Von Hoffmann Corporation Announces Increased Earnings for Second Quarter
Press release from the issuing company
ST. LOUIS, Aug. 4 -- Von Hoffmann Corporation, a leading North American educational and commercial printer, today announced results for its second quarter ended June 30, 2003.
Net sales for the second quarter of 2003 were $104.4 million, representing a 6.8% decrease from prior year's quarter of $112.0 million. Net income for the second quarter of 2003 was $2.9 million compared to $2.3 million in the second quarter of 2002. Earnings before income taxes, depreciation and amortization (EBITDA) were $20.6 million for the second quarter of 2003 compared to $23.0 million in the second quarter of 2002. Prior year results include a $4.2 million gain on the disposition of the corporate aircraft partially offset by a one-time $1.8 million management expense charge.
Consistent with the Company's growth strategy, second quarter's net sales were led by a 33% increase within the supplementary educational market and on-going growth in the four-color non-educational market. In addition, the quarter reflects the consistent performance in the Company's core four-color educational market. This sales performance was offset by results within certain segments of our one-color non-educational market. After excluding one-time events in prior year results as noted earlier, EBITDA for the second quarter of 2003 was comparable for the same period in 2002 on a lower level of net sales. The Company's net income position improved $0.6 million or 26.3% during the quarter primarily due to reduced operating expenses of $3.1 million and depreciation expense of $2.8 million as a significant level of assets became fully depreciated in the third quarter of 2002.
For the six months ended, net sales for 2003 were $198.1 million, a 1.8% improvement over prior year's net sales of $194.7 million. Net income in 2003 was $2.5 million compared to a net loss of $3.5 million in 2002. EBITDA was $35.7 million for the six months ended June 30, 2003 compared to $31.3 million in 2002. In addition to the 2002 non-operating items referenced earlier, prior year results include a loss on debt extinguishment of $3.1 million (Net income impact of $2.0 million) as a result of the write-off of debt issuance costs during our debt refinancing completed in March, 2002.
Net sales performance on a year-to-date basis was driven by significant growth in both of the Company's targeted growth markets, supplementary educational and four color non-educational. In addition, sales to the Company's core four-color educational market has been stable as planned. These improvement areas have been partially offset by the one color non-educational market performance. After excluding one-time events in prior year results as noted earlier, EBITDA on a year-to-date basis for 2003 improved over prior year levels due to cost initiatives implemented throughout the organization. The Company's net income position improved in 2003 as a result of the improved operating results and reduced depreciation expense of $6.9 million.
Robert Mathews, President and Chief Executive Officer, noted, "We continue to gain momentum in our targeted markets while maintaining strong market share in our core four color educational market. Our manufacturing model continues to improve with technology and process improvement changes made in the last twelve months. However, the Company's second quarter sales performance reflects the challenges within the one color non-educational printing industry."
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