We hit 100 tomorrow, The shorts run and we run to 108 tomorrow. IMO
MSGI Reports Record Fourth Quarter and Fiscal 1999 Year-End Results;
Quarterly Revenue up 42% Year-Over-Year
NEW YORK, Sep 28, 1999 (BUSINESS WIRE) -- Marketing Services Group,
Inc. (Nasdaq: MSGI), an integrated marketing and Internet services
industry leader, today announced record results for the fourth quarter
and fiscal year-ended June 30, 1999.
Revenue for the fourth fiscal quarter increased 42% to $25,885,170, as
compared to $18,277,089 for the same period in fiscal 1998,
representing the 11th consecutive quarter of double-digit growth. Net
loss for the fourth quarter, excluding preferred dividends and a
one-time severance charge, was $2,741,283 or ($0.14) per share, based
on weighted average shares outstanding of 19,473,263. This compares to
a net income of $350,373 or $0.02 per share reported in the fourth
quarter one year ago, based on weighted average shares outstanding of
14,113,312. The loss was principally attributed to weak results from
telemarketing operations, which was adversely affected by a failed bid
to unionize the subsidiary's call center as well as the issuance of
options related to the CMG Direct acquisition and increased
amortization of goodwill associated with recent acquisitions.
MSGI paid its final preferred dividend in the fourth quarter. This
resulted in a charge of $10,915,433 or ($0.56) per share relating to
additional shares issued to GE Capital as part of their 1997 stock
purchase agreement. MSGI converted GE Capital's preferred shares to
common shares on April 22, 1999, thus eliminating any preferred
dividends for the current fiscal year. Including the preferred
dividends and one-time severance charge, net loss for the fourth
quarter was $14,781,715 or ($0.76) per share.
Revenue for the fiscal year-ended June 30, 1999 increased more than 60%
to $82,241,894 as compared to $51,174,063 for the fiscal year-ended
June 30, 1998. Net loss for the year, excluding preferred dividends and
a one-time severance charge, was $6,520,603 or a loss of ($0.45) per
share, based on weighted average shares outstanding of 14,552,444. This
compares to a loss of $780,478 or ($0.06) per share for the fiscal year
ended June 30, 1998, based on weighted average shares outstanding of 12,
892,323. Preferred dividend charges relating to additional shares
issued to GE Capital as part of their 1997 stock purchase agreement
totaled $12,535,329 or ($0.86) per share and is eliminated for the
current fiscal year. Including the preferred dividends and one-time
severance charge, net loss for the fiscal year ended June 30, 1999 was
$20,180,932 or ($1.39) per share.
On a consolidated basis, direct marketing, excluding telemarketing,
continued to realize healthy growth, contributing positively to net
income from operations. The net loss for the year was principally
attributable to fulfillment operations, telemarketing operations, the
issuance of options related to the CMG Direct acquisition and increased
amortization of goodwill associated with recent acquisitions. MSGI
divested its majority interest in its fulfillment operations effective
March 1, 1999 and appointed a new president in charge of telemarketing
operations on July 1, 1999.
"MSGI has experienced a very full and event-driven year and we are
extremely pleased with the progress the Company has made across the
spectrum of our services," commented Jeremy Barbera, Chairman and Chief
Executive Officer of MSGI. "We are most excited by our Internet
operations, which realized an organic growth rate of 53% for the fiscal
year. Direct marketing operations, excluding telemarketing, continued
to experience internal growth in excess of 10%. Though telemarketing
was adversely affected in the recent quarter by a failed attempt to
unionize the call center, we are optimistic about the progress of this
group going forward as new management has been in place since the
beginning of the new fiscal year. We will, however, continue to
thoroughly assess the viability of this division over the near term."
Mr. Barbera continued, "MSGI Internet has experienced a very active
year, including the acquisition of CMG Direct, followed by minority
investments in Screenzone Media Networks and GreaterGood.com. We've
formed a new Internet division, WiredEmpire, from CMG Direct's
PermissionPlus technology and recently expanded its Internet offerings
with the agreement to acquire Cambridge Intelligence Agency."
MSGI's Internet group also experienced a number of material client wins
for the year. Pegasus Internet is developing the online trading system
for National Securities Corporation and signed the Cameron Mackintosh
account, know for Phantom of the Opera, Les Miserables and Miss.
Saigon. WiredEmpire gained contracts with Levi Strauss & Co., Datek
Online, Magnitude Network and Federal Express Corporation's advertising
agency, RTC Direct.
"As we move into a new fiscal year, we do so on the strongest financial
footing in our history, and with a very deliberate focus: the
improvement of operating leverage and profitability; the rapid
expansion of Internet operations; continued minority investments as our
incubation business develops; and opportunistic transactions for our
direct marketing operations," added Mr. Barbera. "Furthermore, in an
effort to improve the integration, leverage and profitability across
all of our subsidiaries, MSGI expects to fill a newly established
position of Chief Operating Officer this fall."
Recent Highlights:
September 1999
-- MSGI completed their $31 million private placement to retire all
short and certain long-term debt, to complete the Company's
announced Internet investments and to provide general working
capital.
August 1999
-- WiredEmpire was formed, a new company in MSGI's Internet Group to
be derived from CMG Direct's PermissionPlus(TM) technology.
-- MSGI's WiredEmpire agreed to acquire Cambridge Intelligence
Agency, a leading provider of Web-based e-mail response
management solutions.
-- MSGI amended its warrant agreement with GE Capital. The December
1997 warrant agreement required MSGI to file for a secondary
offering by December 1999, allowing GE Capital to sell
approximately 1.7 million of their 4.8 million common shares. The
agreement required MSGI to offer GE a warrant convertible to an
amount up to 10,670,000 shares to be invoked if a secondary had
not been filed in the time allotted. The August 1999 amendment
allowed for two changes to the original warrant agreement,
including an extension for a secondary filing through April 30,
2000 and the addition of a private placement as a vehicle to
satisfy the original condition. |
