Todd,
Any comment on the warning from National Media on Dec. 19.
Thursday December 19 4:09 PM EDT
National Media Expects Loss in Its Third Fiscal Quarter, Return to Profitability Anticipated in Fourth Quarter
PHILADELPHIA, Dec. 19 /PRNewswire/ -- National Media Corp announced today that for its third fiscal quarter which will end December 31, 1996, it expects to report a loss of up to $5.0 million, or $.16 per fully diluted share.
Mark P. Hershhorn, President and Chief Executive Officer of National Media said, "We expect National Media to return to profitability in our fourth fiscal quarter ending March 31,1997. The loss expected for the third quarter is principally a result of a downturn in our U.S.
business. By contrast, our international business continued to be profitable during the same period, though our Japanese business was off due to increased competition and the fact that we did not add Japanese airtime in the quantity or speed we had anticipated."
The estimate is based on currently available information. The Company will report its actual quarterly results at the end of January.
Mr. Hershhorn said, "There are three principal factors that have negatively affected our U.S. business. First, primarily through our acquisition of Nancy Langston and Associates, an infomercial media buying agency, we added significant blocks of infomercial media time in the U.S., some of which we anticipated selling in the pre-holiday period. That didn't happen as market conditions reduced the demand for infomercial media time during the quarter.
"Second, we did not bring shows to market quickly enough to fill excess media time, nor were we able to scale up product manufacturing for new shows quickly enough to ship product against orders generated in the third quarter. Revenues are not realized until products are shipped against orders.
"Third, even though demand for infomercial media time was down, media costs rose considerably in the third fiscal quarter over the comparable quarter a year ago, a phenomenon which has affected our entire industry. To address this problem we have been renegotiating
media rates with both the broadcast and cable providers with significant success."
Mr. Hershhorn went on to say, "In addition to renegotiating media rates the company is taking additional corrective measures, including consolidation of all of our media buying/sales activities under one executive head; the testing or airing of several new infomercials by the end of the fourth fiscal quarter; cost reductions; and continuation of the company's emphasis on profitable international expansion."
Mr. Hershhorn said, "While we continue to believe that ours is a business with tremendous long-term, global potential, it is also a business, particularly in the U.S. market, often characterized by short-term volatility, both positive and negative. We are working to build a business model in the United States designed to reduce the risks inherent in the domestic business."
The Company also reported that Brian McAdams, Chairman of the Board of National Media Corporation, announced that he has decided to step down as Chairman and as an officer of the Company at the end of the calendar year. He will continue to serve as a director of the Company.
Ira M. Lubert, a managing director of TL Ventures, (a venture capital fund affiliated with Safeguard Scientifics, Inc.) and currently a member of the Board of Directors, will serve as interim Chairman of the Board. (Robert E. Keith, Jr., President and Chief Executive Officer of TL Ventures, was appointed to National Media's Board of Directors at the Board of Directors meeting of November 14, 1996.)
"In his years of service to National Media Corporation Brian McAdams has brought a great sense of dedication and a global strategy which is the basis for the international transactional television opportunities now being realized by the Company," Lubert said.
Brian McAdams said, "National Media Corporation has become a truly international television marketing force. I look forward to my continuing role at the Company as we move our business forward throughout the world."
National Media Corporation is the world's fastest growing transactional television programming company and brings its programming to more than 289 million households worldwide.
This press release contains forward-looking statements. The Company wishes to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and is including this statement for the purpose of availing itself of such provisions.
Examples of forward-looking statements include, but are not limited to, (i) projections of revenues, income or loss, profitability, earnings or loss per share and other financial indicators,
(ii) statements of plans or objectives of the Company's management or Board of Directors and (iii) other statements about the Company or the infomercial industry.
The Company's ability to predict projected results or the effect of certain events on the Company's results of operations is inherently uncertain. Therefore the Company wishes to caution each reader of this release to carefully consider certain factors, including competition
for customers, media pricing and access, market conditions regarding buyers and sellers of media, the potential effect of litigation involving the Company, the risks of doing business in the
U.S. and the international marketplace, issues related to entering new markets, the inherent difficulty in identifying successful products, locating efficient suppliers of such products and bringing such products to market in a timely fashion and other factors, each of which could affect the ability of the Company to achieve its projected results and may cause actual results to differ materially from those expressed herein.
To request previous press releases on National Media Corporation please contact, PR Newswire at 800-758-5804, Ext. 604644. SOURCE National Media Corporation |
