<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 March 31, 1996
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, 1996, the close of the period covered by this report, was 48,013,246.
<PAGE> 2
ANACOMP, INC. AND SUBSIDIARIES
Index
<TABLE>
<CAPTION>
<S>
PART I. FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements:
<C>
Condensed Consolidated Balance Sheets
March 31, 1996 and September 30, 1995 .................. 2
Condensed Consolidated Statements of Operations
Three and Six Months Ended March 31, 1996 and 1995...... 3
Condensed Consolidated Statements of Cash Flows
Six Months Ended March 31, 1996 and 1995................ 4
Condensed Consolidated Statements of Stockholders' Equity
(Deficit) Six Months Ended March 31, 1996 and 1995...... 5
Notes to Condensed Consolidated Financial Statements...... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ............. 15
PART II. OTHER INFORMATION
Item 3. Defaults Upon Senior Securities............................ 21
Item 6. Exhibits and Reports on Form 8-K........................... 21
SIGNATURES ............................................................ 22
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
Anacomp, Inc. and Subsidiaries (Debtor-in-possession)
<TABLE>
<CAPTION>
(Dollars in thousands, except per share amounts) Mar. 31, Sept. 30,
1996 1995
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . $ 49,259 $ 19,415
Accounts and notes receivable, less allowances for
doubtful accounts of $6,968 and $7,367, respectively . . . 72,894 90,091
Current portion of long-term receivables . . . . . . . . . 5,680 6,386
Inventories . . . . . . . . . . . . . . . . . . . . . . . . 42,535 53,995
Prepaid expenses and other . . . . . . . . . . . . . . . . 6,412 5,306
Total current assets . . . . . . . . . . . . . . . . . . . . 176,780 175,193
Property and equipment, at cost less
accumulated depreciation and amortization . . . . . . . . . 36,663 44,983
Long-term receivables, net of current portion . . . . . . . . 9,133 12,322
Excess of purchase price over net assets of businesses
acquired and other intangibles, net. . . . . . . . . . . . . 155,473 160,315
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . 13,942 28,216
$391,991 $421,029
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES NOT SUBJECT TO COMPROMISE:
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . $122,619 $389,900
Accounts payable . . . . . . . . . . . . . . . . . . . . . 52,894 57,368
Accrued compensation, benefits and withholdings . . . . . . 14,369 20,891
Accrued income taxes . . . . . . . . . . . . . . . . . . . 11,334 9,365
Accrued interest. . . . . . . . . . . . . . . . . . . . . . 4,888 40,746
Other accrued liabilities . . . . . . . . . . . . . . . . . 48,587 60,587
Total current liabilities . . . . . . . . . . . . . . . . . . 254,691 578,857
Long-term debt, net of current portion. . . . . . . . . . . . -- --
Other noncurrent liabilities. . . . . . . . . . . . . . . . . 5,548 5,841
Total noncurrent liabilities. . . . . . . . . . . . . . . . . 5,548 5,841
LIABILITIES SUBJECT TO COMPROMISE (See Note 4):
Current Portion of long-term debt. . . . . . . . . . . . . . 258,611 --
Accrued Interest . . . . . . . . . . . . . . . . . . . . . . 46,838 --
305,449 --
Redeemable preferred stock including accrued dividends
as of March 31, 1996, $.01 par value, 500,000 issued,
402,325 and 500,000 outstanding, respectively (aggregate
preference value of $20,116 and 25,000, respectively) . . . . 21,340 24,574
Stockholders' equity (deficit):
Common stock, $.01 par value, authorized 100,000,000
shares, 48,013,246 and 46,187,625 issued, respectively . . 480 462
Capital in excess of par value. . . . . . . . . . . . . . . 187,512 182,725
Cumulative translation adjustment . . . . . . . . . . . . . (52) 1,329
Accumulated deficit . . . . . . . . . . . . . . . . . . . . (382,977) (372,759)
Total stockholders' equity (deficit). . . . . . . . . . . . . (195,037) (188,243)
$391,991 $421,029
======== ========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Anacomp, Inc. and Subsidiaries (Debtor-in-possession)
<TABLE>
<CAPTION>
Three months ended Six months ended
(Dollars in thousands, except per share amounts) March 31, March 31,
1996 1995 1996 1995
(See Notes 4 & 5) (See Notes 4 & 5)
<S> <C> <C> <C> <C>
Revenues:
Services provided . . . . . . . . . . . . . . . $ 48,262 $ 55,956 $ 99,190 $110,836
Equipment and supply sales . . . . . . . . . . 77,649 95,533 156,986 192,465
125,911 151,489 256,176 303,301
Operating costs and expenses:
Costs of services provided . . . . . . . . . . 26,687 30,971 54,525 60,752
Costs of equipment and supplies sold . . . . . 58,813 69,952 120,574 142,810
Selling, general and administrative expenses . 23,148 37,562 47,595 68,842
108,648 138,485 222,694 272,404
Income before interest, other income,
reorganization items and income taxes . . . . . 17,263 13,004 33,482 30,897
Interest expense and fee amortization (con-
tractual interest for the three and
six months ending March 31, 1996 is $14,732
and $29,804, respectively) . . . . . . . . . . . (5,499) (16,051) (23,785) (34,000)
Interest Income . . . . . . . . . . . . . . . . . 431 608 932 1,083
Cost of withdrawn refinancing . . . . . . . . . . -- (3,000) -- (3,000)
Other income (expenses) (See Note 7). . . . . . . 24 (1,125) 6,644 (963)
(5,044) (19,568) (16,209) (36,880)
Income (loss) before reorganization
items and income taxes. . . . . . . . . . . . . 12,219 (6,564) 17,273 (5,983)
Reorganization Items:
Write-off of deferred debt issue costs and
discounts . . . . . . . . . . . . . . . . . . . (17,551) -- (17,551) --
Financial restructuring costs. . . . . . . . . . (3,135) -- (5,936) --
Interest earned on accumulated cash resulting
from Chapter 11 proceedings . . . . . . . . . . 236 -- 236 --
(20,450) -- (23,251) --
Loss before income taxes . . . . . . . . . . . . (8,231) (6,564) (5,978) (5,983)
Provision for income taxes (See Note 8) . . . . . 2,500 1,100 3,700 1,400
Net loss . . . . . . . . . . . . . . . . . . . . (10,731) (7,664) (9,678) (7,383)
Preferred stock dividends and discount accretion. -- 539 540 1,079
Net loss available to common stockholders . . . . $(10,731) $( 8,203) $(10,218) $ (8,462)
======== ========= ======== ========
Net loss per common and common equivalent share . $ (.23) $ (.18) $ (.22) $ (.18)
======== ======== ======== ========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Anacomp, Inc., and Subsidiaries (Debtor-in-possession)
<TABLE>
<CAPTION>
Six months ended
(Dollars in thousands) March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss ..................................................... $( 9,678) $ (7,383)
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization............................... 14,564 21,397
Loss on disposition of other assets......................... 53 865
Gain on sale of ICS Division................................ (6,202) --
Change in assets and liabilities:
Decrease in accounts and long-term receivables............ 16,652 2,778
Decrease (increase) in inventories and prepaid expenses... 9,501 (9,352)
Decrease (increase) in other assets....................... 1,914 (7,864)
Increase (decrease) in accounts payable
and accrued expenses..................................... (17,301) 3,335
Increase (decrease) in other noncurrent liabilities....... 113 (1,868)
Net cash provided by operating activities before
reorganization items................................... 9,616 1,908
Operating cash flow from reorganization items
(See Notes 4 & 5):
Loss on write-off of debt issue costs and debt discounts.. 17,551 --
Financial Restructuring costs............................. 5,936 --
Interest earned on accumulated cash resulting from
Chapter 11 proceedings................................... (236) --
Net cash provided by operating activities............... 32,867 1,908
Cash flows from investing activities:
Proceeds from sale of ICS Division............................ 13,554 --
Proceeds from sale of other assets............................ -- 14,520
Purchases of property, plant and equipment.................... (2,537) (7,631)
Payments to acquire companies and customer rights............. -- (1,285)
Net cash provided by investing activities............... 11,017 5,604
Cash flows from financing activities:
Proceeds from issuance of common stock and warrants........... -- 519
Proceeds from revolving line of credit and
long-term borrowings......................................... 1,329 20,000
Principal payments on long-term debt ......................... (14,991) (40,777)
Preferred dividends paid...................................... -- (1,031)
Net cash used in financing activities................... (13,662) (21,289)
Effect of exchange rate changes on cash......................... (378) 138
Increase (decrease) in cash and cash equivalents................ 29,844 (13,639)
Cash and cash equivalents at beginning of period................ 19,415 19,871
Cash and cash equivalents at end of period...................... $ 49,259 $ 6,232
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest ..................................................... $ 8,175 $ 27,961
Income taxes.................................................. $ 1,297 $ 2,361
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
Anacomp, Inc. and Subsidiaries (Debtor-in-possession)
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31,1996
Capital in Cumulative Retained
Common Excess of Translation Earnings
(Dollars in thousands) Stock Par Value Adjustment (Deficit) Total
<S> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30, 1995 ...... $ 462 $ 182,725 $ 1,329 $(372,759) $(188,243)
Preferred stock conversion ......... 7 4,798 -- -- 4,805
Preferred stock dividends .......... -- -- -- (516) (516)
Accretion of redeemable preferred
stock discount ................... -- -- -- (24) (24)
Translation adjustments for period.. -- -- (1,381) -- (1,381)
NBS stock issuance.................. 11 (11) -- -- --
Net loss for the period ............ -- -- -- (9,678) (9,678)
BALANCE AT MARCH 31, 1996 .......... $ 480 $ 187,512 $ (52) $(382,977) $(195,037)
======== ========= ========= ========= =========
SIX MONTHS ENDED MARCH 31, 1995
Capital in Cumulative Retained
Common Excess of Translation Earnings
(Dollars in thousands) Stock Par value Adjustment (Deficit) Total
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.. 2 466 -- -- 468
Preferred stock dividends .......... -- -- -- (1,031) (1,031)
Accretion of redeemable preferred
stock discount ................... -- -- -- (48) (48)
Translation adjustments for period.. -- -- 1,421 -- 1,421
Graham stock issuances.............. 1 143 -- -- 144
Net loss for the period ............ -- -- -- (7,383) (7,383)
BALANCE AT MARCH 31, 1995 .......... $ 461 $182,502 $ 1,152 $(140,737) $ 43,378
======== ======== ========= ========= =========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Anacomp, Inc. and Subsidiaries (Debtor-in-possession)
NOTE 1. GENERAL:
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 Report on Form 10-K as of September 30, 1995.
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.
NOTE 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.
Significant Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
<PAGE> 8
Other intangibles, net of accumulated amortization, of $19.5 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. Unamortized deferred software costs remaining as of March
31, 1996 total $5.4 million and are included in "Other Assets" on the
accompanying Condensed Consolidated Balance Sheets.
Income Taxes
Beginning in 1995, Anacomp's practice is to repatriate the income of its
foreign subsidiaries as it is earned. Accordingly, deferred tax is
recorded on foreign income as it is earned.
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.
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
agreements.
<PAGE> 9
Inventories
Inventories are stated at the lower of cost or market, cost being
determined by methods approximating the first-in, first-out basis.
The cost of the inventories is distributed as follows:
<TABLE>
<CAPTION>
March 31, Sept. 30,
(Dollars in thousands) 1996 1995
<S> <C> <C>
Finished goods ..................... $ 30,207 $ 38,702
Work in process .................... 3,487 4,955
Raw materials and supplies ......... 8,841 10,338
$ 42,535 $ 53,995
======== ========
</TABLE>
Debt Issuance Costs
The Company has historically capitalized all costs related to its
issuance of debt and amortized those costs using the effective interest
method over the life of the related debt instruments. During the three
months ended March 31, 1996, the Company wrote-off $11.1 million of debt
issue costs. (See notes 4 & 5). Remaining debt issue costs related to
senior debt of $671,000 at March 31, 1996 are included in "Other Assets"
in the accompanying Condensed Consolidated Balance Sheets.
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 $5.2 million is
being amortized over 15 years. Goodwill, net of accumulated
amortization of $130.8 million is related to the micrographics business
which includes supplies, COM systems, micrographics services and
maintenance services and 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.
<PAGE> 10
NOTE 3. RECENT DEVELOPMENTS:
On May 20, 1996, the U.S. Bankruptcy Court confirmed Anacomp's Plan of
Reorganization ("Plan") clearing the way for the Company to emerge from
Chapter 11 in about two weeks.
Pursuant to the Plan, (i) Anacomp's senior secured debt will be exchanged
for approximately $120.0 million in new 11 5/8% senior secured notes with
a three year-and-a-half year maturity and mandatory sinking fund payments;
(ii) the 15% Senior Subordinated Notes and related accrued interest will
be exchanged for $160.0 million in new 13% Senior Subordinated Notes with
a six year maturity and 92.5% of new common stock to be issued by the
Company; (iii) the 13.875% and 9% Convertible Subordinated Debentures
(the "Subordinated Debentures") and related accrued interest
will be exchanged for 7.5% of the Company's new common stock and warrants
to purchase 2.5% of the new common stock; (iv) the preferred stock and
related accrued dividends will be exchanged for warrants to purchase less
than 1% of the new common stock; and (v) the existing common stock will
be exchanged for warrants to purchase less than 1% of the new common
stock. Under the terms of the Plan, trade creditors will continue to be
paid under normal trade terms.
The process began January 5, 1996, when Anacomp (the "Debtor") filed
a prenegotiated Plan with the U.S. Bankruptcy Court in Delaware under
Chapter 11 of the Bankruptcy Code. The Company was in default
under substantially all of its debt agreements as a result of its failure
to make $89.7 million of principal payments scheduled for April 26, 1995
and October 26, 1995 on the senior secured credit facilities (including
$60.0 million relating to the revolving loan agreement which expired on
October 26, 1995), $11.4 million of principal and interest payments on the
9% Convertible Subordinated Debentures which were due January 15, 1996,
$34.1 million of interest payments scheduled for May 1, 1995 and November
1, 1995 on its Senior Subordinated Notes, and $3.2 million of interest
payments scheduled July 15, 1995 and January 15, 1996 on the 13.875%
Subordinated Debentures, as well as certain financial covenant violations,
and the cross-default provisions of the other debt agreements.
On February 15,1996, after months of discussions and negotiations with
representatives of Anacomp's senior secured lenders and with unofficial
committees representing the 15% Senior Subordinated Notes and the
Subordinated Debentures, the Company announced that it had reached a
consensual agreement-in-principle with all of its major creditor
groups on the terms of a financial restructuring plan to enable
Anacomp's emergence from Chapter 11.
On March 28, 1996, the U.S. Bankruptcy Court approved the Company's
disclosure statement on the financial restructuring plan and gave the
Company permission to distribute the disclosure statement and solicit
votes on the Plan.
Questor Partners Fund, L.P. ("Questor") announced on April 19, 1996 that
it was making a tender offer to purchase 15% to 44% of the new common
stock that the Company will issue when it emerges from Chapter 11
proceedings. The disclosure statement on the financial restructuring
plan contains an estimate of the Company's value after reorganization
ranging from $300.0 million to $400.0 million. The Questor offer of $7.75
a share values the Company within that range. The Company had no other
information relevant to evaluating Questor's tender offer and decided
to express no opinion on whether prospective holders of the new common
stock should accept the offer. On May 17, 1996 Questor announced that
its tender offer had expired that no shares would be accepted for
purchase because the conditions of the offer were not met.
<PAGE> 11
NOTE 4. ACCOUNTING AND REPORTING REQUIREMENTS DURING BANKRUPTCY:
Under Chapter 11 of the Bankruptcy Code, certain claims against the Debtor
in existence prior to the filing of the petitions for relief under the
U.S. bankruptcy laws are stayed while the Debtor continues business
operations as Debtor-in-possession. Under AICPA Statement of Position 90-
7 "Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code," ("SOP 90-7") the Company is required to adjust liabilities subject
to compromise to the amount of the claim allowed by the court. In the
case of Anacomp, only its subordinated debt was adjusted and along with
the related accrued interest reflected as liabilities subject to
compromise. This resulted in a write-off of certain deferred debt
issuance costs and debt discounts of approximately $17.6 million on the
date of the bankruptcy filing. These adjustments are reflected in the
Company's results for the three months ended March 31, 1996. Senior debt
was not included in liabilities subject to compromise as it is fully
secured and not expected to be adjusted in bankruptcy. Accounts payable
was not adjusted as the Company's reorganization plan calls for trade
creditors to be paid in full and because the Bankruptcy Court has allowed
the Company to pay its trade creditors during the proceeding.
In addition, SOP 90-7 requires the Company to report interest expense
during the bankruptcy proceedings only to the extent that it will be paid
during the proceeding or that it is probable to be an allowed priority,
secured, or unsecured claim. Accordingly, the Company recorded interest
expense only for its senior debt subsequent to the bankruptcy filing.
Interest expense and fee amortization for the three and six months ended
March 31, 1996 was $5.5 million and $23.8 million compared to $16.1
million and $34.0 million in the same periods for the prior year. The
difference between the reported interest expense and the contractual
interest expense for the three and six months ended March 31, 1996 is
disclosed in the accompanying Condensed Consolidated Statements of
Operations. The contractual interest disclosure is not comparable to
interest expense in the prior period as the disclosure does not include
amounts for fee and discount amortization.
NOTE 5. REORGANIZATION ITEMS:
In accordance with SOP 90-7, the Condensed Consolidated Statements of
Operations should portray the results of operations of the Company while
it is in Chapter 11. Expenses resulting from the restructuring are
reported separately as reorganization items. In the accompanying
Condensed Consolidated Statements of Operations for the three and six
months ending March 31, 1996, the Company wrote-off $17.6 million of
deferred debt issue costs and debt discounts. Anacomp incurred financial
restructuring costs of $3.1 million and $5.9 million for the three and six
months ending March 31, 1996. The Company also earned interest income of
$236,000 on accumulated cash resulting from Chapter 11 proceedings.
<PAGE> 12
NOTE 6. CONDENSED COMBINED FINANCIAL STATEMENTS:
In accordance with SOP 90-7, Consolidated Financial Statements that
include one or more entities in reorganization proceedings and one or
more entities not in reorganization proceedings should include condensed
combined financial statements of the entities in reorganization
proceedings. Accordingly, the condensed combined financial statements as
of March 31, 1996 of Anacomp, Inc. and certain of its subsidiaries
including Kalvar Microfilm, Inc., Anacomp International N.V., Florida AAC
Corporation, and Xidex Development Company are presented below.
CONDENSED COMBINED BALANCE SHEET (Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands, except per share amounts) Mar. 31,
1996
ASSETS
<S> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . $ 44,641
Accounts and notes receivable . . . . . . . . . . . . . . . 47,819
Current portion of long-term receivables . . . . . . . . . 1,971
Inventories . . . . . . . . . . . . . . . . . . . . . . . . 31,858
Prepaid expenses and other . . . . . . . . . . . . . . . . 4,955
Total current assets . . . . . . . . . . . . . . . . . . . . 131,244
Property and equipment. . . . . . . . . . . . . . . . . . . . 26,940
Long-term receivables, net of current portion . . . . . . . . 5,137
Excess of purchase price over net assets of businesses
acquired and other intangibles, net. . . . . . . . . . . . . 152,041
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . 53,578
$368,940
========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES NOT SUBJECT TO COMPROMISE:
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . $116,266
Accounts payable . . . . . . . . . . . . . . . . . . . . . 49,581
Other accrued liabilities . . . . . . . . . . . . . . . . . 65,175
Total current liabilities . . . . . . . . . . . . . . . . . . 231,022
Long-term debt, net of current portion. . . . . . . . . . . . --
Other noncurrent liabilities. . . . . . . . . . . . . . . . . 3,144
Total noncurrent liabilities. . . . . . . . . . . . . . . . . 3,144
LIABILITIES SUBJECT TO COMPROMISE:
Current Portion of long-term debt. . . . . . . . . . . . . . 258,611
Accrued Interest . . . . . . . . . . . . . . . . . . . . . . 46,838
305,449
Redeemable preferred stock including accrued dividends. . . . 21,340
Stockholders' equity (deficit):
Common stock. . . . . . . . . . . . . . . . . . . . . . . . 480
Capital in excess of par value. . . . . . . . . . . . . . . 187,512
Cumulative translation adjustment . . . . . . . . . . . . . --
Accumulated deficit . . . . . . . . . . . . . . . . . . . . (380,007)
Total stockholders' equity (deficit). . . . . . . . . . . . . (192,015)
$368,940
========
</TABLE>
<PAGE> 13
CONDENSED COMBINED STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
(Dollars in thousands, except per share amounts) March 31, March 31,
1996 1996
<S> <C> <C>
Revenues. . . . . . . . . . . . . . . . . . . . . $ 89,288 $185,598
Operating costs and expenses. . . . . . . . . . . 76,137 159,613
Income before interest, other income,
reorganization items and income taxes . . . . . 13,151 25,985
Interest and other income (expense), net. . . . . (5,066) (16,320)
Income before reorganization
items and income taxes. . . . . . . . . . . . . 8,085 9,665
Reorganization Items. . . . . . . . . . . . . . . (20,450) (23,251)
Loss before income taxes . . . . . . . . . . . . (12,365) (13,586)
Provision for income taxes. . . . . . . . . . . . -- --
Net loss . . . . . . . . . . . . . . . . . . . . (12,365) (13,586)
Preferred stock dividends and discount accretion. -- 540
Net loss available to common stockholders . . . . $(12,365) $(14,126)
======== ========
Net loss per common and common equivalent share . $ (.26) $ (.30)
======== ========
</TABLE>
<PAGE> 14
CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE> <CAPTION>
Six months ended
(Dollars in thousands) March 31,
1996
<S> <C>
Cash flows from operating activities:
Net loss ..................................................... $(13,586)
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization............................... 12,569
Gain on disposition of other assets......................... (398)
Gain on sale of ICS Division................................ (6,202)
Change in assets and liabilities, net....................... 22,439
Net cash provided by operating activities before
reorganization items................................ 14,822
Operating cash flow from reorganization items............... 23,251
Net cash provided by operating activities............... 38,073
Cash flows from investing activities:
Proceeds from sale of ICS Division............................ 13,554
Purchases of property, plant and equipment.................... (2,350)
Net cash provided by investing activities............... 11,204
Cash flows from financing activities:
Principal payments on long-term debt ......................... (12,495)
Net cash used in financing activities................... (12,495)
Increase in cash and cash equivalents........................... 36,782
Cash and cash equivalents at beginning of period................ 7,859
Cash and cash equivalents at end of period...................... $ 44,641
==========
Supplemental disclosures of cash flow information:
Cash paid (refunded) during the period for:
Interest ..................................................... $ 7,732
Income taxes.................................................. $ (183)
</TABLE>
CONDENSED COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31,1996
Capital in Retained
Common Excess of Earnings
(Dollars in thousands) Stock Par Value (Deficit) Total
<S> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30, 1995 ...... $ 462 $ 182,725 $(365,881) $(182,694)
Preferred stock conversion ......... 7 4,798 -- 4,805
Preferred stock dividends .......... -- -- (516) (516)
Accretion of redeemable preferred
stock discount ................... -- -- (24) (24)
NBS stock issuance.................. 11 (11) -- --
Net loss for the period ............ -- -- (13,856) (13,586)
BALANCE AT MARCH 31, 1996 .......... $ 480 $ 187,512 $(380,007) $(192,015)
======== ========= ========= =========
</TABLE>
<PAGE> 15
NOTE 7. SALE OF ICS DIVISION:
Effective November 1, 1995 Anacomp sold its Image Conversion Services
Division ("ICS") for approximately $13.5 million which resulted in a net
gain to the Company of $6.2 million. The proceeds from this sale were
used to reduce the principal balance on certain senior debt. The ICS
Division performed source document microfilm services at several
facilities around the country generating approximately $20.0 million of
revenues per year.
NOTE 8. INCOME TAXES:
Income tax expense is reported for the six months ended March 31, 1996,
based on the actual effective tax for the interim period as the Company
believes this rate is the best estimate of the effective tax rate for the
year ended September 30, 1996. Also for the six months ended March 31,
1996, the U.S. Federal tax benefit of the domestic loss was offset by a
corresponding increase to the valuation allowance. Accordingly, the
income tax provision for 1996 relates entirely to foreign taxes.
At March 31, 1996, the Company had U.S. Federal net operating loss
carryforwards ("NOLS") of approximately $222.0 million available to offset
future taxable income. These NOLS will be used to offset approximately
$67.0 million of income from cancellation of indebtedness in connection
with the Company's Chapter 11 bankruptcy reorganization. In the future,
usage of these NOLS will be limited to approximately $4.0 million
annually. However, the Company may authorize the use of other tax
planning techniques to utilize a portion of the remaining NOLS before they
expire. In any event, the Company expects that substantial amounts of the
NOLS will expire unused.
NOTE 9. EARNINGS (LOSS) PER SHARE:
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. Under the reorganization plan as proposed, current
shareholder ownership interest will be significantly diluted as more fully
discussed in Note 3.
Fully diluted earnings (loss) per share are the same as primary earnings
per share for the periods presented.
<PAGE> 16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Recent Developments
On May 20, 1996, the U.S. Bankruptcy Court confirmed Anacomp's Plan of
Reorganization ("Plan") clearing the way for the Company to emerge from
Chapter 11 in about two weeks.
Pursuant to the Plan, (i) Anacomp's senior secured debt will be exchanged
for approximately $120.0 million in new 11 5/8% senior secured notes with
a three year-and-a-half year maturity and mandatory sinking fund payments;
(ii) the 15% Senior Subordinated Notes and related accrued interest will
be exchanged for $160.0 million in new 13% Senior Subordinated Notes with
a six year maturity and 92.5% of new common stock to be issued by the
Company; (iii) the 13.875% and 9% Convertible Subordinated Debentures
(the "Subordinated Debentures") and related accrued interest
will be exchanged for 7.5% of the Company's new common stock and warrants
to purchase 2.5% of the new common stock; (iv) the preferred stock and
related accrued dividends will be exchanged for warrants to purchase less
than 1% of the new common stock; and (v) the existing common stock will
be exchanged for warrants to purchase less than 1% of the new common
stock. Under the terms of the Plan, trade creditors will continue to be
paid under normal trade terms.
The process began January 5, 1996, when Anacomp (the "Debtor") filed
a prenegotiated Plan with the U.S. Bankruptcy Court in Delaware under
Chapter 11 of the Bankruptcy Code. The Company was in default
under substantially all of its debt agreements as a result of its failure
to make $89.7 million of principal payments scheduled for April 26, 1995
and October 26, 1995 on the senior secured credit facilities (including
$60.0 million relating to the revolving loan agreement which expired on
October 26, 1995), $11.4 million of principal and interest payments on the
9% Convertible Subordinated Debentures which were due January 15, 1996,
$34.1 million of interest payments scheduled for May 1, 1995 and November
1, 1995 on its Senior Subordinated Notes, and $3.2 million of interest
payments scheduled July 15, 1995 and January 15, 1996 on the 13.875%
Subordinated Debentures, as well as certain financial covenant violations,
and the cross-default provisions of the other debt agreements.
On February 15,1996, after months of discussions and negotiations with
representatives of Anacomp's senior secured lenders and with unofficial
committees representing the 15% Senior Subordinated Notes and the
Subordinated Debentures, the Company announced that it had reached a
consensual agreement-in-principle with all of its major creditor
groups on the terms of a financial restructuring plan to enable
Anacomp's emergence from Chapter 11.
On March 28, 1996, the U.S. Bankruptcy Court approved the Company's
disclosure statement on the financial restructuring plan and gave the
Company permission to distribute the disclosure statement and solicit
votes on the Plan.
Questor Partners Fund, L.P. ("Questor") announced on April 19, 1996 that
it was making a tender offer to purchase 15% to 44% of the new common
stock that the Company will issue when it emerges from Chapter 11
proceedings. The disclosure statement on the financial restructuring
plan contains an estimate of the Company's value after reorganization
ranging from $300.0 million to $400.0 million. The Questor offer of $7.75
a share values the Company within that range. The Company had no other
information relevant to evaluating Questor's tender offer and decided
to express no opinion on whether prospective holders of the new common
stock should accept the offer. On May 17, 1996 Questor announced that
its tender offer had expired and that no shares would be accepted for
purchase because the conditions of the offer were not met.
<PAGE> 17
Three Months Ended March 31, 1996 Compared to the
Three Months Ended March 31, 1995
Results of Operations
General
Anacomp incurred a net loss available to common shareholders of $10.7 million
for the three months ended March 31, 1996 compared to a loss of $8.2 million
for the three months ended March 31, 1995. Operating income (income before
interest, other income, reorganization items, and income taxes) was $17.3
million compared to $13.0 million for the same period of the prior year (13.7%
and 8.6% as a percentage of total revenues, respectively). Earnings before
interest, other income, reorganization items, and taxes plus depreciation
and amortization ("EBITDA") was $23.7 million compared to $21.6 million
for the same period of the prior year. Offsetting the strong second
quarter operating income was $20.5 million of reorganization items,
including a write-off of deferred debt issue costs and discounts of
$17.6 million and financial restructuring costs of $3.1 million.
Total revenues for the second quarter of $125.9 million represent a $25.6
million decrease from the second quarter of the prior year. Approximately
$17.1 million of the decrease is due to the discontinuance or downsizing of
certain product lines including Image Conversion Services ("ICS") ($5.3
million), flexible diskette media ($6.4 million), reader and reader printer
products ($3.3 million) and source document film ($2.1 million).
Costs of services provided as a percent of services revenue were 55% for both
the three months ended March 31, 1996 and the three months ended March 31,
1995. Costs of equipment and supplies sold as a percent of equipment and
supplies sales were 76% for the three months ended March 31, 1996 compared to
73% in the same period of the prior year. The increase in cost of equipment
and supplies sold is due to product mix and increased costs of raw materials.
Selling, general and administrative expenses were 18% of revenue for the three
months ended March 31, 1996 compared to 25% for the same period of the prior
year. This represents a decrease of $14.4 million which is consistent with
the cost reductions contemplated in Anacomp's revised business plan.
Reorganization Adjustments
Under Chapter 11 of the Bankruptcy Code, certain claims against the Debtor in
existence prior to the filing of the petitions for relief under the U.S.
bankruptcy laws are stayed while the Debtor continues business operations as
Debtor-in-possession. Under AICPA Statement of Position 90-7 "Financial
Reporting by Entities in Reorganization Under the Bankruptcy Code," ("SOP 90-
7") the Company is required to adjust liabilities subject to compromise to the
amount of the claim allowed by the court. In the case of Anacomp, only its
subordinated debt was adjusted and along with the related accrued interest
reflected as liabilities subject to compromise. This resulted in a write-off
of certain deferred debt issuance costs and debt discounts of approximately
$17.6 million on the date of the bankruptcy filing. These adjustments are
reflected in the Company's results for the three months ended March 31, 1996.
Senior debt was not included in liabilities subject to compromise as it is
fully secured and not expected to be adjusted in bankruptcy. Accounts payable
was not adjusted as the Company's reorganization plan calls for trade
creditors to be paid in full and because the Bankruptcy Court has allowed the
Company to pay its trade creditors during the proceeding.
<PAGE> 18
In addition, SOP 90-7 requires the Company to report interest expense during
the bankruptcy proceedings only to the extent that it will be paid during the
proceeding or that it is probable to be an allowed priority, secured, or
unsecured claim. Accordingly, the Company recorded interest expense only for
its senior debt subsequent to the bankruptcy filing. Interest expense and fee
amortization for the three months ended March 31, 1996 was $5.5 million
compared to $16.1 million in the same period for the prior year. The
difference between the reported interest expense and the contractual interest
expense for the three months ended March 31, 1996 is disclosed in the
accompanying Condensed Consolidated Statements of Operations. The contractual
interest disclosure its not comparable to interest expense in the prior period
as the disclosure does not include amounts for fee and discount amortization.
Products and Services
Micrographics services revenues decreased $1.9 million for the three months
ended March 31, 1996 compared to the same three months of fiscal 1995,
excluding the effect of the ICS sale. COM services volumes, which comprise
over 90% of this category, decreased 9% and average selling prices decreased
approximately 1%. The decrease in volume and pricing is the continuation of a
trend that the Company has experienced over recent periods. Gross margins as
a percent of revenue were unchanged.
Maintenance service revenues decreased $1.0 million 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. Gross
margins as a percent of revenue decreased slightly.
COM systems revenues for the three months ended March 31, 1996 decreased
$400,000 compared to the same period of the prior year. The Company sold or
leased 23 XFP 2000 COM systems to third party users in the current period
compared to 30 systems in the same period of the prior year. The Company
believes the reduced systems sales is, at least in part, due to customer
concerns regarding Anacomp's financial restructuring. Gross margins as a
percent of revenue increased for the quarter compared to the prior period, due
to higher selling prices.
Micrographics supplies and equipment revenues for the three months ended March
31, 1996 decreased $11.0 million compared to the same period of the prior
year, principally as a result of the discontinuance or downsizing of product
lines mentioned above. Micrographics supplies and equipment gross margins as
a percent of revenue improved 3% as a result of changes in product mix due
primarily to the sale and downsizing of product lines.
Magnetics revenues decreased $5.8 million for the three months ended March 31,
1996 compared to the same three months of fiscal 1995. The decline is
attributable to the closure of the Omaha, Nebraska factory which produced
flexible diskette media as well as decreased unit sales of open reel tape.
Magnetics gross margins as a percent of revenue decreased in the
current period principally due to increased costs of raw materials.
<PAGE> 19
Six Months Ended March 31, 1996 Compared With
Six Months Ended March 31, 1995
Results of Operations
General
Anacomp incurred a loss of $10.2 million for the six months ended March 31,
1996, compared to a loss of $8.5 million for the comparable period of the
prior year. Included in the year-to-date loss for the six months ended March
31, 1996 was $23.3 million of reorganization items, including a write-off of
deferred debt issue costs and discounts of $17.6 million and restructuring
costs of $5.9 million. Operating income (income before interest, other
income, reorganization items and income taxes) increased $2.6 million compared
to the same period of the prior year. As a percentage of total revenues,
operating income was 13.1% for fiscal 1996 and 10.2% for fiscal 1995.
EBITDA was $46.9 million compared to $50.0 million for the same period
in the prior year.
Total revenues for the six months ended March 31, 1996 decreased $47.1 million
over the same period of the prior year. The decrease is primarily due to the
discontinuance or downsizing of certain product lines including ICS ($8.5
million), flexible diskette media ($9.8 million), reader and reader printer
products ($5.4 million) and source document film ($3.5 million).
Costs of services provided as a percent of services revenue were 55% for both
the six months ended March 31, 1996 and the six months ended March 31, 1995.
Costs of equipment and supplies sold as a percent of equipment and
supplies sales were 77% in the current period compared to 74% in the same
period of the prior year. The increase in cost of equipment and supplies sold
is primarily due to product mx and increased costs of raw materials.
Selling, general and administrative expenses were 19% of revenue in the
current period compared to 23% in the same period of the prior year. The
decrease of $21.2 million is reflective of the cost reductions the Company has
been implementing over the past year and is consistent with the cost
reductions contemplated in the Company's revised business plan.
Interest expense and fee amortization was $23.8 million for the six months
ended March 31, 1996 compared to $34.0 million in the prior period. The
decrease in interest expenses relates to the discontinuance of interest
accrued on the Company's subordinated debt subsequent to the bankruptcy
proceedings.
Other income for the first six months of fiscal 1996 includes a $6.2 million
gain on the sale of the ICS Division in November 1995. This compares
favorably to a $630,000 loss on the sale of an idle facility in the first six
months of fiscal 1995.
<PAGE> 20
Products and Services
Micrographics services revenues decreased $3.7 million in the first six months
of fiscal 1996 compared to the same six months of fiscal 1995 excluding the
effect of ICS sale. COM services volumes decreased 8%, and average selling
prices decreased approximately 1%. The decrease in volume and pricing is a
continuation of a trend that the Company has experienced over recent periods.
Operating margins as a percent of revenue decreased slightly as the reduction
in selling prices exceeded reductions in production costs.
Maintenance service revenues decreased $1.4 million, 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. Gross
margins as a percent of revenue were unchanged.
COM systems revenues for the first six months of fiscal 1996 decreased $8.4
million compared to the same period of the prior year. The Company sold or
leased 51 XFP 2000 COM systems to third party users in the current period
compared to 76 systems in the same period of the prior year. The first six
months of fiscal 1995 included $3.5 million of sales of equipment for Anacomp
data centers under sale and leaseback arrangements compared to zero in the
current period. Gross margins as a percent of revenue were unchanged.
Micrographics supplies and equipment revenues for the first six months
decreased $16.3 million compared to the same period of the prior year,
primarily as a result of the discontinuance and downsizing of product lines
mentioned above. Micrographics supplies and equipment gross margins as a
percent of revenue increased 2%.
Magnetics revenues decreased $10.0 million in the first six months of fiscal
1996 compared to the same six months of fiscal 1995. The decrease is
attributable to the closure of the Omaha, Nebraska factory which produced
flexible diskette media, as well as, reduced sales of open reel tape.
Magnetics gross margins as a percent of revenue decreased 2% period to
period.
<PAGE> 21
Liquidity and Capital Resources
The Company's cash balance as of March 31, 1996 was $49.3 million compared to
$19.4 million at September 30, 1995. The increase in the Company's cash
balance is due primarily to the non-payment of subordinated debt principal and
interest during the bankruptcy proceedings. On the effective date of the
Company's reorganization plan, approximately $25.0 million of cash will be
used to make a $7.5 million paydown against the senior secured notes, certain
professional fees, senior secured debt fees and other trade claims.
Anacomp's working capital at March 31, 1996, excluding the current portion of
long-term debt and accrued interest, amounted to $49.9 million compared to
$27.0 million at September 30, 1995. As discussed above, substantially all of
the accrued interest will be exchanged for new securities under the financial
restructuring plan. As disclosed in the accompanying Condensed Consolidated
Statements of Cash Flows, net cash provided by operating activities increased
to $32.9 million for the six months ended March 31, 1996 compared to $1.9
million in the comparable prior period due, in part, to significant reductions
in receivables and inventories as well as the non-payment of interest on
subordinated debt. Net cash provided by investing activities increased to
$11.0 million in the current period, compared to $5.6 million in the
comparable prior period, primarily as a result of reduced capital
expenditures. Net cash used in financing activities in the current period
include $13.0 million repayment of debt with proceeds from the sale of the ICS
Division.
Prior to the Chapter 11 filing, the Company was experiencing a liquidity
shortfall caused by continued declining revenues and a highly leveraged
balance sheet. Upon consummation of the financial restructuring plan, the
Company's pre-petition liquidity problems will be improved by
deferring principal and interest payments that were due under the
Company's senior secured debt and eliminating a significant portion of the
payment obligations under the 15% Senior Subordinated Notes, all payment
obligations under the Subordinated Debentures and all payment obligations
under the Company's preferred stock. While the Restructuring will
significantly reduce the Company's debt obligations, the Company will
remain highly leveraged after the Effective Date. The Company's management
believes that, following the confirmation of the Plan, the Company will
have sufficient cash flow from operations to pay interest on all of its
outstanding debt as those payments become due. However, the Company's
ability to meet its debt service obligations will depend on a number
of factors, including its ability to achieve the results of the
New Operating Plan.
<PAGE> 22
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 Note 3 to the financial
statements.
<TABLE>
<CAPTION>
PAGE NUMBER
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<S> <C>
(a) Exhibits
(10) Debtor's Second Amended Joint Plan of Reorganization
dated March 28, 1996 incorporated by reference to
Exhibit (a)(2) of Anacomp's Schedule 14D-9 dated
May 3, 1996. (File #1-8328)
(11) Computation of Earnings (loss) per Common
and Common Equivalent Share. 23
(27) Financial Data Schedules.
(Required for electronic filling only)
(b) Reports on Form 8-K
On February 15, 1996, a Form 8-K was filed to announce
that the Company had reached a consensual agreement-in-principle
with its senior secured lenders and the Official Committee
representing its unsecured creditors on a financial
restructuring of the Company.
</TABLE>
<PAGE> 23
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
Executive Vice President and
Chief Financial Officer
Dated this 20th day of May, 1996
<PAGE> 1
<TABLE>
<CAPTION>
EXHIBIT 11
Anacomp, Inc. and Subsidiaries (Debtors-In-Possession)
COMPUTATION OF LOSS PER COMMON AND COMMON EQUIVALENT SHARE (Unaudited)
PRIMARY AND FULLY DILUTED
Three months ended Six months ended
March 31, March 31,
(In thousands, except per share amounts) 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Loss per Common and Common Equivalent Share:
Net loss available to
common stockholders.................. $(10,731) $(8,203) $(10,218) $(8,462)
======== ======= ======== =======
Shares:
Weighted average common shares
outstanding .......................... 47,281 46,045 46,751 45,944
Adjustments:
Assumed issuances under
acquisition contingencies................ 333 -- 333 --
Total shares ............................. 47,614 46,045 47,084 45,944
======= ======= ======= =======
Loss per common and common
equivalent share ....................... $ (.23) $ (.18) $ (.22) $ (.18)
======= ======= ======= =======
</TABLE>
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, 1996 FORM 10-Q QUARTERLY REPORT AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 49,259
<SECURITIES> 0
<RECEIVABLES> 72,894
<ALLOWANCES> 6,968
<INVENTORY> 42,535
<CURRENT-ASSETS> 176,780
<PP&E> 120,018
<DEPRECIATION> 83,355
<TOTAL-ASSETS> 391,991
<CURRENT-LIABILITIES> 178,910
<BONDS> 381,230
0
21,340
<OTHER-SE> (195,037)
<TOTAL-LIABILITY-AND-EQUITY> 391,991
<SALES> 156,986
<TOTAL-REVENUES> 256,176
<CGS> 120,574
<TOTAL-COSTS> 222,694
<OTHER-EXPENSES> 15,675
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,785
<INCOME-PRETAX> (5,978)
<INCOME-TAX> 3,700
<INCOME-CONTINUING> (9,678)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,218)
<EPS-PRIMARY> (.22)
<EPS-DILUTED> (.22)
</TABLE>
