RNS Number:1596L
Applied Graphics Technologies Inc
15 May 2003
Contacts: Kenneth G. Torosian, SVP & CFO
Applied Graphics Technologies
(212) 716-6689
FOR IMMEDIATE RELEASE
APPLIED GRAPHICS TECHNOLOGIES REPORTS
FIRST QUARTER 2003 RESULTS
New York, May 15, 2003 - Applied Graphics Technologies, Inc. (AMEX: AGD), today
reported results for the three months ended March 31, 2003.
The Company's revenues in the first quarter of 2003 of $97.7 million were in
line with the $98.5 million of revenue in the 2002 period. Gross profit
increased to $32.8 million in the first quarter of 2003 from $30.9 million in
the comparable quarter of 2002, and as a percentage of revenue increased to
33.5% in the 2003 quarter from 31.3% in the 2002 quarter. This increase in both
gross profit and margin was due primarily to the benefits realized from the
Company's cost cutting and integration efforts. The Company had operating
income of $1.8 million in the 2003 quarter as compared to $0.3 million in the
2002 period.
As previously disclosed, the Company has been pursuing an overall
recapitalization that would include an infusion of outside equity and the
settlement, at a significant discount, of amounts due to the Company's senior
lenders for amounts borrowed under the Company's credit facility, amounts due to
holders of the Company's subordinated notes, and amounts due to holders of
preference shares of a subsidiary of the Company. One set of discussions with a
third party earlier this year resulted in an offer being made that was accepted
by most of the Company's senior lenders, in both number of lenders and dollar
amount of commitment, but was rejected by a few of the senior lenders for not
containing sufficient consideration. Another third party is currently in
advanced discussions with the Company, the Company's senior lenders, certain
holders of the Company's subordinated notes, and certain holders of preference
shares of a subsidiary of the Company regarding an alternative offer. The
alternative offer would be conditioned on the acquisition of all existing senior
debt, subordinated notes, preference shares, and the Company's common stock.
Discussions to date in connection with this offer have led to agreements in
principle being reached with the Company's senior lenders and holders of more
than 50% of the Company's subordinated notes, and include an offer to acquire
the Company under which the holders of the Company's common stock would not
receive significant consideration. There can be no assurances as to the terms
or the success of any recapitalization or acquisition transaction, or that
mutually satisfactory documentation for any such transaction can be achieved.
Applied Graphics Technologies, Inc., provides digital media asset management
services across all forms of media, including print, broadcast, and the Internet
and is a leading application service provider for the on-line management of
brands. AGT offers a variety of digital imaging and related services to major
corporations, which include magazine and newspaper publishers, advertisers and
their agencies, entertainment companies, catalogers, retailers, and consumer
goods and packaging companies. From locations across the United States, the
United Kingdom, and Australia, AGT supplies a complete range of services that
are tailored to provide solutions for specific customer needs, with a focus on
improving and standardizing the management and delivery of visual communications
for clients on a local, national, and international basis. Additionally, AGT
provides a wide range of advertising and marketing-related creative services for
customers, primarily in retailing.
Certain statements in this press release may contain "forward-looking statements
" within the meaning of the Private Securities Litigation Reform Act of 1995, as
amended. Such statements are inherently subject to known and unknown risks,
uncertainties, and other factors that may cause actual results, performance or
achievements of the Company to be materially different from those expected or
anticipated in the forward-looking statements. Such factors are described in
the Company's SEC filings, including its Quarterly Reports on Forms 10-Q and its
Annual Report on Form 10-K.
Additional information about Applied Graphics Technologies can be obtained by
visiting the AGT website: http://www.agt.com.
(tables follows)
Applied Graphics Technologies, Inc.
Consolidated Statements of Operations Data
(Unaudited)
(In thousands, except per-share amounts)
Three Months
Ended March 31,
2003 2002
Revenues $ 97,746 $ 98,521
Cost of revenues 64,965 67,665
Gross profit 32,781 30,856
Gross profit percentage 33.5% 31.3%
Selling, general and administrative expenses 30,998 30,557
Operating income before amortization and other charges 1,783 299
Amortization of intangibles 91 80
Gain on disposal of property and equipment (75) (116)
Operating income 1,767 335
Interest expense (4,277) (4,089)
Interest income 65 57
Other income (expense) - net 6 (96)
Loss from continuing operations before benefit for income taxes (2,439) (3,793)
and minority interest
Benefit for income taxes (854) (515)
Loss before minority interest (1,585) (3,278)
Minority interest (660) (588)
Loss from continuing operations (2,245) (3,866)
Loss from discontinued operations (6,195)
Cumulative effect of change in accounting principle (327,875)
Net loss $ (2,245) $ (337,936)
Basic and diluted loss per common share:
Loss from continuing operations $ (0.25) $ (0.43)
Loss from discontinued operations (0.68)
Cumulative effect of change in accounting principle (36.16)
Total $ (0.25) $ (37.27)
Weighted average number of common shares:
Basic 9,148 9,068
Diluted 9,148 9,068
Applied Graphics Technologies, Inc.
Consolidated Balance Sheet Data
(Unaudited)
(In thousands of dollars)
March 31, December 31,
ASSETS 2003 2002
Current assets:
Cash and cash equivalents $ 7,317 $ 4,724
Trade accounts receivable (net of allowances of $7,655 in
2003 and $7,832 in 2002) 86,654 90,102
Due from affiliates 603 405
Inventory 17,789 16,608
Prepaid expenses 4,598 4,629
Deferred income taxes 14,104 14,104
Other current assets 2,464 2,830
Total current assets 133,529 133,402
Property, plant and equipment - net 54,768 56,906
Other intangible assets - net 1,273 1,364
Deferred income taxes 1,823 1,753
Other assets 10,132 10,157
Total assets $ 201,525 $ 203,582
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 12,551 $ 14,932
Accrued expenses 47,306 57,377
Current portion of long-term debt and obligations under
capital leases 8,840 14,050
Due to affiliates 734 442
Restructuring liabilities 8,955 10,585
Other current liabilities 24,167 23,722
Total current liabilities 102,553 121,108
Long-term debt 169,098 150,008
Subordinated notes 29,328 29,894
Obligations under capital leases 153 204
Other liabilities 10,898 11,685
Total liabilities 312,030 312,899
Commitments and contingencies
Minority interest - Redeemable Preference Shares
issued by subsidiary 42,524 42,045
Total stockholders' deficit (153,029) (151,362)
Total liabilities and stockholders' deficit $ 201,525 $ 203,582
This information is provided by RNS
The company news service from the London Stock Exchange
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