Cunningham Graphics International Announces Record Second Quarter Results; Revenues Increase 72%; EPS Excluding Non-Recurring Moving Costs $0.28 vs.$0.17.JERSEY CITY, N.J.--(BUSINESS WIRE)--July 26, 1999-- Cunningham Graphics International, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on NM: CGII CGII Canadian Government Information on the Internet CGII Capital Group International, Inc. ) today announced record financial results for the second quarter and six months ended June 30, 1999. For the second quarter ended June 30, 1999, revenues increased 72% to $22.6 million compared to $13.1 million in the second quarter of 1998. Before non-recurring moving related costs, net income for the second quarter increased 90% to $1.6 million, or $0.28 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income of $835,000, or $0.17 per diluted share, for the quarter ended June 30, 1998. For the six months ended June 30, 1999, revenues increased 71% to $40.9 million compared to $23.9 million for the comparable period of 1998. Before non-recurring moving related costs, net income for the six month period increased 119% to $3.0 million, or $0.52 per diluted share, compared to pro forma net income of $1.4 million, or $0.35 per diluted share, for the six months ended June 30, 1998. Cunningham Graphics International is in the process of relocating its New Jersey and certain Manhattan operations to a state-of-the-art, 167,000 square foot facility in Jersey City, NJ. The facility will reduce overhead while streamlining the process flow, thereby creating efficiencies. The new location increases the Company's capacity, allows for tuck-in acquisitions Tuck-In Acquisition The acquisition of a company made for the sole purpose of merging it into a division of the acquirer. Sometimes referred to as "bolt-on acquisitions." Notes: and facilitates new out-source contracts. The Company has provided $840,000 ($493,000 after taxes) for non-recurring costs related to the move. Net income for the second quarter including the non-recurring moving costs was $1.1 million, or $0.19 per diluted share. During the second quarter, Cunningham Graphics International completed several acquisitions: Goldhawk Reprographics Duplicating printed materials using various kinds of printing presses and high-speed copiers. Limited located in London, England on April 1st, Bengal Bengal (bĕng-gôl`, bĕn–), region, 77,442 sq mi (200,575 sq km), E India and Bangladesh, on the Bay of Bengal. The inland section is mountainous, with peaks up to 12,000 ft (3,660 m) high in the northwest, but most of Bengal is the Graphics, Inc. located in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY on June 3rd and Apollo Limited located in London, England on June 21st. Subsequent to the end of the second quarter the Company announced it had closed its seventh acquisition this year by acquiring MVP (Multimedia Video Processor) A high-speed DSP chip from Texas Instruments, introduced in 1994. Officially introduced as the TMS320C80, it combines RISC technology with the functionality of four DSPs on one chip. Graphics, Inc., a premier commercial sheetfed printer located in Santa Fe Springs, California Santa Fe Springs (Santa Fe meaning "Holy Faith") is a city in Los Angeles County, California, United States. It is one of the Gateway Cities of southeast Los Angeles County. The population was 17,438 at the 2000 census. serving the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. and Orange County markets. Cunningham Graphics International adds value to acquired graphic communication companies by increasing revenues through geographic cross-selling, by improving operating rates Operating rate The percentage of total production capacity of a company, industry, or country that is being used. operating rate The portion of capacity at which a business operates. , upgrading technology and realizing purchasing economies for materials, thereby significantly reducing document production costs. Michael R. Cunningham, Chairman and Chief Executive Officer, commented, "This was our fifth consecutive quarter of record sales and earnings and I'm especially pleased we were able to accomplish these results while relocating our facilities and successfully integrating a number of accretive acquisitions Accretive Acquisition An acquisition that will increase the acquiring company's EPS. Notes: As they are expected to increase the acquiring company's future earnings, these acquisitions tend to be favorable for the company's market price. . The efficiencies and opportunities created by the new facility are expected to enhance shareholder value by enabling us to achieve strong internal growth while pursuing our acquisition strategy." Cunningham Graphics International provides time-sensitive graphic communications services and outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. solutions to a blue chip client base. The Company currently operates in select international markets through its facilities in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , the United Kingdom, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , Singapore and Canada. Graphic communication services provided by the company include, digital communications Transmitting text, voice and video in binary form. See communications. , document management, offset and digital printing, data output, bindery A NetWare file used for security and accounting in the early NetWare 2.x and 3.x versions. The bindery pertained only to the server it resided in and contained the names and passwords of users authorized to log in to that server. , fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. and mailing services. This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which involve known and unknown risks, uncertainties or other factors that could cause actual results to materially differ from the results, performance or other expectations implied by these forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, continued demand for its services, the availability of raw materials, the impact of competitive services and pricing, risks in technology development, changing economic conditions and other risk factors detailed in the Company's filings with the Securities and Exchange Commission.
CUNNINGHAM GRAPHICS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousand, except shares and per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
---- ---- ---- ----
Net Sales $22,562 $13,080 $40,864 $23,930
Operating expenses:
Costs of production 14,932 9,349 27,183 17,473
Selling, general
& administration 3,856 1,890 6,821 3,491
Non-recurring moving costs 840 - 840 -
Depreciation & amortization 881 283 1,643 466
------- ------- ------- -------
20,509 11,522 36,487 21,430
Income from operations 2,053 1,558 4,377 2,500
Interest income (expense) (267) 18 (310) (42)
Other income (expense) 15 12 28 19
------- ------- ------- --------
Income before income taxes 1,801 1,588 4,095 2,477
Provision for income taxes 711 724 1,610 797
------- ------- ------- --------
Net income $ 1,090 $ 864 $ 2,485 $ 1,680
======== ======== ======== ========
Earnings per common share:
Basic $ 0.19 $ 0.44
======== ========
Diluted $ 0.19 $ 0.44
======== ========
Weighted average number
of common shares:
Basic 5,703,216 5,674,615
========= =========
Diluted 5,740,326 5,711,188
========= =========
Pro Forma Data
Income before income taxes $ 1,588 $ 2,477
Pro forma provision
for income taxes(a) 753 1,117
------- --------
Pro forma net income $ 835 $ 1,360
======= ========
Pro forma earning
per common share:
Basic $ 0.17 $ 0.35
======= ========
Diluted $ 0.17 $ 0.35
======= ========
Pro forma weighted average
number of common shares:
Basic 4,757,190 3,865,793
========= =========
Diluted 4,822,418 3,898,587
========= =========
Net income $1,090 $864 $2,485 $1,680
Non-recurring moving costs 840 - 840 -
Tax benefits from
non-recurring moving costs (347) - (347) -
Pro forma provision
for income taxes(a) - (29) - (320)
------- ------- ------- -------
Net income excluding
non-recurring moving costs $ 1,583 $ 835 $ 2,978 $ 1,360
======== ======== ======== ========
Diluted earnings per share
excluding non-recurring
moving costs $ 0.28 $ 0.17 $ 0.52 $ 0.35
======== ======== ======== ========
Weighted average
shares outstanding 5,740,326 4,822,418 5,711,188 3,898,587
========= ========= ========= =========
--------
(a) Utilizing an overall effective tax rate of 41% for domestic
operations as if the Company had been a C corporation since
January 1, 1997.
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