Workflow Management Reports Positive 4Q Results, iGetSmart.com Included
Thursday, September 06, 2001
PALM BEACH, Fla., Sept. 5 Workflow Management, Inc., the nation's leading outsourcer of print and office consumables, today reported results for the first quarter ended July 31, 2001. Workflow Management reported that revenue for the first quarter of fiscal 2002 increased 9.4% to $155.2 million versus $141.8 million for the same period last year. First quarter operating income was $7.4 million versus $5.9 million while EBITDA increased 14.2% to $10.1 million from $8.9 million a year ago. Net income, for the three months ended July 31, 2001 was $2.3 million or $0.18 per diluted share, compared to $1.5 million or $0.14 per diluted share after adjusting the corresponding prior year period for FAS 142. The year over year increase in diluted earnings per share is attributable to decreased general and administrative costs related to aggressive cost cutting efforts and the restructuring plan initiated during the fourth quarter of fiscal 2001. Tom D'Agostino, Sr., Chairman, President and CEO, commented, "These results represent a strong start to fiscal 2002. Our large and diversified customer base enabled us to sustain our top line revenues in a challenging economic environment. Furthermore, the significant increase in earnings per share is directly attributable to the extensive SG&A cost cutting initiatives and overall streamlining of operations initiated last quarter.'' Effective the first day of fiscal 2002, the Company adopted the new FASB pronouncement relating to intangible assets and the amortization of goodwill. Under the new FASB, it will no longer amortize goodwill generated under purchase acquisitions. Consequently, the Company is changing its guidance to reflect the adoption of FAS 142 and adjusting its range of earnings per share guidance to $1.12 - $1.15 per share. Workflow Solutions Division's revenues during the first quarter of fiscal 2002 increased 14.3% to $74.9 million as compared to fiscal 2001 first quarter revenues of $65.5 million. Within the Solutions Division, iGetsmart.com's revenues for the quarter increased 113.8% to $6.1 million versus $2.9 million for the same period last year. In addition, iGetsmart.com's gross profit margin for the first quarter was 67.5% and EBITDA margin was 6.1%. Workflow Printing Division's revenues for the first quarter increased 5.8% to $83.3 million as compared to fiscal 2001 first quarter revenues of $78.7 million. Mr. D'Agostino, Sr. continued, "Workflow's ability to go to market with an end-to-end solution is helping us continue to gain market share at the expense of our competitors. In addition, our large and diverse client base, coupled with our broad range of products and services, allows us to mitigate some operating risk in a challenging environment.'' During the quarter, Workflow completed the divestiture of company-owned real estate holdings through a sale-lease back agreement and should realize approximately $6.7 million in after tax proceeds. The Company also announced that the iGetSmart.com group completed the acquisition of The Document Options Company during the quarter. Document Options is a strong addition to the front-end supply chain consulting services of iGetSmart.com and they bring to the table some significant long-term clients including Bell & Howell and Dollar General Corporation. Mr. D'Agostino, Sr. stated, "Given the overall economic uncertainty, we believe it is necessary to adopt a more conservative top line outlook with regard to the balance of the year. We now expect revenues to range from $650.0 million to $662.0 million for fiscal 2002, however, we continue to remain comfortable with our diluted earnings per share expectations.'' Mr. D'Agostino. Sr. concluded, "In our three short years as a public company, we have aggressively become the print and office consumables outsourcer of choice and are dedicated to furthering our leadership position in the industry. We believe we have the proper strategies in place to capitalize on any improvements in the economy and remain dedicated to executing on a plan that will result in long-term growth and increased shareholder value.