Von Hoffmann Announces Q3 Loss: Challenges in one and two-color markets
Press release from the issuing company
ST. LOUIS, Nov. 10 -- Von Hoffmann Corporation, a leading North American educational and commercial printer, today announced results for its third quarter ended September 30, 2003.
Net sales for the third quarter of 2003 were $107.2 million, consistent with prior year's quarter of $108.1 million. Net loss for the third quarter of 2003 was $0.4 million compared to $0.2 million net income in the third quarter of 2002. Adjusted earnings before income taxes, depreciation and amortization (EBITDA) were $19.0 million for the third quarter of 2003 compared to $16.2 million in the third quarter of 2002.
Despite continued unfavorable market conditions, the Company was able to increase its core four-color educational market sales by nearly 6% during the quarter as well as continue to grow the four-color non-education market. However, the above net sales improvement was offset by reduced activity in the one and two-color non-educational market, primarily the computer and governmental markets. Adjusted EBITDA, as a percentage of net sales, was 17.7% in the third quarter of 2003 compared to 15.0% in 2002. The results in the current quarter were driven by improvements in operational conversion within our Jefferson City facility along with a higher overall mix of four- color products sold in 2003.
For the nine months ended, net sales for 2003 were $305.3 million, an improvement over prior year's net sales of $302.7 million. Net income in 2003 was $2.1 million compared to a net loss of $3.3 million in 2002. Adjusted EBITDA was $55.3 million for the nine months ended September 30, 2003 compared to $51.2 million in 2002.
Net sales performance on a year-to-date basis continues to be 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 improved by 2% over prior year as result of the above third quarter performance. These improvement areas have been offset by the one and two-color non-educational market performance. Adjusted EBITDA on a year-to-date basis for 2003 improved over prior year levels due to the operating performance in the third quarter as well as overall cost initiatives implemented throughout the organization. On October 22, 2003, Von Hoffmann Corporation consummated the acquisition of Lehigh Press, Inc. The transaction was financed by the borrowing of funds under our Senior Credit Facility and cash on hand.
Robert Mathews, President and Chief Executive Officer, noted, "The third quarter reflects the operational improvement made by the Jefferson City facility from prior year's performance. Our targeted market strategy within our core educational product space and the four-color non-educational segments continue to confirm our sales direction. However, the Company's third quarter sales performance reflects the continued challenges within the one and two-color non-educational printing industry and the resulting impact to our organization."
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