Third Quarter Revenue of $161.2 million and EPS of $0.21
PALM BEACH, Fla.---March 6, 2002-- Workflow Management, Inc. the nation's leading outsourcer of print, today reported fiscal 2002 third quarter results for the period ended January 31, 2002.
Third quarter revenue for the period ended January 31, 2002 increased 3.8% to $161.2 million compared to $155.2 million last year. Revenue in the Company's Solutions Division increased 7.9% to $84.5 million, while revenue in the Printing Division was relatively flat at $79.4 million. Third quarter operating income was $7.9 million compared to $8.1 million last year. Net income was $2.8 million, or $0.21 per diluted share, versus net income of $2.7 million, or $0.21 per diluted share, in the prior year third quarter. Adjusted for the implementation of FAS 142, third quarter diluted earnings per share would have been $0.24 in the prior year.
Tom D'Agostino, Sr., Chairman, President and Chief Executive Officer stated, "We are pleased to report third quarter results. Our earnings were impacted by a challenging economy and industry-wide overcapacity, which resulted in margin pressure as printing companies reduced prices to fill their excess capacity. We took advantage of this difficult period to complete a major consolidation initiative, which significantly reduced excess capacity and improved efficiencies in our Printing Division. Furthermore, these projects reduced the number of print facilities in California to two from five and should contribute to improved profitability as the economy and product demand rebounds.''
"We are pleased with the progress of our Solutions Division in two key areas: the increasing acceptance of iGetSmart.com and new account growth,'' continued Mr. D'Agostino. "We have added several long-term contracts within the Solutions Division that will take advantage of iGetSmart.com's strength in supply chain management. The ability of the Solutions Division to provide multiple, distinct solutions for our customers' graphic arts needs makes us unique in the print industry. We continue gaining traction and marketplace acceptance based on our capabilities as a business process outsourcer (BPO) as we provide vendor management services utilizing the iGetSmart team and system.''
Revenue for the nine months ended January 31, 2002 increased 6.8% to $476.6 million compared to $446.2 million during the same period in fiscal 2001. Revenue in the Company's Solutions Division increased 11.9% to $239.2 million and Printing Division revenue rose 1.9% to $247.5 million. For the nine months ended January 31, 2002, operating income declined 4.8% to $21.1 million versus $22.2. million during the same period last year. Net income for the first nine months of fiscal 2002 was $6.5 million, or $0.49 per diluted share, versus net income of $7.0 million, or $0.53 per share in the comparable period last year. Adjusting for the implementation of FAS 142, nine-months diluted earnings per share would have been $0.62 in the prior year.
Mr. D'Agostino continued, "The business environment remains challenging with the economic outlook for business spending described as stable at best. We remain focused on preserving capital, while strengthening our operations to position us to benefit as business spending increases and the economy rebounds. We believe our position, as a diversified, market-dominant company, will strengthen as the current economic challenges abate. We continue pursuing the best long-term strategy for the Company and, to that end, we are constantly exploring initiatives that will improve our capital structure, drive revenues and enhance the quality of earnings.''
The Company has updated its issued earnings guidance for fiscal 2002 ending on April 30, 2002. Based on the economic outlook and current expectations, the Company is raising its expected revenue range to $630 million to $640 million. While the Company anticipates continued gross margin pressure it still expects diluted-earnings per share in line with the previous guidance of $0.70 to $0.80.
Mr. D'Agostino concluded, "We believe we have overcome a difficult economic cycle the past two years and have positioned the Company for future opportunities. We continue adapting our business to the ever-changing, highly competitive landscape and expect our diversification and strategic positioning will result in long-term growth and increased shareholder value.''
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