FOR IMMEDIATE RELEASE
AMERICAN COLOR GRAPHICS REPORTS
FOURTH QUARTER AND FISCAL YEAR 2007 RESULTS
TN, June 27, 2007 ACG Holdings, Inc. and American Color Graphics, Inc.
(collectively, the Company), today reported financial results for the fourth fiscal quarter and
the twelve months ended March 31, 2007.
The Company reported revenues of $103.3 million for the fourth quarter and $445.0 million for the
Fiscal Year 2007 compared to $102.0 million and $434.5 million, respectively, in the comparable
periods of the prior year. Consolidated earnings before net interest expense, income tax expense,
depreciation and amortization (EBITDA) in the fourth quarter increased to $6.3 million versus
$4.2 million in the prior year. Consolidated EBITDA for Fiscal Year 2007 was $37.7 versus $39.1
million in the prior year.
Stephen M. Dyott, Chairman and Chief Executive Officer of American Color Graphics, Inc. stated,
Our full year results were disappointing. Excluding the non-cash impairment charge related to
information technology assets recorded last year and current year losses associated with the
start-up of a newspaper service facility, print operating results were comparable to the prior
year. Pure pricing in our print operations continues to be negatively impacted by modest excess
industry capacity. Price losses and cost problems at one of our plants were offset by positive
customer and product mix, volume growth and continuing cost controls. We are pleased with the growth of our
newspaper service business and we are making progress improving the productivity of the one print
facility that experienced significant operating problems in Fiscal Year 2007.
Our premedia operations are still weak due to reduced volume. We continue to believe we have the
best suite of premedia services available in our industry, and we are working hard to improve our
Our corporate expenses were higher than last year due to expenses related to two lawsuits in which
we are the plaintiff. Our legal expenses are anticipated to be lower in Fiscal Year 2008, with
respect to these two lawsuits.
The Company ended Fiscal Year 2007 with net debt of $352.1 million versus a comparable position of
$319.2 million at the end of Fiscal Year 2006, representing an increase in debt of $32.9 million
versus the prior year. In addition to the $37.7 million of reported EBITDA, other sources and uses
of cash during Fiscal Year 2007 included (1) interest payments of $36.1 million, including interest
payments on the Notes of $28.0 million, (2) cash capital expenditures of $12.7 million, (3) pension
contributions of $5.7 million, (4) debt issuance costs of $2.9 million, (5) cash restructuring
payments of $1.5 million, (6) cash taxes of $0.2 million and (7) working capital and other balance
sheet net cash uses of $11.5 million.
At March 31, 2007, the Company had additional borrowing capacity of $30.7 million under its two
credit facilities as follows:
||$5.9 million under the 2005 Revolving Credit Facility; and
||$24.8 million under the Receivables Facility, including $1.1 million based on
receivables purchased from Graphics at March 31, 2007 and an additional $23.7 million if
Graphics Finance had purchased from Graphics all other eligible receivables at March 31,
On March 31, 2007, the Company had borrowings outstanding under its 2005 Revolving Credit Facility
of $26.9 million and letters of credit outstanding of $22.2 million, resulting in the additional
borrowing capacity under this facility of $5.9 million, as noted above. The Company had borrowings
outstanding under the Receivables Facility of $4.7 million at March 31, 2007.
At March 31, 2007, the Company was in compliance with the covenant requirements set forth in the
2005 Credit Agreement and the Receivables Facility, as amended.