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 quarterly period ended June 30, 1997
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 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
Indicate by check mark whether the registrant has filed all reports required to
be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
YES X NO
The number of shares outstanding of the Common Stock of the registrant on June
30, 1997, the close of the period covered by this report, was 13,702,464.
<PAGE>
ANACOMP, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
June 30, 1997 and September 30, 1996............................... 3
Condensed Consolidated Statements of Operations
Three and Nine Months Ended June 30, 1997,
One Month Ended June 30, 1996 and Two and Eight Months Ended May 31,
1996............................................................... 4
Condensed Consolidated Statements of Cash Flows
Nine Months Ended June 30, 1997, One Month Ended June 30, 1996 and
Eight Months Ended May 31, 1996.................................... 6
Condensed Consolidated Statements of Stockholders' Equity
Nine Months Ended June 30, 1997, One Month Ended June 30, 1996 and
Eight Months Ended May 31, 1996.................................... 8
Notes to Condensed Consolidated Financial Statements............... 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...................... 15
PART II. OTHER INFORMATION
Item 2. Changes in Securities............................................. 21
Item 6. Exhibits and Reports on Form 8-K.................................. 21
SIGNATURES................................................................. 22
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
Anacomp, Inc. And Subsidiaries
<TABLE>
<CAPTION>
June 30, September 30,
(Dollars in thousands, except per share amounts) 1997 1996
--------------------------------------------------------------------- ------------------ -----------------
ASSETS (unaudited)
Current assets:
<S> <C> <C>
Cash and cash equivalents.................................... $ 40,340 $ 38,198
Restricted cash.............................................. 9,666 9,597
Accounts and notes receivable, less allowances for doubtful
accounts of $6,364 and $6,768, respectively................ 60,079 58,806
Current portion of long-term receivables..................... 3,559 4,690
Inventories.................................................. 27,106 31,856
Prepaid expenses and other................................... 6,887 4,383
------------------ -----------------
Total current assets............................................. 147,637 147,530
Property and equipment, at cost less accumulated
depreciation and amortization.................................. 28,382 27,102
Long-term receivables, net of current portion.................... 7,019 10,632
Excess of purchase price over net assets of businesses
acquired and other intangibles, net............................ 15,581 2,285
Reorganization value in excess of identifiable assets............ 182,154 240,344
Other assets..................................................... 15,634 7,528
================== =================
$396,407 $435,421
================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Current portion of long-term debt............................ $ 6,365 $ 31,848
Accounts payable............................................. 38,353 48,090
Accrued compensation, benefits and withholdings.............. 14,189 13,728
Accrued income taxes......................................... 9,972 11,930
Accrued interest............................................. 10,263 10,586
Other accrued liabilities.................................... 36,593 36,814
------------------ -----------------
Total current liabilities........................................ 115,735 152,996
------------------ -----------------
Noncurrent liabilities:
Long-term debt, net of current portion....................... 248,554 217,044
Other noncurrent liabilities................................. 4,250 6,812
------------------ -----------------
Total noncurrent liabilities..................................... 252,804 223,856
------------------ -----------------
Stockholders' equity:
Preferred stock, 1,000,000 shares authorized, none issued.... -- --
Common stock, $.01 par value; 20,000,000 shares authorized;
13,702,464 and 10,099,050 issued respectively............ 137 101
Capital in excess of par value............................... 104,559 80,318
Cumulative translation adjustment from May 31, 1996.......... (823) 159
Accumulated deficit from May 31, 1996........................ (76,005) (22,009)
------------------ -----------------
Total stockholders' equity....................................... 27,868 58,569
================== =================
$396,407 $435,421
================== =================
See notes to condensed consolidated financial statements
</TABLE>
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Anacomp, Inc. And Subsidiaries
<TABLE>
<CAPTION>
Predecessor
Reorganized Company Company
------------------------------------ ----------------
Three Months One Month Two Months
Ended Ended Ended
June 30, June 30, May 31,
(Amounts in thousands, except per share amounts) 1997 1996 1996
- ---------------------------------------------------------------------- ----------------- ------------------ ----------------
Revenues:
<S> <C> <C> <C>
Services provided............................................. $ 46,690 $ 14,351 $ 31,012
Equipment and supply sales.................................... 67,351 22,435 47,410
----------------- ------------------ ----------------
114,041 36,786 78,422
----------------- ------------------ ----------------
Operating costs and expenses:
Costs of services provided................................... 24,400 7,757 17,890
Costs of equipment and supplies sold......................... 51,859 17,134 36,629
Selling, general and administrative expenses................. 22,630 5,702 15,780
Amortization of reorganization asset......................... 18,973 6,416 --
-----------------
------------------ ----------------
117,862 37,009 70,299
-----------------
------------------ ----------------
Income (loss) from operations before interest, other income,
reorganization items, income taxes and extraordinary items..... (3,821) (223) 8,123
----------------- ------------------ ----------------
Interest income.................................................. 1,058 57 644
Interest expense and fee amortization............................ (8,436) (2,920) (2,975)
Reorganization items............................................. -- -- 116,090
Other income (loss).............................................. (357) 14 324
------------------ ----------------
-----------------
(7,735) (2,849) 114,083
----------------- ------------------ ----------------
Income (loss) before income taxes and extraordinary items........ (11,556) (3,072) 122,206
Provision for income taxes....................................... 3,300 1,300 --
----------------- ------------------ ----------------
Net income (loss) before extraordinary items..................... (14,856) (4,372) 122,206
Extraordinary Items:
Extraordinary gain on discharge of indebtedness, net of taxes.. -- -- 52,442
Extraordinary loss on extinguishment of debt, additional tax
benefit recognized (Note 4) ................................. 875 -- --
----------------- ------------------ ----------------
================= ------------------ ================
Net income (loss) available to common stockholders............... $ (13,981) $ (4,372) $ 174,648
================= ------------------ ================
Weighted average common shares outstanding....................... 13,701 10,000
================= ------------------
Earnings (loss) per common and common equivalent share:
Net income (loss) available to common stockholders before
extraordinary items............................................ $(1.08) $(.44)
Extraordinary loss on extinguishment of debt (additional tax benefit)
.06 --
----------------- ------------------
Net income (loss) available to common stockholders............... $(1.02) $(.44)
================= ------------------
See notes to condensed consolidated financial statements
</TABLE>
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Anacomp, Inc. And Subsidiaries
<TABLE>
<CAPTION>
Predecessor
Reorganized Company Company
------------------------------------ -----------------
Nine Months One Month Eight Months
Ended Ended Ended
June 30, June 30, May 31,
(Amounts in thousands, except per share amounts) 1997 1996 1996
- ----------------------------------------------------------------------- ----------------- ------------------ -----------------
Revenues:
<S> <C> <C> <C>
Services provided............................................. $ 139,435 $ 14,351 $ 130,202
Equipment and supply sales.................................... 205,579 22,435 204,396
----------------- ------------------ -----------------
345,014 36,786 334,598
----------------- ------------------ -----------------
Operating costs and expenses:
Costs of services provided................................... 73,345 7,757 72,641
Costs of equipment and supplies sold......................... 153,672 17,134 156,526
Selling, general and administrative expenses................. 66,051 5,702 63,826
Amortization of reorganization asset......................... 56,937 6,416 --
-----------------
------------------ -----------------
350,005 37,009 292,993
-----------------
------------------ -----------------
Income (loss) from operations before interest, other income,
reorganization items, income taxes and extraordinary items..... (4,991) (223) 41,605
----------------- ------------------ -----------------
Interest income.................................................. 3,181 57 1,576
Interest expense and fee amortization............................ (27,974) (2,920) (26,760)
Reorganization items............................................. -- -- 92,839
Other income (loss).............................................. (1,152) 14 6,968
------------------ -----------------
-----------------
(25,945) (2,849) 74,623
----------------- ------------------ -----------------
Income (loss) before income taxes and extraordinary items........ (30,936) (3,072) 116,228
Provision for income taxes....................................... 11,400 1,300 3,700
----------------- ------------------ -----------------
Net income (loss) before extraordinary items..................... (42,336) (4,372) 112,528
Extraordinary Items:
Extraordinary gain on discharge of indebtedness, net of taxes.. -- -- 52,442
Extraordinary loss on extinguishment of debt, net of
income tax benefit of $5,200....................... (11,661) -- --
----------------- ------------------ -----------------
Net income (loss)................................................ (53,997) (4,372) 164,970
Preferred stock dividends and discount accretion................. -- -- 540
Net income (loss) available to common stockholders............... $ (53,997) $ (4,372) $ 164,430
================= ------------------ =================
Weighted average common shares outstanding....................... 13,323 10,000
================= ------------------
Earnings (loss) per common and common equivalent share:
Net income (loss) available to common stockholders before
extraordinary items............................................ $(3.18) $(.44)
Extraordinary loss on extinguishment of debt (net of tax benefit) (.87) --
================= ------------------
Net income (loss) available to common stockholders............... $(4.05) $(.44)
=================
==================
See notes to condensed consolidated financial statements
</TABLE>
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Anacomp, Inc. And Subsidiaries
<TABLE>
<CAPTION>
Predecessor
Reorganized Company Company
------------------------------------ -----------------
Nine Months One Month Eight Months
Ended Ended Ended
June 30, June 30, May 31,
(Dollars in thousands) 1997 1996 1996
- ----------------------------------------------------------------------- ------------------ ----------------- -----------------
Cash flows from operating activities:
<S> <C> <C> <C>
Net income (loss)............................................. $(53,997) $ (4,372) $ 164,970
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization.............................. 68,605 7,471 18,788
Extraordinary gain on discharge of indebtedness............ -- -- (52,442)
Extraordinary loss on extinguishment of debt............... 11,661 -- --
Non-cash compensation...................................... 761 -- --
Non-cash charge in lieu of taxes........................... 6,453 -- --
Non-cash reorganization items.............................. -- -- (107,352)
Gain on sale of ICS Division............................... -- -- (6,202)
Other non-cash items....................................... 310 649 997
Restricted cash requirements................................... (69) (253) (6,842)
Changes in assets and liabilities, net of acquisitions:
Decrease in accounts and long-term receivables............. 5,152 3,175 24,734
Decrease in inventories and prepaid expenses............... 5,614 2,433 11,174
Decrease (increase) in other assets........................ (1,233) (36) 1,094
Decrease in accounts payable and accrued expenses.......... (5,235) (15,725) (5,077)
Decrease in other noncurrent liabilities................... (2,516) (172) (5,899)
------------------ ----------------- -----------------
Net cash provided by (used in) operating activities..... 35,506 (6,830) 37,943
------------------ ----------------- -----------------
Cash flows from investing activities:
Proceeds from sale of ICS Division............................. -- -- 13,554
Purchases of property, plant and equipment..................... (8,131) (519) (3,599)
Payments to acquire companies and customer rights.............. (17,453) -- --
------------------ ----------------- -----------------
Net cash provided by (used in) investing activities (25,584) (519) 9,955
------------------ ----------------- -----------------
Cash flows from financing activities:
Proceeds from exercise of common stock rights.................. 24,271 -- --
Proceeds from exercise of stock options........................ 6 -- --
Proceeds from revolving line of credit and long-term borrowings 251,414 -- 2,656
Principal payments on long-term debt........................... (271,274) (8,302) (15,332)
Payments related to the issuance and extinguishment of debt.... (12,259) -- --
------------------ ----------------- -----------------
Net cash used in financing activities................... (7,842) (8,302) (12,676)
------------------ ----------------- -----------------
Effect of exchange rates on cash................................. 62 50 691
------------------ ----------------- -----------------
Increase (decrease) in cash and cash equivalents................. 2,142 (15,601) 35,913
Cash and cash equivalents at beginning of period................. 38,198 55,328 19,415
================== ----------------- =================
Cash and cash equivalents at the end of the period............... $ 40,340 $ 39,727 $ 55,328
================== ----------------- =================
See notes to condensed consolidated financial statements
</TABLE>
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Anacomp, Inc. and Subsidiaries
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
<TABLE>
<CAPTION>
Predecessor
Reorganized Company Company
------------------------------------ -----------------
Nine Months One Month Eight Months
Ended Ended Ended
June 30, June 30, May 31,
(Dollars in thousands) 1997 1996 1996
- ----------------------------------------------------------------------- ------------------ ----------------- -----------------
Cash paid during the period for:
<S> <C> <C> <C>
Interest....................................................... $ 8,568 $ 699 $ 11,613
Income taxes................................................... $ 5,078 $ 42 $ 1,606
</TABLE>
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
<TABLE>
<CAPTION>
Predecessor
Reorganized Company Company
------------------------------------ -----------------
Nine Months One Month Eight Months
Ended Ended Ended
June 30, June 30, May 31,
(Dollars in thousands) 1997 1996 1996
- ----------------------------------------------------------------------- ------------------ ----------------- -----------------
<S> <C> <C> <C>
Assets acquired by assuming liabilities.......................... $ 1,553 $ -- $ --
Interest on subordinated notes satisfied with additional notes... $11,960 $ -- $ --
See notes to condensed consolidated financial statements
</TABLE>
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
Anacomp, Inc. and Subsidiaries
<TABLE>
<CAPTION>
NINE MONTHS ENDED JUNE 30, 1997 - REORGANIZED COMPANY
Capital in Cumulative
Common excess of Translation Accumulated
(Dollars in thousands) Stock par value Adjustment Deficit Total
- ---------------------------------------------- --------------- -------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30, 1996 $101 $ 80,318 $ 159 $(22,009) $58,569
Common stock issued for exercise of rights 36 24,235 -- -- 24,271
Exercise of stock options.................. -- 6 -- -- 6
Translation adjustments for period......... -- -- (982) -- (982)
Other...................................... -- -- -- 1 1
Net loss for the period.................... -- -- -- (53,997) (53,997)
=============== ============== =============== =============== =============
BALANCE AT JUNE 30, 1997 $137 $104,559 $(823) $(76,005) $27,868
=============== ============== =============== =============== =============
</TABLE>
ONE MONTH ENDED JUNE 30, 1996 - REORGANIZED COMPANY
<TABLE>
<CAPTION>
Capital in Cumulative
Common excess of Translation Accumulated
(Dollars in thousands) Stock par value Adjustment Deficit Total
- ---------------------------------------------- --------------- -------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT MAY 31, 1996 $100 $79,666 $ -- $ -- $79,766
Translation adjustments for period......... -- -- 324 -- 324
Net loss for the period.................... -- -- -- (4,372) (4,372)
=============== ============== =============== =============== =============
BALANCE AT JUNE 30, 1996 $100 $79,666 $324 $(4,372) $75,718
=============== ============== =============== =============== =============
</TABLE>
EIGHT MONTHS ENDED MAY 31, 1996 - PREDECESSOR COMPANY
<TABLE>
<CAPTION>
Capital in Cumulative
Common excess of Translation Accumulated
(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................. 11 7,893 -- -- 7,904
Preferred stock dividends.................. -- -- -- (516) (516)
Accretion of redeemable preferred stock
discount............................... -- -- -- (24) (24)
Translation adjustments for period........ -- -- (1,560) -- (1,560)
NBS stock issuance......................... 11 (11) -- -- --
Reorganization............................. (484) (190,607) 231 208,329 17,469
New stock issuance......................... 100 79,666 -- -- 79,766
Net income for the period.................. -- -- -- 164,970 164,970
=============== ============== =============== =============== =============
BALANCE AT MAY 31, 1996 $100 $79,666 $ -- $ -- $ 79,766
=============== ============== =============== =============== =============
See notes to condensed consolidated financial statements
</TABLE>
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Anacomp, Inc. and Subsidiaries
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 for the fiscal year ended
September 30, 1996.
In the opinion of management, the accompanying interim Condensed
Consolidated 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 the interim
periods presented. Certain amounts in the prior interim consolidated
financial statements have been reclassified to conform to the current
period presentation.
Due to the Company's Reorganization and implementation of Fresh Start
Reporting, The Condensed Consolidated Financial Statements for the new
Reorganized Company (period starting May 31, 1996) are not comparable
to those of the Predecessor Company. For financial reporting purposes,
the effective date of the Reorganized Company's emergence from
bankruptcy is considered to be the close of business on May 31, 1996.
A black line has been drawn on the accompanying Condensed Consolidated
Financial Statements to distinguish between the Reorganized Company and
the Predecessor Company.
NOTE 2. FRESH START REPORTING AND BANKRUPTCY REORGANIZATION:
As of May 31, 1996, the Company adopted Fresh Start Reporting in
accordance with the American Institute of Certified Public Accountant's
Statement of Position 90-7 "Financial Reporting by Entities in
Reorganization under the Bankruptcy Code" ("SOP 90-7"). Fresh Start
Reporting resulted in material changes to the Condensed Consolidated
Balance Sheet, including valuation of assets, intangible assets
(including goodwill) and liabilities at fair market value and valuation
of equity based on the appraised reorganization value of the ongoing
business.
As a result of the Bankruptcy Reorganization, the Predecessor Company
recorded an extraordinary gain resulting from the discharge of
indebtedness of $52.4 million calculated as follows:
<TABLE>
<CAPTION>
May 31, 1996
(Dollars in thousands)
------------------------
<S> <C>
Historical carrying value of old debt securities ............... $379,256
Historical carrying value of related accrued interest........... 48,500
Unamortized portion of old deferred financing costs............. (600)
Market value of consideration exchanged for the old debt:
Plan securities (face value $279,692)................... (265,948)
New common stock (10.0 million new shares issued)....... (79,766)
-----------------------
81,442
Tax provision........................................ (29,000)
-----------------------
Extraordinary gain .................................. $ 52,442
=======================
</TABLE>
In accordance with SOP 90-7, expenses of the Predecessor Company
resulting from the Chapter 11 Reorganization are reported separately as
reorganization items in the accompanying Consolidated Statements of
Operations, and are summarized below:
<TABLE>
<CAPTION>
Two Months Eight Months
Ended Ended
(Dollars in thousands) May 31, 1996 May 31, 1996
---------------------------------------------------------------------- ------------------ -----------------
<S> <C> <C>
Write-off of deferred debt issue costs and discounts............ $ -- $(17,551)
Adjustment of assets and liabilities to fair market value....... 124,903 124,903
Legal and professional fees associated with bankruptcy.......... (9,008) (14,944)
Interest earned on accumulated cash............................. 195 431
------------------ -----------------
$116,090 $ 92,839
================== =================
</TABLE>
The following unaudited Pro Forma condensed Financial Information for
the nine months ended June 30, 1996 has been prepared giving effect to
the sale of the Image Conversion Services ("ICS") Division and the
consummation of the Reorganization, including adjustments to interest
expense and intangible asset amortization. The Condensed Financial
Information was prepared as if the Pro Forma adjustments had occurred
on October 1, 1995. This information does not purport to be indicative
of the results which would have been obtained had such transactions in
fact been completed as of the date hereof and for the periods presented
or that may be obtained in the future.
<TABLE>
<CAPTION>
Pro Forma
Nine Months Ended
(Dollars in thousands) June 30, 1996
---------------------------------------------------------------------- -------------------------
<S> <C>
Total revenues.................................................. $369,881
Operating costs and expenses.................................... 373,568
-------------------------
Loss before interest, other income, reorganization items, income
taxes and extraordinary credit.................................. (3,687)
Interest Expense and fee amortization........................... (30,805)
Other........................................................... (1,285)
-------------------------
Net loss available to common......................... $(35,777)
=========================
</TABLE>
NOTE 3. COMPONENTS OF CERTAIN BALANCE SHEET ACCOUNTS:
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>
June 30, September 30,
(Dollars in thousands) 1997 1996
----------------------------------------------------------- ------------------- -----------------
<S> <C> <C>
Finished goods....................................... $16,712 $22,557
Work in process...................................... 3,867 2,748
Raw materials and supplies........................... 6,527 6,551
=================== =================
$27,106 $31,856
=================== =================
</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. In accordance with Fresh Start Reporting, property and
equipment were reflected at fair market values as of May 31, 1996.
Restricted Cash
Restricted cash represents cash reserved as collateral for letters of
credit issued by the Company or cash held in escrow primarily to secure
certain contingent obligations of the Company. The contingent
obligations are primarily related to environmental liabilities and
certain insurance policies.
NOTE 4. INCOME TAXES:
Income tax expense is reported for the Predecessor Company based on the
actual effective tax rate for the eight-month period ended May 31,
1996. For this period, the U.S. federal tax provision is zero because
the Predecessor Company incurred a domestic loss for the period.
Amortization of "Reorganization value in excess of identified assets"
is not deductible for income tax purposes. Accordingly, the Reorganized
Company incurs income tax expense even though it reports a pre-tax loss
due to such amortization.
For the nine months ended June 30, 1997, income tax expense is reported
for the Reorganized Company based on an estimated effective tax rate
for fiscal 1997 of 43%. Also during the period, the Company recorded an
extraordinary loss on the extinguishment of debt as discussed in Note
9. Of the total income tax benefit of $5.2 million associated with this
charge, $4.3 million was reported in the three months ended March 31,
1997 and the remaining $.9 million was reported in the three months
ended June 30, 1997 as the income tax benefits became available.
At June 30, 1997, the reorganized Company had NOLs of approximately
$109 million available to offset future taxable income. Usage of these
NOLs by the Reorganized Company is limited to $4 million annually.
However, the Reorganized 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 Reorganized Company expects that
substantial amounts of the NOLs will expire unused. NOLs available to
offset income for fiscal 1997 are estimated to be $24 million.
NOTE 5. 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.
Fully diluted earnings (loss) per share are the same as primary
earnings per share for the periods presented.
The weighted average number of common shares outstanding and net income
(loss) per common share for periods prior to May 31, 1996 have not been
presented because, due to the restructuring and implementation of Fresh
Start Reporting, they are not comparable to subsequent periods.
NOTE 6. ACQUISITIONS:
During the nine month period ended June 30, 1997, the Company acquired
either the customer bases and other assets or the stock of eight
businesses. The aggregate purchase prices consisted of $17.5 million
cash at closing, $1.6 million in assumed liabilities and contingent
cash and/or stock payments of up to $9.9 million based upon future
operating results over the next two to five years.
NOTE 7. RIGHTS OFFERING:
On October 30, 1996, the Company completed a rights offering to its
existing shareholders that resulted in the issuance of 3.6 million
shares of common stock. For each share of Anacomp common stock held as
of the close of business on September 18, 1996, the Company distributed
0.36 rights to purchase an additional share of common stock at a
subscription price of $6.875 per share. The Company is using the
proceeds of the rights offering, approximately $24 million, for the
acquisition of businesses, assets and technologies.
NOTE 8. DEBT:
Senior Secured Credit Facility
On February 28, 1997, the Company and certain foreign subsidiaries
entered into a Credit and Guarantee Agreement (the "Credit Facility")
with a syndicate of banks and other financial institutions
(collectively, the "Senior Secured Lenders"), Lehman Commerical Paper
Inc., as arranger and syndication agent, and The First National Bank of
Chicago (in its individual capacity, "First Chicago"), as
administrative agent. The Credit Facility provides for a $55 million
term loan facility ("the Term Facility") and a $25 million revolving
credit facility (the "Revolving Facility"). The proceeds of the Term
Facility and available cash were used to repay the existing 11 5/8%
Senior Secured Notes due 1999 (the "Old Senior Secured Notes"). The
balance of the Old Senior Secured Notes at February 28, 1997, was $83.6
million, reflecting the prepayment of the March 31, 1997 installment of
$14.3 million made on February 20, 1997.
As of June 30, 1997, $55 million was outstanding under the Term
Facility, and no amounts were outstanding under the Revolving Facility.
The entire Revolving Facility is available for loans denominated in
U.S. dollars and certain foreign currencies ("Multicurrency Loans"),
and up to $10 million of the Revolving Facility is available for
letters of credit. The Term Facility is repayable in thirteen quarterly
installments commencing March 31, 1998, with the final installment due
on March 31, 2001. The Revolving Facility terminates on February 28,
2001.
The Company may elect to have loans under the Term Facility or the
Revolving Facility bear interest at (a) the Alternate Base Rate plus 2%
or (b) the Eurodollar Rate, or in the case of Multicurrency Loans, the
Eurocurrency Rate, plus 3%. Interest is payable quarterly and at the
end of the Interest Period (as defined in the Credit Facility). The
"Alternate Base Rate" for any day means the higher of (i) the corporate
base rate of interest announced by First Chicago and (ii) the federal
funds rate published by the Federal Reserve Bank of New York on the
next business day plus 1/2%. The "Eurodollar Rate" for any Interest
Period means (A) the applicable London interbank offered rate for
deposits in U.S. dollars two business days prior to the first day of
the Interest Period divided by (B) one minus the "Eurocurrency
Liabilities" under Regulation D of the Board of Governors of the
Federal Reserve System. The "Eurocurrency Rate" for any Interest Period
means the rate at which First Chicago offers to place deposits in the
applicable foreign currency with first-class banks in the London
interbank market two business days prior to the first day of the
Interest Period.
The Term Facility and the Revolving Facility are secured by all of the
Company's tangible and intangible assets (including intellectual
property, real property and all of the capital stock of each of the
Company's direct or indirect domestic subsidiaries and 65% of the
capital stock of each of the Company's material direct foreign
subsidiaries). All of the Company's obligations under the Credit
Facility are unconditionally guaranteed by the Company's direct or
indirect domestic subsidiaries. In addition to customary covenants, the
Credit Facility requires that the Company: (a) maintain certain ratios
of Consolidated EBITDA (as defined in the Credit Facility), (b) not
incur any indebtedness other than the 10 7/8% Senior Subordinated Notes
due 2004 (the "Notes"), indebtedness under the Credit Facility and
certain other indebtedness, (c) not permit any lien to exist on any of
its property, assets or revenues, except the liens in favor of the
Senior Secured Lenders, existing liens and certain other liens and (d)
not to incur any guarantee obligations, except the guarantee
obligations related to the Credit Facility and certain other guarantee
obligations.
The Company must use 25% of Consolidated Excess Cash Flow (as defined
in the Credit Facility) in fiscal 1997 and 50% of Consolidated Excess
Cash Flow thereafter to repay the Term Facility and reduce Revolving
Facility commitments. Additionally, 100% of the Net Proceeds (as
defined in the Credit Facility) of any Asset Sale (as defined in the
Credit Facility) and 75% of proceeds from the sale of Capital Stock (as
defined in the Credit Facility) not used for acquisitions or the
repurchase of subordinated debt, must be applied to repay the Term
Facility and reduce the Revolving Facility commitments. The Term
Facility repayment schedule is as follows:
Year ended
September 30,
(Dollars in
thousands)
-----------------
1998................................... $ 8,000
1999................................... 14,000
2000................................... 21,000
2001................................... 12,000
---------------
$ 55,000
=================
10 7/8% Senior Subordinated Notes
On March 24, 1997, the Company issued $200 million of the Notes. The
Notes were sold at 98.2071% of the face amount to yield proceeds of
$196.4 million. The proceeds of the Notes were used to repay the
existing 13% Senior Subordinated Notes due 2002, including a 3% call
premium and accrued interest, to reduce the SKC trade payable by $10
million and associated accrued interest, and to pay certain fees and
expenses. As a result of the call premium ($5.2 million) and existing
discount on the 13% notes ($11.6 million), the Company recorded an
extraordinary loss on the extinguishment of debt of $11.7 million, net
of tax benefits.
The Notes are not redeemable at the option of the Company prior to
April 1, 2000. On or after such date until April 1, 2003, the Notes
will be redeemable at the option of the Company in whole or in part at
prices ranging from 108.156% to 102.710% plus accrued and unpaid
interest. On or after April 1, 2003, the Notes may be redeemable at
100% plus accrued and unpaid interest. Prior to April 1, 2000, the
Company may, at its option, use the net cash proceeds of one or more
Public Equity Offerings (as defined in the Indenture), to redeem up to
35% of the aggregate principal amount at a redemption price equal to
110.875% plus unpaid interest to the date of redemption, provided that
at least $130 million of the aggregate principal amount of Notes
originally issued remains outstanding after any such redemption.
Also, upon a Change of Control (as defined in the Indenture), the
Company is required to make an offer to purchase the Notes then
outstanding at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest.
The Notes have no sinking fund requirements and are due in full on
April 1, 2004.
The Notes are general unsecured obligations of the Company and
expressly subordinated in right of payment to all existing and future
Senior Indebtedness (as defined in the Indenture) of the Company. The
Notes will rank pari passu with any future Senior Subordinated
Indebtedness (as defined in the Indenture) and senior to all
Subordinated Indebtedness (as defined in the Indenture) of the Company.
The indenture relating to the Notes contains covenants related to
limitations of indebtedness of the Company and restricted subsidiaries,
limitations on restricted payments, limitations on restrictions on
distributions from restricted subsidiaries, limitations on sale of
assets and restricted subsidiary stock, limitations on liens, a
prohibition on layering, limitations on transactions with affiliates,
limitations on issuance and sale of capital stock of restricted
subsidiaries and limitations of sale/leaseback transactions.
NOTE 9. STOCK PLANS
On February 3, 1997, the Company's shareholders approved the Anacomp,
Inc. 1997 Qualified Employee Stock Purchase Plan (the "Stock Purchase
Plan"). The Stock Purchase Plan allows qualified employees to purchase
shares of the Company's common stock at the lower of 85% of the fair
market value at the date of purchase or 85% of the fair market value on
the first day of each quarterly offering period. A maximum of 500,000
shares of common stock is available for purchase under the Stock
Purchase Plan. No shares are scheduled to be issued prior to March 31,
1998.
On February 3, 1997, the Company's shareholders approved the Anacomp,
Inc. 1996 Long-Term Incentive Plan. The Company has reserved 1,450,000
shares of its common stock for issuance in connection with options and
awards under this plan. No shares have been issued as of June 30, 1997.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
On May 20, 1996, the Company's Reorganization Plan was confirmed by the United
States Bankruptcy Court and the Company emerged from bankruptcy reorganization
on June 4, 1996. As a result of the Reorganization, the recording of the
restructuring transaction and the implementation of Fresh Start Reporting, the
Company's results of operations after May 31, 1996 (the cutoff date used for
financial reporting purposes) are not comparable to results reported in prior
periods. See Note 2 to the accompanying consolidated financial statements for
information on the consummation of bankruptcy reorganization and implementation
of Fresh Start Reporting.
To facilitate a meaningful comparison of the Company's quarterly and
year-to-date operating performance in fiscal years 1997 and 1996, the following
discussion of results of operations on a consolidated basis is presented on a
traditional comparative basis for all periods. Consequently, the prior year's
information presented below does not comply with accounting requirements for
companies upon emergence from bankruptcy, which requirements call for separate
reporting for the newly reorganized company and the predecessor company.
<PAGE>
CONSOLIDATED RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Anacomp, Inc.
CONSOLIDATED RESULTS OF OPERATIONS
Three Months Ended Nine Months Ended
June 30, June 30,
(Dollars in thousands) 1997 1996 1997 1996
--------- --------- --------- ---------
Revenues:
<S> <C> <C> <C> <C>
Services provided .......................................................... $ 46,690 $ 45,363 $ 139,435 $ 144,553
Equipment and supply sales ................................................. 67,351 69,845 205,579 226,831
--------- --------- --------- ---------
114,041 115,208 345,014 371,384
--------- --------- --------- ---------
Operating costs and expenses:
Costs of services provided ................................................. 24,400 25,647 73,345 80,398
Costs of equipment and supplies sold ....................................... 51,859 53,763 153,672 173,660
Selling, general and administrative expenses................................ 22,630 21,482 66,051 69,528
Amortization of reorganization asset ....................................... 18,973 6,416 56,937 6,416
--------- --------- --------- ---------
117,862 107,308 350,005 330,002
--------- --------- --------- ---------
Income (loss) from operations before interest, other
income, reorganization items, income taxes and
extraordinary items ........................................................ (3,821) 7,900 (4,991) 41,382
--------- --------- --------- ---------
Interest income ................................................................ 1,058 701 3,181 1,633
Interest expense and fee amortization .......................................... (8,436) (5,895) (27,974) (29,680)
Other income (loss) ............................................................ (357) 338 (1,152) 6,982
--------- --------- --------- ---------
(7,735) (4,856) (25,945) (21,065)
--------- --------- --------- ---------
Income (loss) before reorganization items, income
taxes and extraordinary items .............................................. (11,556) 3,044 (30,936) 20,317
Reorganization items ........................................................... -- 116,090 -- 92,839
--------- --------- --------- ---------
Income (loss) before income taxes and extraordinary ............................ (11,556) 119,134 (30,936) 113,156
items
Provision for income taxes ..................................................... 3,300 1,300 11,400 5,000
--------- --------- --------- ---------
Net income (loss) before extraordinary items ................................... (14,856) 117,834 (42,336) 108,156
Extraordinary Items:
Extraordinary gain on discharge of indebtedness, net
of income taxes ........................................................... -- 52,442 -- 52,442
Extraordinary loss on extinguishment of debt, net of
income taxes ............................................................... 875 -- (11,661) --
--------- --------- --------- ---------
Net income (loss) .............................................................. (13,981) 170,276 (53,997) 160,598
Preferred stock dividends and discount accretion ............................... -- -- -- 540
--------- --------- --------- ---------
Net income (loss) available to common stockholders ............................. $ (13,981) $ 170,276 $ (53,997) $ 160,058
========= ========= ========= =========
EBITDA ......................................................................... $ 19,059 $ 19,528 $ 62,512 $ 66,197
========= ========= ========= =========
</TABLE>
<PAGE>
Three Months Ended June 30, 1997 compared to the
Three Months Ended June 30, 1996
Results of Operations
General
Anacomp reported a net loss of $14.0 million for the three months ended June 30,
1997, compared to net income of $170.3 million for the three months ended June
30, 1996. The net loss for the three months ended June 30, 1997 included
non-cash amortization of the Company's reorganization value asset of $19.0
million compared to $6.4 million recorded in the prior period. Net income for
the three months ended June 30, 1996 included $168.5 million of income from
reorganization items and the extraordinary gain resulting from the discharge of
indebtedness. Earnings before interest, other income, reorganization items,
taxes, depreciation and amortization and extraordinary items ("EBITDA") was
$19.1 million for the three months ended June 30, 1997, compared to $19.5
million for the three months ended June 30, 1996.
Total revenues for the third quarter of $114.0 million represents a $1.2 million
decrease from the third quarter of the prior year. The slight decrease reflects
the continued downward trends of the Company's traditional micrographics and
magnetics businesses offset by contributions from the Company's acquisitions and
new digital products.
Cost of services provided as a percentage of services revenue was 52% for the
three months ended June 30, 1997, compared to 57% for the same period of the
prior year. The improvement is due primarily to cost reduction efforts in the
United States maintenance services organization. Cost of equipment and supplies
sold as a percentage of equipment and supplies sales was 77% for both the three
months ended June 30, 1997 and the three months ended June 30, 1996.
Selling, general and administrative expenses were 20% of revenue for the three
months ended June 30, 1997, compared to 19% of revenue for the three months
ended June 30, 1996. This increase represents human resource investments in new
product initiatives and the transitioning of acquisitions into the Company.
Interest expense and fee amortization was $8.4 million for the three months
ended June 30, 1997, compared to $5.9 million for the same period of the prior
year. The increase in interest expense relates to the discontinuance of accrued
interest on the Company's former subordinated debt during bankruptcy proceedings
in the three months ended June 30, 1996.
Products and Services
Output services revenues increased $1.6 million for the three months ended June
30, 1997, compared to the same three months of fiscal year 1996. The increase
was comprised of a $.9 million and $.7 million increase in Alva, or CD-R,
Services and COM services, respectively. COM service volumes increased by 17%
while average selling prices decreased by 16%. Data center acquisitions and
several large customer gains have contributed to both the increase in volumes
and the decrease in average selling prices. Gross margins as a percentage of
revenue decreased by two percentage points due to the aforementioned impact of
lower average selling prices.
Technical services (primarily maintenance) revenues decreased $1.2 million for
the three months ended June 30, 1997, primarily due to the effect of replacing
older generation COM systems with the XFP, which has a significantly greater
capacity than the older COM systems. Gross margins as a percentage of revenue
improved 11.5 percentage points primarily as a result of the cost reduction
efforts mentioned above.
<PAGE>
COM systems revenues for the three months ended June 30,1997, decreased by $1.8
million compared to the same period of the prior year. The decrease in revenue
is attributable to a decrease in the number of systems sold and the increased
mix of used systems which generate lower revenues than new systems. Gross
margins as a percentage of revenue improved several percentage points between
periods due to slightly better selling prices in the current period, as well as,
the increased mix of used systems yield higher margins than new systems.
Digital systems revenues for the three months ended June 30, 1997, were $2.4
million with the Data/Ware CD Systems accounting for $1.8 million of the total.
There were no digital systems sold for the same period of the prior year.
Micrographics supplies revenues for the three months ended June 30, 1997,
decreased $2.4 million compared to the same period of the prior year. The
decrease was primarily the result of expected revenue declines in the readers
and reader/printers and original COM film product lines. Gross margins as a
percentage of revenue decreased three percentage points as a result of changes
in product mix.
Magnetic media revenues of $26.3 million for the three months ended June 30,
1997, were slightly higher than the same period of the prior year. Gross margins
as a percentage of revenue increased by less than one percentage point due to
product mix.
Nine Months Ended June 30, 1997 compared to the
Nine Months Ended June 30, 1996
Results of Operations
General
Anacomp reported a net loss of $54.0 million for the nine months ended June 30,
1997, compared to net income of $160.6 million for the nine months ended June
30, 1996. The net loss for the nine months ended June 30, 1997 included non-cash
amortization of the Company's reorganization value asset of $56.9 million
(compared to $6.4 million recorded in the prior period) and an extraordinary
loss on the extinguishment of debt comprised of a 3% call premium and
unamortized discount on the Company's existing 13% subordinated notes.
Pursuant to a 1990 OEM agreement, Kodak was obligated to purchase an additional
151 XFP 2000 systems by October 1997 or pay a cash penalty to the Company. The
Company and Kodak negotiated an amendment to the OEM agreement, whereby the
Company accepted a $3.6 million cash payment from Kodak, which is included in
the current period results, and a commitment to purchase an additional 28 XFP
2000 systems by the end of calendar 1997, and a one-time purchase of spare
parts. Upon Kodak's purchase of the 28 XFP 2000 systems on or before December
20, 1997, Kodak's obligations and the OEM agreement shall terminate.
Net income for the nine months ended June 30, 1996 included income from the sale
of the Image Conversion Services Division ("ICS"), reorganization items and the
extraordinary gain resulting from the discharge of indebtedness. Earnings before
interest, other income, reorganization items, taxes, depreciation and
amortization and extraordinary items ("EBITDA") was $62.5 million for the nine
months ended June 30, 1997 compared to $66.2 million for the nine months ended
June 30, 1996. Excluding the Kodak payment, EBITDA was $58.9 million for the
current period.
<PAGE>
Total revenues for the nine months ended June 30, 1997 of $345.0 million
represents a $26.4 million decrease from the same period of the prior year.
Approximately $9.0 million of the decrease is due to the discontinuance and
downsizing of selected product lines, including ICS ($1.5 million), readers and
reader/printers ($4.9 million), source document film ($.4 million) and
micrographics accessories ($2.2 million). The remaining $17.4 million decrease
in revenues is due primarily to the expected general downward trends in both the
micrographics and magnetics product lines offset by contribution from the
Company's acquisitions and new digital products.
Cost of services provided as a percentage of services revenue was 53% for the
nine months ended June 30, 1997, compared to 56% for the same period of the
prior year due primarily to cost reduction efforts in the United States
maintenance services organization. Cost of equipment and supplies sold as a
percentage of equipment and supplies sales, excluding the one-time $3.6 million
payment noted above, was 76% for the nine months ended June 30, 1997, compared
to 77% for the same period of the prior year.
Selling, general and administrative expenses were 19% of revenue for both the
nine months ended June 30, 1997 and the nine months ended June 30, 1996,
excluding the one-time $3.6 million payment noted above.
Interest expense and fee amortization of $28.0 million for the nine months ended
June 30, 1997, decreased $1.7 million over the prior year, due to the Company's
improved debt structure as a result of the Reorganization in fiscal 1996 and
refinancings in fiscal 1997.
Products and Services
Output services revenues decreased $1.5 million for the nine months ended June
30, 1997, compared to the same nine months of fiscal year 1996, excluding the
effect of the ICS sale. COM service volumes increased by 4.7% while average
selling prices decreased by 11.5%. Data center acquisitions and several large
customer gains have contributed to both the increase in volumes and the decrease
in average selling prices. Gross margins as a percentage of revenue decreased by
three percentage points due to the aforementioned impact of lower average
selling prices.
Technical services (primarily maintenance) revenues decreased $4.1 million for
the nine months ended June 30, 1997, primarily due to the effect of replacing
older generation COM systems with the XFP 2000, which has a significantly
greater capacity than the older COM systems. Gross margins as a percentage of
revenue improved 8.1 percentage points primarily as a result of the cost
reduction efforts mentioned above.
COM systems revenues for the nine months ended June 30,1997, decreased by $7.3
million compared to the same period of the prior year. The decrease in revenue
is attributable to a decrease in the number of systems sold and the mix and
pricing of new and used systems. Gross margins as a percentage of revenue
improved several percentage points primarily due to increased used systems in
the product mix and the result of manufacturing efficiencies realized during
fiscal 1997.
Digital systems revenues for the nine months ended June 30, 1997, were $6.6
million. The sale of two XSTAR digital systems contributed $1.5 million in the
first quarter while the second quarter acquisition of Data/Ware contributed $4.2
million in CD systems revenues. There were no digital systems sold for the same
period of the prior year.
Micrographics supplies revenues for the nine months ended June 30, 1997,
decreased $13.9 million compared to the same period of the prior year consistent
with the projected market trends for readers and reader/printers, original COM
film, duplicate film and other accessories.
Magnetic media revenues for the nine months ended June 30, 1997, decreased $8.6
million compared to the same period of the prior year. The major product
categories experiencing a decrease in revenue include 3480 tape cartridges, open
reel tape and TK 50/52. These decreases were partially offset by the
contribution of $3.8 million from sales of the new metal particle tape products.
Gross margins as a percentage of revenue increased slightly over the prior year.
Liquidity and Capital Resources
During the period ended June 30, 1997, Anacomp completed the refinancing of
substantially all of its significant debt obligations (see Note 8 to the
condensed consolidated financial statements). The refinancings will result in
significant interest savings to the Company. Anacomp's cash interest cost will
now be at an annual rate of approximately $30 million as compared to
approximately $40 million upon the Company's exit from bankruptcy on May 31,
1996. The Company's debt amortization schedule has also been modified as a
result of the refinancings. Anacomp has no principal payments due on the new
debt during the remainder of fiscal 1997, $8 million due in fiscal 1998 and $14
million due in fiscal 1999. As of June 30, 1997, the current portion of
long-term debt was $6.4 million as compared to $31.8 million at September 30,
1996.
Anacomp's working capital at June 30, 1997, excluding the current portion of
long-term debt, was $38.3 million, compared to $26.4 million at September 30,
1996. Net cash provided by operating activities was $35.5 million for the first
nine months of fiscal 1997, compared to $31.1 million in the comparable prior
period. Net cash used in investing activities was $25.6 million in the current
period, compared to net cash provided by investing activities of $9.4 million in
the comparable prior period. This change was primarily the result of the Company
using $17.5 million of cash for acquisitions in the current period while the
Company generated $13.6 million in cash from the sale of the ICS Division in the
prior period. Also, the Company increased its capital expenditures for property,
plant and equipment by $4.0 million during the current period.
Net cash used in financing activities decreased to $7.8 million for the nine
months ended June 30, 1997, compared to $21.0 million in the comparable prior
period. The Company's successful rights offering of approximately 3.6 million
shares of common stock provided approximately $24.3 million in cash in the
current period and the Company's debt refinancing and principal reductions used
approximately $32.1 million in net cash.
The Company's cash balance (including restricted cash) as of June 30, 1997 was
$50.0 million, compared to $47.8 million at September 30, 1996. The Company also
has full availability on its $25 million revolving credit facility, which was
undrawn at June 30, 1997.
The Company has significant debt service obligations. The ability of the Company
to meet its debt service and other obligations will depend upon its future
performance and is subject to financial, economic and other factors, some of
which are beyond its control. However, the Company believes that cash on hand
and cash generated from operations, along with the availability of the revolving
credit facility, will be sufficient to fund its debt service requirements,
acquisition strategies and working capital requirements in the foreseeable
future.
Accounting Pronouncements
In February, 1997, the Financial Accounting Standards Board (FASB) issued two
pronouncements related to the calculation and disclosure of Earnings Per Share
information. These two pronouncements are effective for periods ending after
December 15, 1997 and, consequently, no adjustments are reflected in the
condensed consolidated financial statements for the period ended June 30, 1997.
In June, 1997, FASB issued two additional pronouncements related to reporting
comprehensive income and disclosure of segment information. These two
pronouncements are effective for periods beginning after December 15, 1997 and,
consequently, no adjustments are reflected in the condensed consolidated
financial statements for the period ended June 30, 1997. Adoption of these
pronouncements is not expected to have a significant effect on the Company's
financial results.
<PAGE>
ANACOMP, INC. AND SUBSIDIARIES
PART II: OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
(c) Unregistered sales of securities
Pursuant to the 1996 Non-Employee Director Stock Option Plan,
non-employee directors of the Company may elect to receive their
annual retainer in the form of options to acquire Common Stock of
the Company. Pursuant to such elections, during the period
covered by this report, an aggregate of 844 options were granted
to 2 directors in lieu of aggregate cash compensation of $6,250.
The issuance of such options was effected in reliance on the
private placement exemption set forth in Section 4(2) of the
Securities Act of 1933, as amended, on the basis of the
familiarity of such directors with the business and affairs of
the Company. No underwriting fees or discounts were applicable to
the transactions. The options are first exercisable six months
after the date of grant and remain exercisable through the tenth
anniversary of the grant date, at an exercise price of $11.125
per share.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(27) Financial data schedule (required for electronic filing
only)
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended
June 30, 1997
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities 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
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and duly authorized officer)
Dated this 1st day of August, 1997
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 JUNE 30, 1997 FORM 10-Q QUARTERLY REPORT AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> <blank>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 50,006
<SECURITIES> 0
<RECEIVABLES> 66,443
<ALLOWANCES> 6,364
<INVENTORY> 27,106
<CURRENT-ASSETS> 147,637
<PP&E> 39,075
<DEPRECIATION> 10,693
<TOTAL-ASSETS> 396,407
<CURRENT-LIABILITIES> 109,370
<BONDS> 254,919
0
0
<COMMON> 137
<OTHER-SE> 27,731
<TOTAL-LIABILITY-AND-EQUITY> 396,407
<SALES> 205,579
<TOTAL-REVENUES> 345,014
<CGS> 153,672
<TOTAL-COSTS> 46,405
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,974
<INCOME-PRETAX> (30,936)
<INCOME-TAX> 11,400
<INCOME-CONTINUING> (42,336)
<DISCONTINUED> 0
<EXTRAORDINARY> 11,661
<CHANGES> 0
<NET-INCOME> (53,997)
<EPS-PRIMARY> (4.05)
<EPS-DILUTED> (4.05)
</TABLE>
