Von Hoffmann Reports Q4 and Full Year Earnings: Sales Down 6%
Press release from the issuing company
ST. LOUIS, Feb. 19 -- Von Hoffmann Corporation, a leading North American educational and commercial printer, today announced results for its fourth quarter and full year ended December 31, 2003. On October 22, 2003, Von Hoffmann Corporation consummated the acquisition of The Lehigh Press, Inc., a provider of educational book components, digital premedia and direct marketing services. The consolidated 2003 financial results of Von Hoffmann Corporation include the operating results of Lehigh Press from the date of its acquisition.
Net sales for the fourth quarter of 2003 were $71.8 million, including $6.7 million contributed by Lehigh Press's educational book components and digital premedia services businesses. Fourth quarter sales decreased 6.4% from $76.7 million in the prior year's quarter. Net loss for the fourth quarter of 2003 was $4.4 million compared to a net loss of $2.0 million for the fourth quarter of 2002. Adjusted earnings before income taxes, depreciation and amortization (adjusted EBITDA) were $9.1 million for the fourth quarter of 2003, including $1.7 million for Lehigh Press, compared to $12.7 million for the fourth quarter of 2002.
The Company's four-color elementary and high school (ELHI) market continued to be stable during the fourth quarter. The reduction in the fourth quarter's net sales reflects a decline in the higher education segment of our educational business. The Company also experienced reduced activity in the one and two-color market segments, both educational and non-educational. The reduction in adjusted EBITDA in the current quarter was principally driven by lower net sales.
Net sales for 2003 were $377.1 million including $6.7 million contributed by Lehigh Press's educational book components and digital premedia services businesses. Net sales decreased by 0.6% from prior year's net sales of $379.4 million. Net loss in 2003 was $2.3 million compared to a net loss of $5.3 million in 2002. Adjusted EBITDA was $64.4 million for 2003 compared to $63.9 million in 2002.
Net sales performance for 2003 was driven by increased sales in the Company's targeted growth markets, one and two-color educational, testing and four-color non-educational, where sales grew 24%, 4% and 155%, respectively. Sales to the Company's core four-color ELHI market improved by 2% over prior year. The increase in net sales within these markets was offset by a decrease in sales from the one and two-color non-educational market. Adjusted EBITDA for 2003 includes $1.7 million for Lehigh Press. Excluding the Lehigh Press results, the reduced adjusted EBTIDA performance in the fourth quarter of 2003 adversely impacted the full year 2003 results. Positive gains generated through operating conversion and cost initiatives for the first nine months of 2003 were more than offset by our fourth quarter performance.
Robert Mathews, President and Chief Executive Officer, noted, "The fourth quarter reflects the short-term challenges facing the educational publishers and corresponding printing industry. In addition, the Company continues to be challenged by a soft economy in the non-educational printing industry. The Company's fourth quarter operating performance reflects the impact of this reduced activity within a historically slow period. However, our targeted market strategy within our core educational product space and the four-color non-educational segments continue to confirm our sales direction."
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