average exchange rates prevailing during
the period. Translation adjustments are accumulated in a separate
section of stockholders' equity. Foreign currency transaction gains and
losses are included in net income.
Segment Reporting
Anacomp operates in a single business segment - providing equipment,
supplies and services for information management, including storage,
processing and retrieval.
<PAGE> 8
Revenue Recognition
Revenues from sales of products and services or from lease of equipment
under sales-type leases are recorded based on shipment of products or
performance of services. Under sales-type leases, the present value of
all payments due under the lease contracts is recorded as revenue, cost
of sales is charged with the book value of the equipment plus
installation costs, and future interest income is deferred and
recognized over the lease term. Revenue from maintenance contracts is
recognized in earnings on a pro rata basis over the period of the
agreement.
Inventories
Inventories are stated at the lower of cost or market, cost being
determined by methods approximating the first-in, first-out basis.
<TABLE>
<CAPTION>
The cost of the inventories is distributed as follows:
June 30, Sept. 30,
(In thousands) 1995 1994
<S> <C> <C>
Finished goods ..................... $ 45,768 $ 41,661
Work in process .................... 6,057 5,903
Raw materials and supplies ......... 19,568 15,811
$ 71,393 $ 63,375
======== ========
</TABLE>
Property and Equipment
Property and equipment are carried at cost. Depreciation and
amortization of property and equipment are generally provided under the
straight-line method for financial reporting purposes over the shorter
of the estimated useful lives or the lease terms. Tooling costs are
amortized over the total estimated units of production, not to exceed
three years.
Goodwill
Excess of purchase price over net assets of businesses acquired
("goodwill") is amortized on the straight-line method over the estimated
periods of future demand for the product acquired. Goodwill related to
magnetics' products, net of accumulated amortization, of $5.5 million is
being amortized over 15 years. Goodwill related to the micrographics
business which includes supplies, COM systems, micrographics services
and maintenance services is primarily being amortized over 40 years.
When factors indicate that goodwill should be evaluated for impairment,
Anacomp historically has evaluated goodwill based on comparing the
unamortized balance of goodwill to undiscounted operating income over
the remaining goodwill amortization period. Effective June 30, 1995,
Anacomp elected to modify its method of measuring goodwill impairment to
a fair value approach. If it is determined that impairment has
occurred, the excess of the unamortized goodwill over the fair value of
the goodwill applicable to the business unit will be charged to
operations. For purposes of determining fair value, the Company values
the goodwill using a multiple of cash flow from operations based on
consultation with its investment advisors. Anacomp has concluded that
fair value is a better measurement of the value of goodwill considering
the Company's highly leveraged financial position and the circumstances
discussed in Note 5.
<PAGE> 9
As discussed in Note 5, Anacomp has recently revised its projected
operating results through 1999. This revision along with applying
Anacomp's revised goodwill accounting policy resulted in a write-off of
$108.0 million of goodwill related to the micrographics business in the
three month period ended June 30, 1995.
Other Intangibles
Other intangibles, net of accumulated amortization, of $23.1 million
represent the purchase of the rights to provide microfilm or maintenance
services to certain customers and are being amortized on a straight-line
basis over 10 years. These unamortized costs are evaluated for
impairment each period by determining their net realizable value.
Research and Development
The costs associated with research and development programs are expensed
as incurred.
Deferred software costs are the capitalized costs of software products
to be sold with COM systems in future periods. The unamortized costs
are evaluated for impairment each period by determining their net
realizable value. Such costs are amortized over the greater of the
estimated units of sale or under the straight-line method not to exceed
five years. Due to lower than expected sales of a major new software
product introduced in January 1995 and certain other matters as
discussed in Note 5, Anacomp recently revised its projected future sales
and operating results of software products through 1999. As a result,
Anacomp wrote off $17.1 million of deferred software costs and
established a reserve of $4.9 million for future payments to a division
of IBM for software license obligations which are not recoverable based
on these revised projections. Unamortized deferred software costs
remaining as of June 30, 1995 total $10.7 million and are included in
"Other Assets" on the accompanying Condensed Consolidated Balance
Sheets.
Sale-Leaseback Transactions
Anacomp entered into sale-leaseback transactions relating to COM systems
installed in the Company's data service centers. Part of the proceeds
were treated as fixed asset sales and the remainder as sales of
equipment. Revenues of $3.5 million and $750,000 were recorded in the
nine months ended June 30, 1995 and 1994 respectively. All profits were
deferred and are being recognized over the applicable leaseback periods.
Income Taxes
In general, Anacomp's practice is to reinvest the earnings of its
foreign subsidiaries in those operations and to repatriate these
earnings only when it is advantageous to do so. It is expected that the
amount of U.S. federal tax resulting from a repatriation will not be
significant. Accordingly, deferred tax is not being recorded related to
undistributed foreign earnings.
<PAGE> 10
Consolidated Statements of Cash Flows
Anacomp considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. These
temporary investments, primarily repurchase agreements and other
overnight investments, are recorded at cost, which approximates market.
3. As described in Item 3 herein, the Company currently is in default under
substantially all of its debt agreements as a result of its failure to
make the $20.0 million principal payment scheduled for April 26, 1995 on
its senior secured debt, the $16.9 million interest payment scheduled
for May 1, 1995 on its 15% Senior Subordinated Notes due 2000 (the "15%
Notes") and the $1.6 million interest payment scheduled for July 17,
1995 on the 13.875% Debentures, as well as certain financial covenant
violations, and the cross-default provisions of the other debt
agreements. As a result of such default, all of Anacomp's long-term
debt has been classified as current in the accompanying Condensed
Consolidated Financial Statements.
4. On April 6, 1995, Anacomp announced that it had withdrawn its proposed
offering of $225 million Senior Secured Notes and a related offer to
purchase up to $50 million of the Company's outstanding 15% Notes. The
offering would have deferred an aggregate of $153 million in scheduled
principal payments in fiscal years 1995 through 1998, thereby providing
Anacomp with increased liquidity and additional cash for product
development. Costs directly related to the withdrawn offering of $3.2
million were charged to other expense in the accompanying Condensed
Consolidated Statement of Operations.
5. Goodwill related to the micrographics business is summarized as follows
(In thousands):
<TABLE>
<CAPTION>
<S> <C>
Balance, September 30, 1994 $249,167
Amortization of goodwill 6,208
Goodwill write-off 108,000
Balance, June 30, 1995 $134,959
========
</TABLE>
During the three month period ended June 30, 1995, Anacomp announced
several significant events which are summarized as follows:
On April 6, 1995, the Company announced that they were withdrawing
its proposed offering of $225.0 million Senior Secured Notes
previously announced on January 23, 1995.
On April 27, 1995, the Company announced that it had agreed with its
senior secured lenders to make its current interest payment of $2.0
million on its senior secured debt while continuing to negotiate the
rescheduling of all or a substantial portion of the $20.0 million
scheduled amortization payment due April 26, 1995, which the Company
failed to make, and waiver of certain possible financial covenant
violations as of March 31, 1995. Also, the the Company announced
that until an agreement was reached with its senior lenders and 15%
Note holders, the Company would not make its upcoming $16.9 million
interest payment to the 15% Note holders scheduled for May, 1995 and
would defer making dividend payments on the Company's 8.25%
Cumulative Convertible Redeemable Exchangeable Preferred Stock.
<PAGE> 11
On May 15, 1995, in connection with announcing a second quarter loss
of $8.2 million, the Company announced plans for a restructuring of
its operations which would include several cost cutting measures and
personnel reductions. It is expected that these initiatives will
reduce expenses $15 to $20 million annually. The Company also
announced that, effective immediately, a new President had been
appointed.
These developments have significantly constrained Anacomp's ability to
finance certain previously projected activities. In addition, in 1995
Anacomp has failed to achieve its original projections of operating
results and has experienced lower than expected sales of a major new
software product which was introduced in January, 1995. In light of
Anacomp's withdrawn note offering, disappointing recent financial
performance and default on its indebtedness, the Company prepared a
revised business plan and operating forecast through 1999.
Based on the events discussed above and in connection with the change in
accounting discussed in Note 2, Anacomp determined that goodwill had
been impaired and measured the impairment based on the fair value
approach discussed in Note 2. As required by generally accepted
accounting principles, this accounting change, which amounted to a
charge of $108.0 million, was recorded as a change in estimate and was
included in the results of operations for the quarter ended June 30,
1995.
6. The Company sold $5.5 million of lease receivables in the quarter ending
March 31, 1995. Under the terms of the sale, the purchasers have
recourse to the Company should the receivables prove to be
uncollectible. The amount of recourse at June 30, 1995 is $1.8 million.
7. Income tax expense is reported during interim periods using an estimated
annual effective tax rate for the the taxable jurisdictions in which the
Company operates. At June 30, 1995 the Company had U.S. federal net
operating loss carryforwards ("NOL's") of approximately $200 million
available to offset future taxable income. These NOL's expire
commencing in 1995.
8. The computation of earnings (loss) per common and common equivalent
share is based upon the weighted average number of common shares
outstanding during the periods plus (in the periods in which they have a
dilutive effect) the effect of common shares contingently issuable,
primarily from stock options and exercise of warrants.
The fully diluted per share computation reflects the effect of common
shares contingently issuable upon the exercise of warrants in periods in
which such exercise would cause dilution. Fully diluted earnings (loss)
per share also reflect (in the periods in which they have a dilutive
effect) additional dilution related to stock options due to the use of
the market price at the end of the period, when higher than the average
price for the period.
Fully diluted earnings (loss) per share are the same as primary earnings
per share for the periods presented.
9. Subsequent to June 30, 1995 Anacomp announced the closure of its
magnetic media facility in Omaha, Nebraska. The fourth quarter will
include an estimated $3 to $5 million charge for the close down which is
to be completed in early fiscal year 1996.
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Third Quarter Ended June 30, 1995 Compared With
Third Quarter Ended June 30, 1994
Results of Operations
General
Anacomp incurred a loss of $139.4 million for the three months ended June 30,
1995. Included in this loss are special charges of $130.0 million
representing a write-off of goodwill of $108.0 million and $22.0 million of
costs associated with software investments (See Notes 2 & 5 and discussion
below). In addition, certain of the micrographics product lines have
continued to experience disappointing revenues and profits in the current
quarter due to both competitive pricing and lower volumes. Anacomp expects
the declining market trends in its core micrographics business to continue.
Operating income, i.e., income before special charges, interest, other income,
and income taxes, decreased $9.6 million compared to the same period of the
prior year. Contributing to the decrease was $4.6 million of insurance
proceeds and reserve adjustments related to environmental liability exposures
included in the third quarter of the prior year which were not repeated in the
current period. Also contributing to the overall loss was a $1.4 million
default interest charge as a result of missed principal and interest payments.
Total revenues for the three months ended June 30, 1995 increased $3.4 million
over the same period of the prior year. The increase is primarily due to a
$3.8 million increase in magnetics sales and a $2.4 million increase in COM
systems sales. Offsetting these contributions were decreases in micrographics
supplies and equipment, maintenance and other revenues.
Costs of services provided as a percent of services revenue were 73% in the
three months ended June 30, 1995, compared to 70% in the same period of the
prior year. The increase in the cost of services provided as a percentage of
revenue is attributable to continued price erosion in micrographics services,
increased costs associated with maintenance services, and a $1.1 million
settlement cost of a customer pricing issue. Costs of equipment and supplies
sold as a percent of equipment and supplies sales were 74% for the three
months ended June 30, 1995 compared to 73% in the same period of the prior
year.
Selling, general and administrative expenses were 19% of revenue in the three
months ended June 30, 1995 compared to 14% in the same period of the prior
year. The increase is due primarily to the $4.6 million environmental
insurance proceeds and reserve reduction in the third quarter of fiscal 1994
and certain severance costs incurred in the third quarter of fiscal 1995. In
addition, the sale-leaseback of data center equipment increased equipment
rental costs by $658,000 more than the reduction in depreciation costs
compared to the prior period and this increase is reflected in selling,
general, and administrative expenses.
<PAGE> 13
Interest expense and fee amortization includes an accrual of $1.4 million of
default interest on the senior secured debt as well as the 15% Senior
Subordinated Notes (The "15% Notes") pursuant to the terms of the various
debt agreements.
Special Charges and Restructuring
As mentioned above, included in the operating results for the third quarter
are special charges totalling $130.0 million including the write-off of a
portion of goodwill related to micrographics products. During the three
month period ended June 30, 1995, Anacomp announced several significant
events which are summarized as follows:
On April 6, 1995, the Company announced that it was withdrawing its proposed
offering of $225.0 million Senior Secured Notes previously announced on
January 23, 1995.
On April 27, 1995, the Company announced that it had agreed with its senior
secured lenders to make its current interest payment of $2.0 million on its
senior secured debt while continuing to negotiate the rescheduling of all or
a substantial portion of the $20.0 million scheduled amortization payment
due April 26, 1995, which the Company failed to make, and the waiver of
certain financial covenant violations as of March 31, 1995. Also, the
Company announced that until an agreement was reached with its senior
lenders and 15% Note holders, the Company would not make its upcoming $16.9
million interest payment to the 15% Note holders scheduled for May, 1995 and
would defer making dividend payments on the Company's 8.25% Cumulative
Convertible Redeemable Exchangeable Preferred Stock.
On May 15, 1995, in connection with announcing a second quarter loss of $8.2
million, the Company announced plans for a restructuring of its operations
which would include several cost cutting measures and personnel reductions.
These initiatives will reduce expenses in excess of $20 million annually.
The Company also announced that, effective immediately, a new President had
been appointed.
These developments have significantly constrained Anacomp's ability to
finance certain previously projected activities. In addition, in 1995
Anacomp has failed to achieve its original projections of operating results
and has experienced lower than expected sales of a major new software
product which was introduced in January, 1995. In light of Anacomp's
withdrawn note offering, disappointing recent financial performance and
default on its indebtedness, the Company prepared a revised business plan
and operating forecast through 1999.
Based on the events discussed above and in connection with the change in
accounting discussed in Note 2 to the accompanying Condensed Consolidate
Financial Statements, Anacomp determined that goodwill had been impaired and
measured the impairment based on the fair value approach discussed in Note
2. As required by generally accepted accounting principles, this accounting
change, which amounted to a charge of $108.0 million, was recorded as a
change in estimate and was included in the results of operations for the
quarter ended June 30, 1995.
<PAGE> 14
Over the last three years, Anacomp has invested and capitalized over $20.0
million related to the development of software to provide advanced
capabilities for the XFP 2000 related to the processing of Xerox and IBM
print streams. These software enhancements are referred to as the Xerox
Compatibility Feature ("XCF") and Advance Function Presentation ("AFP")
feature. XCF was introduced at the beginning of the second quarter and AFP
at the beginning of the fourth quarter. Initial sales of the XCF product
have been significantly below expectations. Based upon that experience,
Anacomp has updated its sales forecast for both products and has adjusted
the carrying amount of the software investment to net realizable value.
That adjustment resulted in a software write-off of $17.1 million (included
on the balance sheet under the category other assets) and the establishment
of a $4.9 million reserve for future payments to a division of IBM for
software license obligations which are not recoverable based upon the
revised sales forecasts.
The Company's strategy for ongoing financial improvement will be to
eliminate unprofitable product lines and outsource manufacturing for low
margin products while continuing to offer similar products on an OEM or
reseller basis. The updated business plan has resulted in a determination
to exit certain businesses or product lines. Specifically, Anacomp intends
to sell its Image Conversion Services Division ("ICS"), and close its Omaha,
Nebraska factory which produces the magnetic media for flexible diskettes.
These decisions were reached subsequent to June 30, 1995 and will be
reflected in the fourth quarter financial results. The Company is also
considering other restructuring measures which may result in additional
charges to operations in the fourth quarter of fiscal 1995.
The ICS division performs source document microfilm services at several
facilities around the country, generating approximately $20.0 million of
revenues. It is expected that a sale of this division will be consummated
over the next sixty to ninety days at a net gain to the Company.
The market price of the magnetic media manufactured in Anacomp's Omaha
factory has been decreasing significantly over the last several months. In
addition, Anacomp's primary customer continues to experience liquidity
shortfalls which places this product line at increased business risk. As a
result, Anacomp announced the closure of this facility on July 28, 1995 and
will record an estimated close down loss of $3 to $5 million in the fourth
quarter. The closure is expected to be completed in the first quarter of
fiscal 1996.
Products and Services
COM systems revenues for the three months ended June 30, 1995 increased $2.4
million compared to the same period of the prior year. The Company sold or
leased 39 new XFP 2000 COM systems to third party users in the current
period compared to 38 new systems in the same period of the prior year.
Revenues are disproportionally higher than the increase in new XFP unit
sales due to a higher level of used equipment revenues in the current
period. Operating margins as a percent of revenue increased as a result of
higher average selling prices due to changes in product mix. Although COM
systems revenues increased, based on disappointing sales of XCF and weaker
than anticipated XFP 2000 sales, the Company has significantly reduced its
XFP 2000 sales forecast.
<PAGE> 15
Micrographics supplies and equipment revenues for the three months ended
June 30, 1995 decreased 1% compared to the same period of the prior year.
Sales of original film were also down 1%. The Company anticipates reduced
original film sales in future periods due in part to more aggressive
competition. Readers and reader/printers revenues were down 6%, as a result
of lower volumes and lower average selling prices. Duplicate film sales
were up 17% compared to the prior period, due to the addition of First Image
and Eastman Kodak's European duplicate film business. Micrographics
supplies and equipment operating margins as a percent of revenue decreased
two percentage points as a result of changes in product mix, increased costs
of production, and lower average selling prices.
Micrographics services revenues increased 4% for the three months ended June
30, 1995 compared to the same three months of fiscal 1994. COM services
volumes increased 9%, and average selling prices decreased approximately 8%.
The decrease in average selling prices is the result of continued
competition from competing service bureaus and alternative technologies.
Operating margins as a percent of revenue decreased 4% as the reduction in
selling prices exceeded reductions in production costs. The Company expects
to offset market price erosion with cost reductions and other steps to
enhance efficiencies at its data centers.
Maintenance service revenues decreased $1.2 million, or 6%, primarily due to
the effect of replacing older generation COM systems with the XFP which has
a capacity significantly greater than the previous generation systems. In
addition, the Company resolved a customer pricing issue which reduced
revenue and profit $1.1 million. Operating margins as a percent of revenue
decreased 5%. With the continued consolidation of the COM maintenance
market, the Company plans to add non-micrographic products to its service
base.
Magnetics revenues increased $3.8 million, or 13%, for the three months
ended June 30, 1995 compared to the same three months of fiscal 1994. The
growth is attributable to the acquisition of Graham Magnetics which was
effective in early May, 1994, although the precise contribution from Graham
can not be determined as the Graham operations have been integrated with
those of Anacomp. Magnetics operating margins as a percent of revenue were
flat in the current period compared to the prior period.
Other revenues decreased $2.2 million for the three months ended June 30,
1995 compared to the same three months of fiscal 1994. The decrease is
primarily due to reduced revenues from Anacomp's A-New product which
decreased $1.9 million.
<PAGE> 16
Nine Months Ended June 30, 1995 Compared With
Nine Months Ended June 30, 1994
Results of Operations
General
Anacomp incurred a loss of $147.8 million for the nine months ended June 30,
1995. Included in the loss are special charges of $130.0 million
representing a write-off of goodwill of $108.0 million and $22.0 million of
costs associated with software investments (See Notes 2 & 5 and discussion
above). Operating income, i.e., income before special charges, interest,
other income, and income taxes, decreased $16.6 million compared to the
same period of the prior year. The prior year results includes $4.7 million
of insurance proceeds and reserve adjustments related to environmental
liability exposures which were not repeated in the current year.
Contributing to the overall loss was $3.2 million of expenses associated
with the proposed refinancing of Anacomp's senior debt which was withdrawn
in early April. Also contributing to the loss was $1.0 million of
accelerated debt fee amortization, $1.4 million of default interest as a
result of missed principal and interest payments, and a $630,000 loss on
sale of an idle facility.
Total revenues for the nine months ended June 30, 1995 increased $23.1
million over the same period of the prior year. The increase is due to a
$34.0 million increase in sales of magnetics products resulting from the
acquisition of Graham Magnetics in May 1994. In addition, the acquisition
of the COM services customer base of 14 data service centers from National
Business Systems, Inc. ("NBS") on January 3, 1994 contributed $8.9 million
to revenues for the first nine months of fiscal 1995, compared to $6.2
million for the corresponding nine months of fiscal 1994. Offsetting these
contributions were decreases in micrographics supplies and equipment,
maintenance and other revenues.
Costs of services provided as a percent of services revenue were 71% in the
first nine months of fiscal 1995, compared to 70% in the first nine months
of fiscal 1994. Costs of equipment and supplies sold as a percent of
equipment and supplies sales were 74% in the current period compared to 72%
in the same period of the prior year.
Selling, general and administrative expenses were 17% of revenue in the
current period compared to 15% in the prior period. The increase is due in
part to the acquisitions of Graham Magnetics and the NBS customer base,
including the impact of increased amortization of the intangible assets
recorded on those transactions. Also contributing to the increase was the
$4.7 million environmental reserve adjustment mentioned above. In addition,
the sale-leaseback of data center equipment increased equipment rental costs
by $1.9 million more than the reduction in depreciation costs compared to
the prior period and this increase is reflected in selling, general, and
administrative expenses.
<PAGE> 17
Interest expense and fee amortization includes $1.0 million of accelerated
amortization of debt fees as a result of accelerated debt paydowns that
occurred in the first quarter of fiscal 1995. Interest expense and fee
amortization also include an accrual of $1.4 million of default interest on
the senior secured debt as well as the 15% Notes which is required by the
terms of the various debt agreements. In addition to scheduled debt paydowns
of $17.8 million, $15.8 million of Term Loan and Series A Notes were repaid
during the first quarter of fiscal 1995.
Included in other expense is a $630,000 loss on the sale of an idle facility
in Hartford, Wisconsin which was vacated in 1992 upon the transfer of the
reader and reader/printer manufacturing operations to San Diego, California.
The Company has restated its financial statements for the three and nine
months ended June 30, 1994 to recognize revenues for COM systems warehoused
for certain customers in the periods the units are shipped which is
consistent with the interim financial statements for fiscal 1995. The
impact of this restatement resulted in a decrease in revenues $1.1 million,
and a decrease in net income of $291,000 for the nine months ended June 30,
1994. In addition, the Company has reclassified accreted interest on
unfavorable lease reserves from discontinued operations to interest expense
in 1994 to conform with the 1995 presentation.
Products and Services
COM systems revenues for the first nine months increased $1.2 million
compared to the same period of the prior year. The Company sold or leased
113 XFP 2000 COM systems to third party users in the current period compared
to 107 systems in the prior period. The current period also includes $3.5
million of sales of equipment for Anacomp data centers under sale and
leaseback arrangements compared to $750,000 in the prior period. Operating
margins as a percent of revenue were up slightly for the period, as a result
of higher average selling prices.
Micrographics supplies and equipment revenues for the first nine months
decreased 3% compared to the same period of the prior year. Sales of
original film were down 4% as a result of lower volumes. Reader and
reader/printer revenues were down 8%, as a result of lower volumes, as well
as lower average selling prices. Duplicate film sales were up 7% largely as
a result of the addition of First Image and Eastman Kodak's European
duplicate film business. Micrographics supplies and equipment operating
margins as a percent of revenue decreased 2% as a result of changes in
product mix, increased costs of production, and lower average selling
prices.
<PAGE> 18
Micrographics services revenues increased 2% in the first nine months of
fiscal 1995 compared to the first nine months of fiscal 1994. COM services
volumes increased 9%, but average selling prices decreased approximately 8%.
Approximately one-third of the volume growth is due to the contribution of
the NBS customer base which was included in the prior period for only six
months. The decrease in average selling prices is due, in part, to the
impact of the NBS customer base which had lower average prices, but is also
the continuation of market price erosion, a trend that the Company expects
to continue in the near future. Operating margins as a percent of revenue
decreased 4% as the reduction in selling prices exceeded reductions in
production costs.
Maintenance service revenues decreased $3.5 million, or 5%, primarily due to
the effect of replacing older generation COM systems with the XFP which has
a capacity significantly greater than the previous generation systems. In
addition, the Company resolved a customer pricing issue which reduced
revenue and profit $1.1 million. Operating margins as a percent of revenue
decreased slightly.
Magnetics revenues increased $33.9 million, or 49%, in the first nine months
of fiscal 1995 compared to the first nine months of fiscal 1994. The growth
is attributable to the acquisition of Graham Magnetics which was effective
in early May, 1994, although the precise contribution from Graham can not be
determined as the Graham operations have been integrated with those of
Anacomp. Magnetics operating margins as a percent of revenue improved in
the current period due to operating efficiencies resulting from the Graham
acquisition.
Other revenues decreased by $6.0 million in the first nine months of fiscal
1995 compared to the first nine months of fiscal 1994. The decrease is
primarily due to reduced revenues from Anacomp's A-New product which
decreased $5.7 million.
Liquidity and Capital Resources
The Company currently is in default under substantially all of its debt
agreements as a result of its failure to make the $20.0 million principal
payment scheduled for April 26, 1995 on its senior secured debt, the $16.9
million interest payment scheduled for May 1, 1995 on its 15% Notes, and the
$1.6 million interest payment scheduled for July 17, 1995 on the 13.875%
Debentures, as well as certain financial covenant violations, and the cross-
default provisions of the other debt agreements. In addition, the Company
will continue to defer payment of the quarterly dividends on the Company's
8.25% cumulative convertible exchangeable preferred stock until a
restructuring of its debt is completed.
During the first nine months, Anacomp repaid $38.0 million of Term, Series A
and Series B debt with proceeds from sale-leaseback transactions of data
service center equipment and certain other assets ($14.5 million), drawdowns
on the revolving credit lines ($17.7 million), and available cash reserves
($5.8 million).
<PAGE> 19
Anacomp's working capital at June 30, 1995, excluding the current portion of
long-term debt, amounted to $28.7 million compared to $51.0 million at
September 30, 1994. As disclosed in the Condensed Consolidated Statements
of Cash Flows, net cash provided by operating activities decreased to $5.2
million for the first nine months compared to $19.2 million in the
comparable prior period, due to relatively higher levels of inventory and
prepaid expense and to the net loss for the period. Net cash provided by
investing activities increased to $4.2 million in the current period,
compared to net cash used in investing activities of $19.8 million in the
comparable prior period, primarily as a result of the sale and leaseback of
data service center equipment and reduced payments to acquire companies.
Net cash used in financing activities increased as a result of the debt
paydowns described above.
The Company is highly leveraged, although its cash flow from operations
historically has been sufficient to cover payments of interest and principal
of its outstanding indebtedness. Certain recent developments, however, have
had material adverse effects on the Company's short-term liquidity and the
Company's ability to service its debt.
Although revenues for the Company's core micrographic business had been
declining over the last several fiscal years, the Company believed that
these declines would stabilize. In addition, the Company sought to increase
revenue through opportunities related to the consolidation of the
micrographics industry, the development of new micrographics and digital
products and services such as the DS 300, VELLOS, XSTAR and XCF and AFP
capabilities, and the investment in emerging digital technologies.
Based on this growth strategy, in March 1995, Anacomp attempted to refinance
certain of its existing indebtedness through a public offering of $225.0
million of Senior Secured Notes. The new notes would have deferred an
aggregate of $153.0 million in scheduled principal payments in fiscal years
1995 through 1998, resulting in increased liquidity and cash for product
development. Anacomp was unable to complete the refinancing and announced
the withdrawal of the proposed offering on April 6, 1995.
As a result of the withdrawn offering and weaker than anticipated second
quarter results, including disappointing sales performance for the Company's
new products, the Company did not have sufficient cash available to make
both its $20.0 million scheduled principal payment due April 26, 1995 on its
senior secured debt and the $16.9 million scheduled interest payment due May
1, 1995 on its 15% Notes. The Company sought an agreement with its senior
secured lenders to reschedule its April 26, 1995 principal payment but was
unable to obtain such an agreement. As a result of the foregoing, the
Company has ceased making principal payments on its senior and subordinated
debt and interest payments on its subordinated debt. Accordingly, this
indebtedness has been classified as current in the accompanying Condensed
Consolidated Financial Statements. The Company has continued to make
monthly interest payments to its senior secured lenders.
<PAGE> 20
The Company has been engaged in continuous efforts since May 1995 to
formulate a restructuring plan to satisfy its various investor
constituencies. Such efforts have included the retention of Smith Barney
Inc. to assist in the restructuring process and the development by the
Company of a new business plan and strategy to address the Company's current
financial situation and disappointing recent financial performance.
On August 14, 1995, the Company presented a restructuring proposal to
certain of the Company's senior secured lenders and holders of its 15% Notes
who agreed to treat such information as confidential. Under the terms of
the proposal, trade creditors will continue to be paid under normal trade
terms. If agreement upon a consensual restructuring plan is reached, the
Company presently intends to incorporate the plan in a "prepackaged" plan of
reorganization to be filed under Chapter 11 of the United States Bankruptcy
Code. There can be no assurances that the restructuring proposal as
presented will be agreed to by the Company's creditors. As previously
reported, if an agreement is not reached, a non-prepackaged Chapter 11
Bankruptcy proceeding is likely.
Despite the missed principal and interest payments on its indebtedness, the
Company believes that it has sufficient liquidity from operations to conduct
the business while negotiating with its senior secured lenders and other
debt holders.
<PAGE> 21
ANACOMP, INC. AND SUBSIDIARIES
PART II: OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
On April 6, 1995, Anacomp defaulted on the payment of its
Senior Secured Debt. See "Liquidity and Capital
Resources".
PAGE NUMBER
<TABLE>
<CAPTION>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<S> <C>
(a) Exhibits
(11) Computation of Earnings per Common Share. 22
(18) Change in Accounting Principle. 24
(27) Financial Data Schedules.
(Required for electronic filling only)
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the
quarter ended June 30, 1995.
</TABLE>
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ANACOMP, INC.
/s/ Donald L. Viles
Donald L. Viles
Vice President and
Chief Accounting Officer
Dated this 14th day of August, 1995
<PAGE> 1
EXHIBIT 11
Anacomp, Inc. and Subsidiaries
COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE (Unaudited)
PRIMARY
<TABLE>
<CAPTION>
Three months ended Nine months ended
June 30, June 30,
(In thousands, except per share amounts) 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Earnings (loss) per Common Share:
Net income (loss) available to
common stockholders..................$(139,369) $ 1,645 $(147,831) $10,909
========= ======= ========= =======
Shares:
Weighted average common shares
outstanding .......................... 46,178 44,768 46,022 42,853
Adjustments:
(a) Assumed issuances under
acquisition contingencies........... -- 561 -- 561
(b) Assumed issuances under
stock option and stock
purchase plans (antidilutive
in a loss quarter) ................. -- 1,258 -- 1,295
(c) Assumed exercise of warrants......... -- 1,629 -- 1,846
Total shares ............................. 46,178 48,216 46,022 46,555
========= ======= ========= =======
Earnings (loss) per common share .........$ (3.02) $ .03 $ (3.21) $ .23
========= ======= ========= =======
</TABLE>
<PAGE> 2
EXHIBIT 11
Anacomp, Inc. and Subsidiaries
COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE (Unaudited)
ASSUMING FULL DILUTION
<TABLE>
<CAPTION>
Three months ended Nine months ended
June 30, June 30,
(In thousands, except per share amounts) 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Earnings (loss) per Common Share:
Net income (loss) available to
common stockholders..................$(139,369) $ 1,645 $(147,831) $10,909
========= ======= ========= =======
Shares:
Weighted average common shares
outstanding .......................... 46,178 44,768 46,022 42,853
Adjustments:
(a) Assumed issuances under
acquisition contingencies........... -- 561 -- 561
(b) Assumed issuances under
stock option and stock
purchase plans (antidilutive
in a loss quarter) ................. -- 1,317 -- 1,374
(c) Assumed exercise of warrants......... -- 1,650 -- 1,928
Total shares ............................. 46,178 48,296 46,022 46,716
========= ======= ========= =======
Earnings (loss) per common share .........$ (3.02) $ .03 $ (3.21) $ .23
========= ======= ========= =======
</TABLE>
<PAGE> 1
Exhibit 18
August 8, 1995
Anacomp, Inc.
Gentlemen:
This letter is written to meet the requirements of Regulation S-K calling
for a letter from a registrant's independent accountants whenever there has
been a change in accounting principle or practice.
We have been informed that, as of June 30, 1995 the Company changed from
measuring goodwill impairment of its magnetics products and micrographics
business based on undiscounted operating income over the remaining goodwill
amortization period to measuring goodwill impairment based on the fair value
of the related business unit. According to the management of the Company,
this change was made as management believes that measuring the impairment of
goodwill using a fair value approach is a more appropriate method due to
Anacomp's highly leveraged financial position and the events discussed in
Note 5 to the Condensed Consolidated Financial Statements for the three and
nine months ended June 30, 1995.
A complete coordinated set of financial and reporting standards for
determining the preferability of accounting principles among acceptable
alternative principles has not been established by the accounting
profession. Thus, we cannot make an objective determination of whether the
change in accounting described in the preceding paragraph is to a preferable
method. However, we have reviewed the pertinent factors, including those
related to financial reporting, in this particular case on a subjective
basis, and our opinion stated below is based on our determination made in
this manner.
We are of the opinion that the Company's change in method of accounting is
to an acceptable alternative method of accounting, which, based upon the
reasons stated for the change and our discussions with you, is also
preferable under the circumstances in this particular case. In arriving at
this opinion, we have relied on the business judgement and business planning
of your management.
We have not audited the financial statements of the Company for any period
subsequent to September 30, 1994; therefore, we do not express any opinion
with respect to your financial statements for the three and nine months
ended June 30, 1995.
Very truly yours,
ARTHUR ANDERSEN LLP
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ANACOMP,
INC.'S MARCH 31, 1995 FORM 10-Q/A QUARTERLY REPORT AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 6,210
<SECURITIES> 0
<RECEIVABLES> 107,528
<ALLOWANCES> 4,214
<INVENTORY> 71,393
<CURRENT-ASSETS> 198,962
<PP&E> 157,195
<DEPRECIATION> 102,697
<TOTAL-ASSETS> 497,182
<CURRENT-LIABILITIES> 560,730
<BONDS> 0
0
24,550
<OTHER-SE> (94,782)
<TOTAL-LIABILITY-AND-EQUITY> 497,182
<SALES> 286,272
<TOTAL-REVENUES> 452,234
<CGS> 213,137
<TOTAL-COSTS> 540,285
<OTHER-EXPENSES> (3,051)
<LOSS-PROVISION> 621
<INTEREST-EXPENSE> 52,310
<INCOME-PRETAX> (143,412)
<INCOME-TAX> 2,800
<INCOME-CONTINUING> (146,212)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (147,831)
<EPS-PRIMARY> (3.21)
<EPS-DILUTED> (3.21)
</TABLE>
