Baltimore, MD (July 28, 2004) -- Vertis, Inc., a leading provider of targeted advertising, media and marketing services, today announced results for the three and six months ended June 30, 2004.
For the quarter ended June 30, 2004, net sales were $396.9 million, $19.6 million or 5.2% above the second quarter of 2003. For the six months ended June 30, 2004, net sales were $784.4 million, $35.8 million or 4.8% above the comparable 2003 period. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) amounted to $39.8 million in the three months ended June 30, 2004, an increase of $0.6 million, or 1.5% versus the second quarter of 2003. EBITDA for the six months ended June 30, 2004 amounted to $80.6 million, a decrease of $1.8 million or 2.2% versus the six months ended June 30, 2003. Excluding a $10.1 million recovery from a settlement to a legal proceeding in the first quarter of 2003, the 2004 EBITDA growth for the first six months would have been 11.5%.
Donald E. Roland, Chairman, President, and Chief Executive Officer stated, “The improving economic conditions and ongoing attention to our cost base resulted in the double-digit EBITDA growth, excluding the legal settlement, for the first six months. Our sales and marketing teams are implementing a number of sales initiatives to drive top-line growth both with existing customers and in new markets.”
Dean D. Durbin, Chief Financial Officer commented, “In the second quarter, we implemented a restructuring program in our European segment. Costs associated with this activity reduced our 2004 results by $1.5 million in the second quarter. In total, our restructuring costs were $1.9 million in the second quarter and $2.8 million for the six months. There were no restructuring charges in the first six months of 2003. Excluding the restructuring charges in 2004 and the insurance proceeds in 2003 we would have posted year-over-year EBITDA growth of 6.4% in the second quarter and 15.4% through June 30. As a result, we finished the quarter safely within our debt covenant requirements.”
Vertis reported a net loss of $11.6 million in the second quarter of 2004 versus a net loss of $71.9 million in the second quarter of 2003. For the six months ended June 30, 2004, Vertis had a net loss of $22.9 million as compared to $77.8 million for the six months ended June 30, 2003. The 2003 second quarter and six month net losses include a $48.8 million non-cash tax provision to provide a valuation allowance against previously recorded deferred tax benefits related to net operating loss carryforwards. This amount is partially offset in the six months ended June 30, 2003 by the $10.1 million benefit from the legal settlement identified above. Excluding the valuation allowance and the income from the legal settlement, net loss for the six months ended June 30, 2004 decreased by $16.2 million or 41.4% from the comparable 2003 period.
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