BALTIMORE--Aug. 9, 2007-- Vertis Communications, a leading provider of targeted advertising, media and marketing solutions, announced today results for the three and six months ended June 30, 2007.
Revenue
Revenue for the second quarter of 2007 was $332.1 million versus $350.5 million in the second quarter of 2006. The 5.2 percent decline was primarily the result of a continuing weakness in Advertising Inserts. Revenue in the Direct Mail segment was up slightly.
On a year-to-date basis, revenue was $662.8 million, a decrease of $35.8 million or 5.1 percent, from revenue of $698.6 million in the first half of 2006. The decrease was driven by revenue declines in Advertising Inserts and our "Other" segment (premedia), which were somewhat offset by revenue growth in Direct Mail.
Net Loss
Net loss during the quarter grew to $19.7 million from $5.0 million in the same quarter one year ago. Through June 30, 2007, the net loss amounted to $44.9 million versus $26.6 million in the corresponding period in the prior year. The decline in revenues was the main driver of the increased loss.
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")
EBITDA in the second quarter of 2007 declined, as expected, to $27.4 million from $42.1 million for the same period in 2006. Adjusted EBITDA was $31.4 million in the second quarter of 2007, a decline of $15.0 million, or 32 percent, from Adjusted EBITDA of $46.4 million in the same quarter of 2006. This decline was largely due to the above mentioned decline in revenue, investments made in maintenance, quality and sales support, somewhat offset by corporate cost reductions.
On a year to date basis, EBITDA amounted to $48.7 million in 2007 versus $67.4 million for the same period in 2006. Adjusted EBITDA amounted to $56.0 million for the first six months of 2007 versus $81.4 million in the first half of 2006.
Cash and Liquidity
The Company ended the six month period with $6.0 million in cash and debt of $1,124.3 million. In addition, the off-balance sheet Accounts Receivable facility stood at $110.1 million. The Company ended the six month period with $92.6 million available on its $250 million senior credit facility. Last 12-month Adjusted EBITDA calculated for covenant purposes was $144.1 million or $19.1 million above the minimum requirement.
Additional information on the results is available in the Company's Form 10-Q filed with the SEC on August 9, 2007.
Management Comments
Mike DuBose, Chairman and Chief Executive Officer commented, "Although the environment remains challenging, our overall second quarter and first half financial results were, for the most part, in-line with our expectations. During the second quarter we continued to pursue our key turnaround initiatives focused on aggressively addressing the root causes of the quality, performance and customer service issues which impacted the Company in previous years. In addition, we further upgraded the organizations and infrastructure necessary to drive profitable growth into the future. Our initiatives are beginning to yield results in our quality, customer service and operating efficiency."
DuBose continued, "In several cases our performance improvements in these areas have been noted by our customers, as significant. We have also made improvements in our selling, pricing and new business capture processes. We continue to see opportunities to improve efficiency and lower costs while simultaneously capturing new profitable business as well as providing additional value added products and services to our existing customers. While much work remains to be done, we are pleased overall with the progress and confident that we are positioning Vertis for a stronger future."