Record Pro-Forma Profit
Monday March 19, 11:58 am Eastern Time
Press Release
Synergy Brands Announces a Record 4th Quarter Pro-Forma Profit for Fiscal 2000
Net Sales Up 133% to $6 Million in Q4 2000; Overall Year-To-Year Sales Rise 57% to $20.6 Million
SYOSSET, N.Y.--(BUSINESS WIRE)--March 19, 2001-- Synergy Brands, Inc. (Nasdaq:SYBR - news) announced today that they have reported their fiscal year end December 31, 2000 financial results. The Company reports that 4th quarter net sales have increased 133% to $6 million versus $2.5 million for the same period a year ago. Sales for fiscal year 2000 rose 57% to $20.7 million. The Company's B2B operation, DealByNet, represented over 80% of the total sales with the balance attributable to BeautyBuys.com and NetCigar.com, the Company's B2C operations. Since 1998 the Company has experienced a compounded sales growth greater than 50%. As a result of exchanging media assets acquired from The Sinclair Broadcast Group in an equity transaction, the Company recognized a cash infusion of $2.2 million as well as product purchase credits from ICON International, thereby substantiating the fiscal year end sales forecast of $22.9 million made by the Company in December of 2000.
The Company recorded a record Pro-forma Profit from operations of $996,000, or $.06 per share, for the 4th quarter 2000 as compared to a Pro-forma loss from operations of $124,235, or ($.01) per share, for the same period in 1999. Operational Pro-forma loss was reduced by 81% to $960,909 or ($.06) per share for the fiscal year end 2000. Amortization and non-cash charges for the year end and 4th quarter December 31, 2000 was $6.3 million versus $2.9 million and $4.6 million versus $6.2 million respectively. The Company had 17.7 million shares outstanding as of fiscal year end December 31, 2000.
As of December 31, 2000, the Company's net tangible assets have increased from $2.9 million ($.16 per share) to $7.8 million ($.44 per share). The Company attributes these favorable results to the strategic alliances made with The Sinclair Broadcast Group and ICON International, along with the increased activity of their B2B subsidiary, DealByNet.
``The Company's operating model should not require any cash infusions for the remainder of 2001,'' said Mair Faibish, Chairman and CEO. ``With the net tangible assets having grown to almost $8 million, the Company recorded a Pro-forma Profit in the 4th quarter of 2000 and expects continued Pro-forma Profits in 2001. Our orders are being financed by GE capital through a conventional line of credit. All these factors bode a traditional business model that has enabled the Company to thrive during the dot com collapse. Furthermore, most of our business relies on the marketing and merchandising of nationally branded products together with manufacturers that already spend billions of dollars to build their brands. The manufacturers of grocery products have encouraged DealByNet to use its platform to reduce product distribution costs through logistics. These potential cost reductions would be very substantial and could result in the acceleration of the usage of the DealByNet grocery exchange by this 750 billion-dollar industry,'' added Faibish.
``Synergy Brands has leveraged the procurement and distribution expertise of its staff and expects to become a serious participant in the business-to-business segment of the grocery industry'', stated Mr. Faibish. ``In reviewing and comparing our platform to potential competitors, we believe it is clear that we offer a superior product. The favorable reception we received at the recent Vendex show is a validation to the quality of our product.'' He further stated, ``We are applying the same Internet and advanced technologies to increase sales in our core business as we did with our B2C ventures.''
With B2B and B2C sectors using the efficiency of the Internet, consumer products can be distributed more efficiently and at a lower cost. The Company continues to use technology for application purposes. ``As the B2B economy evolves into XML connectivity, we will be relying on enterprise integration software,'' said Faibish.
``The key to growth is reducing cost for the major grocery manufacturers, wholesalers and retailers. Our presentations to these potential users demonstrate that the Internet can reduce the cost of warehousing and distribution through real time connectivity. We believe the grocery industry would invest in updating their systems.'' Faibish also stated that streamlining the logistics in the grocery industry is the Company's number one objective for 2001 and that the savings for the industry can be substantial through the use of the Company's DealByNet technology and platform. ``If we face resistance in this area in 2001, it would mitigate the projected business for dealbynet.com,'' he said.
Unaudited 2000 1999 Change Q4 2000 Q4 1999 Change
Total
Sales $20,665,018 $13,181,238 56.78% $5,967,153 $2,561,682 132.94%
Net
Income
(loss) from
operations(a)
(960,909) (3,349,616) -71.31% 996,210 (124,235) 901.88%
Per share (0.06) (0.32) 81.21% 0.06 (0.01) 527.54%
Weighted shares
outstanding
15,943,859 10,445,835 52.63% 17,724,000 9,450,000 87.56%
Unaudited 2000 1999 Q4 2000 Q4 1999
Amortization and
non-cash
charges 6,327,349 2,992,066 4,607,692 6,252,020
Net Pro-forma
loss after
amortization
and non-cash
charges (7,288,258)(6,341,682) (3,611,482) (6,376,255)
Pro-forma profit (loss) reflects net cash flow provided from operations and excludes amortization costs and non-cash charges In connection with the sale of media to Sinclair Broadcast Group and Icon International, the Company amortized the value of its advertising and in-kind services from Sinclair as well as recorded the sale of media to ICON as an equity transaction.
About Synergy Brands, Inc.
Synergy Brands, Inc. develops Internet properties that strategically partner with off-line and on-line media companies to capture e-commerce markets within the B2B and B2C Internet arena. The Company has developed the following Web sites: Netcigar.com, BeautyBuys.com, and DealByNet.com. Synergy Brands can be visited at synergybrands.com.
About BeautyBuys.com
A leading online B2C beauty department store consisting of thousands of unique nationally branded beauty products. The site handles 150,000 monthly unique visitors and has become the premier B2C beauty site on the Internet. SYBR's BeautyBuys subsidiaries generated approximately $4 million in sales in Fiscal 2000.
About Netcigar.com
A B2C e-tailer, Netcigar.com offers a comprehensive variety of premium hand-made cigars, cigar accessories, and upscale gift items. The Company also markets humidors, golf-themed gifts and unique accessories. Netcigar.com reported $239,000 in revenue for the fourth quarter 2000, a 184.53% increase over $84,000 for the same period in 1999.
About DealByNet.com
A B2B site, DealByNet.com is an Electronic Commerce Network (ECN) that enables manufacturers, wholesalers, and supermarket and drug chains to seamlessly integrate their product needs within an e-commerce environment. DealByNet.com is designed to enable major manufacturers to offer their best selling items through a platform that will manage all of the logistical, financial and merchandising details for the products offered. DealByNet.com is funded by GE capital through a revolving line of credit and plans alliances for enterprise integration technologies to achieve streamlined logistics in the grocery industry.
About Supply Chain Technologies, Inc.
An Applications Solutions Provider (ASP), Supply Chain Technologies, Inc. markets and implements the logistics and distribution system that was developed for the DealByNet.com B2B platform, and has applications in many industries.
The Private Securities Litigation Reform Act of 1995 provides a ``safe harbor'' for forward-looking statements. Certain information included in this news release (as well as information included in oral statements or other written statements made or to be made by Synergy Brands, Inc.) contains statements that are forward-looking, such as statements relating to consummation of the transaction, anticipated future revenues of the companies and success of current product offerings. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Synergy Brands, Inc. For a description of additional risks and uncertainties, please refer to Synergy Brands Inc.'s filings with the Securities and Exchange Commission, including forms 10-K and 10-Q.
SYNERGY BRANDS, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
December 31, 2000
UNAUDITED
ASSETS
Current assets
Cash and cash equivalents $ 2,234,113
Accounts receivable, less allowance for
doubtful accounts of $69,965 920,878
Inventory 1,187,783
Trade credits receivable 986,364
Other current assets 502,930
Total current assets 5,832,068
COLLATERAL SECURITY AND DEPOSITS 365,606
TRADE CREDITS RECEIVABLE 2,452,936
PROPERTY AND EQUIPMENT, net 621,055
WEB SITE DEVELOPMENT COSTS 897,313
TRADE NAMES, net of accumulated amortization
of $583,752 2,110,537
$ 12,279,515
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit $ 663,999
Note payable 555,763
Accounts payable and accrued expenses 3,156,455
Total current liabilities 4,376,217
COMMITMENTS AND CONTINGENCIES (Note 9) -
MINORITY INTEREST -
PREFERRED STOCK OF SUBSIDIARY 184,625
STOCKHOLDERS' EQUITY
Class A preferred stock - $.001 par value;
100,000 shares authorized 100
Class B preferred stock - $.001 par value;
10,000,000 shares authorized and no shares outstanding -
Common stock - $.001 par value;
49,900,000 shares authorized 17,627
Additional paid-in capital 35,700,908
Deficit (25,830,833)
Stockholders' notes receivable (115,629)
Stockholder's advertising and in-kind services receivable (1,886,000)
7,886,173
Less treasury stock, at cost, 1,400 shares (167,500)
Total stockholders' equity 7,718,673
$ 12,279,515
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