Vertis Loses $71.9M in Q2
The amount includes a non-cash tax provision of $48.8 million against previously recorded deferred tax benefits, the company said.
The company's net loss for the first six months of 2003 was $77.8 million, down from $120.4 million in the comparable 2002 period, which included a $108.4 million after-tax cumulative effect relating to "goodwill and other intangibles," Vertis said.
Net sales in the quarter were $377.3 million while net sales for the six months were $748.6 million. Both figures were down 7.7 percent from the comparable periods last year.
Vertis, Baltimore, attributed the declines to competitive pricing pressures, sluggish direct mail business domestically and in Europe and weak ad agency business in the company's advertising technology services segment.
"The challenging economic and geopolitical conditions continued in the second quarter, which resulted in increased unemployment, put pressure on retail sales and dampened advertising spending," said Donald Roland, chairman/president/CEO. "Our direct marketing and Europe segments began feeling the effects of these challenges in the third quarter of 2002, and our retail and newspaper services segment felt the impacts in the fourth quarter of last year."
Earnings before interest, taxes, depreciation, amortization and the effect of an accounting change were $39.2 million for the second quarter, down from $57.7 million last year. For the six-month period, EBITDA was $82.4 million, a drop of $22 million from last year.
Six-month 2003 EBITDA benefited from a $10.1 million recovery in a legal settlement and a $3.9 million decline in restructuring-related charges, the company said.
In an update to earnings guidance for the year, chief financial officer Dean D. Durbin said full-year 2003 EBITDA would be $196 million to $206 million, and the net loss would be $64.9 million to $75.1 million.