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CYBERBUCKS: Restructuring Plan OK’d for Anacomp

Restructuring Plan OK’d for Anacomp

Israeli Telecom Firm PacketLight Networks Sets Up U.S. Headquarters Here

Mike Allen

Senior Staff Writer

Anacomp, Inc., the Poway-based provider of document management software and other technical services, had its debt restructuring plan approved in federal Bankruptcy Court last week, setting the stage for the company’s re-emergence as a new entity Dec. 31.

Under the approved plan, Anacomp’s debt holders will become owners of 99.9 percent of its common stock, while existing shareholders will see their collective ownership dwindle to 0.1 percent.

It’s an arrangement that was agreed upon by the company following its default of loans and notes which began late last year. The firm has more than $350 million in debt.

The restructuring is Anacomp’s second in the last five years, and one that was completed over 10 weeks.

“In contrast to many other Chapter 11 proceedings, our restructuring plan has been simply about converting debt into equity,” said Phil Smoot, president and CEO. “It was not related to day-to-day operations of the company and our overall operating results have continued to improve.”

Well, things are improving, but the losses are still coming.

For its last quarter ended Sept. 30, Anacomp reported a net loss of $11.4 million on revenues of $71 million compared to a net loss of $41 million on sales of $87.6 million for the same period in the previous fiscal year.

For the 12 months, the company had a net loss of $47.5 million on revenues of $306.3 million, compared to a net loss of $111.4 million on revenues of $383.2 million.

Anacomp, founded in 1968 and with more than 2,000 employees worldwide, has some 350 employees locally, most of whom work at its Poway headquarters.

Attempting to get out of an unprofitable line, it shut down its manufacturing unit, Datagraphix, and now consists of two units, Document Solutions, which does document management outsourcing, and Technical Services, which provides maintenance services.

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Israeli Firm Moves Here: PacketLight Networks, a private telecom firm that emerged from an Israeli incubator in 1999, set up its U.S. headquarters in Sorrento Mesa last month.

“We see San Diego as a desirable place for sales, service and support, and a good place to draw appropriate technology talent,” said James Chitkowski, vice president of sales.

At the moment, PacketLight has seven employees at its Oberlin Drive office but that could change depending on sales, Chitkowski said.

PacketLight makes telecommunications equipment that enables carriers to provide high-speed connectivity to businesses.

The firm has some 95 employees at its research and development center outside Tel Aviv.

It also opened sales offices in New Jersey, Colorado and Northern California.

It counts as a strategic investor ADC Telecommunications, a Nasdaq-listed firm, which invested between $6 million and $7 million. All totaled, PacketLight has attracted some $29 million in venture capital funding, including Carlyle Europe Venture Partners, Pitango Venture Capital, and Portview Communications Partners.

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SVI Sells Subsidiary: SVI Solutions, the Carlsbad-based maker of software for retail chains, said it signed a definitive agreement to sell its wholly owned Australian subsidiary to an organization controlled by the former managers of the company.

CEO Barry Schechter, who returned last month to take over the company, made the deal in the face of declining revenues and a smaller Australian market. The company will focus its efforts on the U.S. and European markets.

For the most recent quarter ended Sept. 30, SVI reported a net loss of $3.6 million on revenues of $8.4 million, compared to a net loss last year of $4.7 million on revenues of $8 million.

The firm reported a six-month loss of $7.1 million on revenues of $16.3 million, compared to a net loss of $4.2 million on revenues of $19 million in the first half of the previous fiscal year.

SVI, traded on the American Stock Exchange, closed at 78 cents Dec. 12; its 52-week range was between $2.84 and 56 cents.

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Remec Loses $22 Million: Remec, Inc., the San Diego-based maker of microwave components used in wireless communications networks, reported a net loss of $6.2 million for its third quarter ended Oct. 26, on revenues of $52.5 million compared to a net profit of $5 million on revenues of $78.8 million in the like quarter last year.

For the nine months, Remec reported a net loss of $21.7 million on sales of $171.8 million, compared to net income of $9.6 million on revenues of $198.4 million.

Remec has reduced its work force, but the number of local employees hasn’t changed significantly over the past year, said CFO David Morash.

Total employment is at 3,600 while in San Diego it stood at 1,200, or just about the same. “We’ve consolidated our manufacturing here and our defense unit is doing well,” he said.

The company said it will announce the financial impacts of its reorganization efforts in the fourth quarter.

In other news, Remec said a class-action lawsuit filed in 1999 related to its 1998 secondary offering was dismissed, and the company made no payment to plaintiffs.

Send high-tech finance news to

mallen@sdbj.com.

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