Disc Graphics, Inc. Announces Consolidation of Operations and Reports Fourth Quarter and Year End Financial Results

Apr 17, 2001, 01:00 ET from Disc Graphics, Inc.

    HAUPPAUGE, N.Y., April 17 /PRNewswire/ -- Disc Graphics, Inc. ("Disc
 Graphics" or the "Company") (Nasdaq: DSGR) today announced a redeployment of
 its manufacturing assets and a consolidation of its operations, and reported
 quarterly and year-end revenues and earnings for the fourth quarter and year
 ended December 31, 2000.
     Commenting on the fourth quarter and year-end results, Donald Sinkin,
 Chairman and Chief Executive Officer, said: "The year 2000 was  challenging
 for Disc Graphics.   We completed a major expansion of our Hauppauge, New York
 facility and consolidated the Contemporary Color Graphics operations into the
 Hauppauge facility, but the weakening economy, the bankruptcy of one of our
 largest customers, and trends in the music and home entertainment industries
 posed particular challenges.  During the first quarter of 2001 we reevaluated
 our manufacturing capacity and fixed costs in the face of declining revenues,
 and decided to close our Indiana facility in light of the marginal incremental
 sales generated there ($1.8 million or less than 3% of total Company sales in
 2000) and our ability to absorb the remaining work in both New York and
 California.  The importance of our physical presence in the Midwest diminished
 with quicker turnaround times resulting from our new digital capacity, and by
 redeploying high quality equipment from Indiana to California we will be able
 to continue to deliver quality, service and price to our customers,
 coast-to-coast."
     Disc Graphics's fourth quarter 2000 revenues decreased by 20.6% to
 $15,404,308 compared with revenues of $19,412,868 in the fourth quarter of
 1999.  The fourth quarter net loss was ($2,532,110) or ($.46) per share based
 on 5,518,248 diluted shares compared to net income of $757,571 or $.14 per
 share based on diluted 5,527,311 shares in 1999.  The Company took a one-time
 after-tax charge of $2,248,000  in the fourth quarter of 2000 related to the
 revaluation of certain assets affected by its restructuring plan, including
 assets from the Indiana facility and other under utilized assets in New York
 and California, and the write-off of goodwill associated with the potential
 loss of local commercial printing business in Indiana.
     Revenues for the year ended December 31, 2000 decreased 3.8% to
 $65,376,090 from $67,987,941 for the same period a year ago.  The net loss for
 the year was ($4,728,489) or ($.86) per share based on 5,518,269 diluted
 shares, compared to net income of $2,506,920 or $.45 per share on 5,540,265
 diluted shares outstanding in 1999.  The 2000 net loss includes the
 one-time charge discussed above.
     Mr. Sinkin continued: "2000 was also an invigorating year for the Company.
 As part of the expansion of our New York facility, we installed new digital
 technologies, including high speed data transmission, digital proofing and
 computer-to-plate capabilities, we fully implemented ISO 9001 standard
 operating procedures with a goal of certification in 2001, we reconfigured our
 production and customer support teams to improve responsiveness and customer
 service, and added several highly competent managers.  We also worked hard on
 new sales initiatives in a softening economy, and forged a new relationship
 with a major studio to print their DVD work.  Looking toward the future, we
 are excited about our joint venture in a new miniflute packaging business.  We
 believe the redeployment and consolidation of the Company's assets, together
 with other cost-saving measures taken over the last six months, reduces the
 Company's overhead and places the Company in a better financial position."
     Disc Graphics, headquartered in Hauppauge, NY, is a diversified
 manufacturer and printer of specialty packaging focused on the home video,
 pharmaceutical, music, publishing and cosmetic markets.  Disc Graphics'
 products include prerecorded video, CD-ROM and audiocassette packaging,
 folding cartons for pharmaceuticals and cosmetics, book jackets, posters,
 pressure-sensitive labels and general commercial printing.  After this
 consolidation, Disc Graphics will have three manufacturing facilities
 nationwide.   This press release contains forward-looking statements, and
 there can be no assurance that the partnership with a major studio or the
 entree into other national accounts will result in the anticipated sales or
 that the consolidation will result in the anticipated efficiencies and reduced
 costs.
 
 
                              Financial Highlights
                                  (Unaudited)
 
 
                                 For the Three             For the Twelve
                                 Months Ended               Months Ended
 
                           12/31/00      12/31/99     12/31/00      12/31/99
     Revenues           $15,404,308   $19,412,868  $65,376,090   $67,987,941
 
     Cost of goods
      sold               11,709,932    14,540,896   53,644,234    50,697,468
 
     Income before
      taxes            *(3,836,110)     1,268,571 *(7,271,489)     4,182,920
 
     Net income        $(2,532,110)      $757,571 $(4,728,489)    $2,506,920
 
     Income per
      common share:
 
     Basic                   $(.46)          $.14       $(.86)          $.45
 
     Diluted                 $(.46)          $.14       $(.86)          $.45
 
 
     Weight average number
      of common shares
      outstanding:
 
     Basic                5,518,248     5,518,352    5,518,269     5,518,361
 
     Diluted              5,518,248     5,527,311    5,518,269     5,540,265
 
     * Includes a one-time $3,458,000 pre-tax asset impairment charge.
 
 

SOURCE Disc Graphics, Inc.
    HAUPPAUGE, N.Y., April 17 /PRNewswire/ -- Disc Graphics, Inc. ("Disc
 Graphics" or the "Company") (Nasdaq: DSGR) today announced a redeployment of
 its manufacturing assets and a consolidation of its operations, and reported
 quarterly and year-end revenues and earnings for the fourth quarter and year
 ended December 31, 2000.
     Commenting on the fourth quarter and year-end results, Donald Sinkin,
 Chairman and Chief Executive Officer, said: "The year 2000 was  challenging
 for Disc Graphics.   We completed a major expansion of our Hauppauge, New York
 facility and consolidated the Contemporary Color Graphics operations into the
 Hauppauge facility, but the weakening economy, the bankruptcy of one of our
 largest customers, and trends in the music and home entertainment industries
 posed particular challenges.  During the first quarter of 2001 we reevaluated
 our manufacturing capacity and fixed costs in the face of declining revenues,
 and decided to close our Indiana facility in light of the marginal incremental
 sales generated there ($1.8 million or less than 3% of total Company sales in
 2000) and our ability to absorb the remaining work in both New York and
 California.  The importance of our physical presence in the Midwest diminished
 with quicker turnaround times resulting from our new digital capacity, and by
 redeploying high quality equipment from Indiana to California we will be able
 to continue to deliver quality, service and price to our customers,
 coast-to-coast."
     Disc Graphics's fourth quarter 2000 revenues decreased by 20.6% to
 $15,404,308 compared with revenues of $19,412,868 in the fourth quarter of
 1999.  The fourth quarter net loss was ($2,532,110) or ($.46) per share based
 on 5,518,248 diluted shares compared to net income of $757,571 or $.14 per
 share based on diluted 5,527,311 shares in 1999.  The Company took a one-time
 after-tax charge of $2,248,000  in the fourth quarter of 2000 related to the
 revaluation of certain assets affected by its restructuring plan, including
 assets from the Indiana facility and other under utilized assets in New York
 and California, and the write-off of goodwill associated with the potential
 loss of local commercial printing business in Indiana.
     Revenues for the year ended December 31, 2000 decreased 3.8% to
 $65,376,090 from $67,987,941 for the same period a year ago.  The net loss for
 the year was ($4,728,489) or ($.86) per share based on 5,518,269 diluted
 shares, compared to net income of $2,506,920 or $.45 per share on 5,540,265
 diluted shares outstanding in 1999.  The 2000 net loss includes the
 one-time charge discussed above.
     Mr. Sinkin continued: "2000 was also an invigorating year for the Company.
 As part of the expansion of our New York facility, we installed new digital
 technologies, including high speed data transmission, digital proofing and
 computer-to-plate capabilities, we fully implemented ISO 9001 standard
 operating procedures with a goal of certification in 2001, we reconfigured our
 production and customer support teams to improve responsiveness and customer
 service, and added several highly competent managers.  We also worked hard on
 new sales initiatives in a softening economy, and forged a new relationship
 with a major studio to print their DVD work.  Looking toward the future, we
 are excited about our joint venture in a new miniflute packaging business.  We
 believe the redeployment and consolidation of the Company's assets, together
 with other cost-saving measures taken over the last six months, reduces the
 Company's overhead and places the Company in a better financial position."
     Disc Graphics, headquartered in Hauppauge, NY, is a diversified
 manufacturer and printer of specialty packaging focused on the home video,
 pharmaceutical, music, publishing and cosmetic markets.  Disc Graphics'
 products include prerecorded video, CD-ROM and audiocassette packaging,
 folding cartons for pharmaceuticals and cosmetics, book jackets, posters,
 pressure-sensitive labels and general commercial printing.  After this
 consolidation, Disc Graphics will have three manufacturing facilities
 nationwide.   This press release contains forward-looking statements, and
 there can be no assurance that the partnership with a major studio or the
 entree into other national accounts will result in the anticipated sales or
 that the consolidation will result in the anticipated efficiencies and reduced
 costs.
 
 
                              Financial Highlights
                                  (Unaudited)
 
 
                                 For the Three             For the Twelve
                                 Months Ended               Months Ended
 
                           12/31/00      12/31/99     12/31/00      12/31/99
     Revenues           $15,404,308   $19,412,868  $65,376,090   $67,987,941
 
     Cost of goods
      sold               11,709,932    14,540,896   53,644,234    50,697,468
 
     Income before
      taxes            *(3,836,110)     1,268,571 *(7,271,489)     4,182,920
 
     Net income        $(2,532,110)      $757,571 $(4,728,489)    $2,506,920
 
     Income per
      common share:
 
     Basic                   $(.46)          $.14       $(.86)          $.45
 
     Diluted                 $(.46)          $.14       $(.86)          $.45
 
 
     Weight average number
      of common shares
      outstanding:
 
     Basic                5,518,248     5,518,352    5,518,269     5,518,361
 
     Diluted              5,518,248     5,527,311    5,518,269     5,540,265
 
     * Includes a one-time $3,458,000 pre-tax asset impairment charge.
 
 SOURCE  Disc Graphics, Inc.