Exhibit 99.2
Contact: Kenneth A. Budde
Chief Financial Officer
AKI, Inc.
(423)624-3301
For Immediate Release
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AKI HOLDING CORP. AND ITS WHOLLY OWNED SUBSIDIARY
AKI, INC.
FOURTH QUARTER EARNINGS ANNOUNCED
New York, August 9 -- AKI today announced fourth quarter results for
the period ended June 30, 1999.
In June 1998, AKI, Inc., issued $115 million of 10 1/2% Senior Notes
due 2008 and AKI Holding Corp. issued $50 million of 13 1/2% Senior Discount
Debentures due 2009. These issues were completed under Rule 144A of the
Securities Act of 1933 and the company has completed an exchange offer for these
securities as prescribed by the terms of the offerings.
Net sales for the fourth quarter ended June 30, 1999, increased $2.9
million, or 20.6 percent, to $17.0 million compared with $14.1 million in the
1998 period. The net sales increase resulted from increases in the sales of
cosmetic sampling system products offset partially by the strength of the U.S.
dollar. Earnings before interest, taxes, depreciation and amortization
("EBITDA") increased $0.3 million or 15.0 percent to $2.3 million compared with
$2.0 million for 1998. The increase in EBITDA resulted primarily from the gross
profit associated with the increased sales and decreases in raw material costs,
partially offset by increased costs associated with the outsourcing of European
production and increased selling, general and administrative costs reflecting
increases in sales staffing and commissions and net increases in executive
compensation following the acquisition of the company and the strength of the
U.S. dollar.
Net sales for the year ended June 30, 1999, increased $14.7 million, or
20.6 percent, to $86.0 million compared with $71.3 million in the 1998 period.
The net sales increase resulted from increases in the sales of cosmetic sampling
system products and sales to the consumer products industry offset partially by
the strength of the U.S. dollar. EBITDA increased $3.7 million or 22.6 percent
to $20.1 million compared with $16.4 million for 1998. The increase in EBITDA
resulted primarily from the gross profit associated with the increased sales and
decreases in raw material costs, partially offset by increased costs associated
with the outsourcing of European production, and increased selling, general and
administrative costs reflecting increases in sales staffing and commissions and
net increases in executive compensation following the acquisition of the company
and the strength of the U.S. dollar.
Statements made in this press release that state the company's or
management intentions, beliefs, expectations of predictions for the future are
forward-looking statements. It is important to note that the company's actual
results could differ materially from those projected in such forward-looking
statements. In addition to the factors set forth above, other important factors
that could cause actual results to differ materially include, but are not
limited to general economic and business conditions, industry trends, the loss
of major customers or suppliers, the timing of orders received from customers,
cost and availability of raw materials, changes in business strategy or
development plans, availability and quality of management, and availability,
terms and deployment of capital. Additional information concerning factors that
could cause actual results to differ materially from those in the
forward-looking statements is contained from time to time in the company's SEC
filings. Copies of these filings may be obtained by contacting the company or
SEC. The company disclaims any intention or obligation to update or review any
forward-looking statements, whether as a result of new information, future
events or otherwise.
AKI, INC.
JUNE 30, 1999
(In thousands)
Three months Year
I. ended June 30 II. Ended June 30
1998 1999 1998 1999
Summary Income
Statement Data
Net Sales 14,084 16,988 71,252 85,967
Gross profit 3,479 5,697 23,925 30,768
Selling, general & administrative
expenses
2,405 4,167 11,290 14,500
Income from operations
104 378 9,966 11,662
Interest expense 6,106 3,276 13,915 13,028
Net (loss) (4,124) (2,175) (3,661) (2,591)
Other data
Depreciation & amortization
1,947 1,926 6,410 8,487
Capital expenditures
259 426 1,321 2,856
EBITDA 2,051 2,304 16,376 20,149
Summary Balance
Sheet Data:
Cash 1,641 7,015
Current assets 23,630 29,295
Total assets 211,038 210,853
Current liabilities 10,785 14,442
Long-term debt,
excluding current portion 116,489 116,349
Total liabilities 131,417 134,131
Stockholders equity 79,621 76,722
A full report will be available in the Form 10-K to be filed with the securities
and Exchange Commission.
August 9, 1999
AKI Holding Corp.
JUNE 30, 1999
(In thousands)
Three months Year
III. Ended June 30 IV. Ended June 30
1998 1999 1998 1999
Summary Income
Statement Data
Net Sales 14,084 16,988 71,252 85,967
Gross profit 3,479 5,697 23,925 30,768
Selling, general & administrative
expenses
2,405 4,167 11,290 14,500
Income from operations
104 378 9,966 11,662
Interest expense 6,164 4,237 13,973 16,740
Net (loss) (4,163) (2,849) (3,700) (5,116)
Other data
Depreciation & amortization
1,947 1,926 6,410 8,487
Capital expenditures
259 426 1,321 2,856
EBITDA 2,051 2,304 16,376 20,149
Summary Balance
Sheet Data:
Cash 3,842 7,015
Current assets 25,831 29,295
Total assets 214,521 213,579
Current liabilities 10,785 14,442
Long-term debt,
excluding current portion 142,509 146,000
Total liabilities 157,437 163,782
Stockholders equity 57,084 49,797
A full report will be available in the Form 10-K to be filed with the securities
and Exchange Commission.
August 9, 1999