MAJOR PNEC NEWS!
Wednesday September 9, 8:44 am Eastern Time
Company Press Release
Planet Entertainment Announces
Agreement to Purchase Northeast One
Stop, Inc.
MIDDLETOWN, N.J.--(BUSINESS WIRE)--Sept. 9, 1998--Planet Entertainment Corp. (OTC BB:PNEC) has announced today the signing of an agreement to acquire effective September 1, 1998 all the issued and outstanding common stock of Northeast One Stop, Inc. (''NEOS'') principally in consideration for cash and short term notes, subject to the approval by NEOS' financing institution.
The primary business activity of NEOS is the wholesale distribution of recorded music and video products. Located in Latham, New York, NEOS was recently voted Medium Wholesaler of The Year at the 1998 National Association of Record Manufacturers (''NARM'') Convention. The
Company, established in 1982, operates sales offices in Michigan, Pennsylvania, Vermont, Maryland and New York, and currently employs approximately 140 full and part-time people.
For the fiscal year ended August 31, 1997, NEOS reported annual revenues of approximately $23 million, and was marginally profitable. For the year ended August 31, 1998, NEOS is expected to produce revenues of approximately $34 million, an increase of approximately 48 percent from the previous year. The increase is due in large part to NEOS' decision in 1997 to bring on board Ron Nicks and Jay Fink, both formerly of CD-One Stop, to head the ''One Stop'' division, and along
with Bill Castle, who heads Summit Entertainment, NEOS' ''rack job'' division that sells to mass merchandisers. Louis Del Signore, the former owner and chairman of NEOS, has agreed to remain with NEOS, and has agreed to join the Board of Directors of Planet Entertainment, along with Castle and Nicks.
NEOS' ''One-stop'' division operates as a centralized order fulfillment center for small to medium sized retail stores, typically record stores, that obtain from it a wide-variety of recorded music and video. NEOS' ''Rack-jobber'' division distributes recorded music and video through entertainment departments and kiosks in retail and mass merchandise stores. NEOS has gained the reputation as being one of the most reliable music distributors in the country. As industry innovators, NEOS uses a fully integrated, computer driven, automated carousel system allowing faster response time, instant access to over 100,000 titles and the lowest shipping error rate in the industry.
Planet Entertainment Corporation owns certain rights associated with the exploitation of approximately 15,000 original musical master recordings and is principally engaged in the acquisition, enhancement, licensing, and re-release of existing music catalogues, and the production of new artists, for sale in a variety of formats including compact disk (CD) and digital video disk (DVD). The Company owns and operates a 48-track sound recording studio and sound restoration
lab near Philadelphia, Pennsylvania run by Joseph Venneri, one of the top restoration engineers in the industry.
John S. Arnone, Planet Entertainment's President and CEO stated, ''With the opportunity to distribute Planet's proprietary catalogue of master recordings through NEOS, this acquisition was a natural fit for the Company. More importantly, this acquisition completes the next step in Planet Entertainment's mission to be a content provider to traditional retail as well as Internet driven orders. Planet's website (www.Planetentertainment.com) is currently under construction. ''Now with this acquisition, we can move forward with the planned development of the site, which will enable Planet's website to offer not only our proprietary catalogue of approximately 15,000 master
recordings, but also front-line and catalogue from all music labels. Our web site will not only provide Internet delivery but will be different from our competitors by being the website for retailers as well as Internet buyers.
The management of Planet Entertainment now believes it can be more price and service competitive in the marketplace than CD-Now, Inc. (NASDAQ:CDNW - news), N2K, Inc. (NASDAQ:NTKI - news), and KTEL Corporation (NASDAQ:KTEL - news) by potentially becoming the largest
Internet music delivery system by owning its own in-house fulfillment division as well as by producing its own proprietary product at low cost to be offered by both the Internet and traditional retailers.
Special Note Regarding Forward Looking Statements: A number of statements contained in this press release are forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. These risks and uncertainties include but are not limited to: the Company's vulnerability to rapid industry change, technical obsolescence, limited customer base and reliance on relatively a small number of its customers, the possible impact of competitive products and pricing, uncertainties in the duration of the life cycle of its products, manufacturing difficulties, dependence on key personnel, market acceptance, reliance on a limited number of outside vendors, potential difficulties, managing growth, the ability to perform on existing and future agreements, the availability of financing, and other risks all, or any of which may have a material adverse impact on the company, its business, business prospects, and financial condition.
Contact:
Planet Entertainment Corporation
Wallace M. Giakas or John S. Arnone, 732/530-8819
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