earnings biz.yahoo.com
Monday February 8, 10:52 am Eastern Time
Company Press Release
SOURCE: Multiple Zones International, Inc.
Multiple Zones Announces Fourth Quarter and Year-End 1998 Results
Internet Sales Through Zones.com Grow 285% to $18.5 Million in the Fourth Quarter and 387% to $47.5 Million for the Year
Outbound Sales to Small and Medium Sized Businesses Climb 23% to $50.2 Million in the Fourth Quarter and 22% to $176.3 Million for the Year
RENTON, Wash., Feb. 8 /PRNewswire/ -- Multiple Zones International, Inc. (Nasdaq: MZON - news), a leading direct marketer of over 100,000 computer products to businesses and consumers, today announced its fourth quarter and year ended December 31, 1998 results. Fourth quarter 1998 net sales grew to $146,431,000, a 17.8% increase from net sales of $124,329,000 in the third quarter of 1998 and a 2.0% increase from net sales of $143,502,000 in the fourth quarter of 1997. For the year ended December 31, 1998, net sales increased 2.3% to $501,441,000 from $490,025,000 in the prior year. Sales from international operations were $25.0 million during the fourth quarter of 1998 and $79.8 million for the year.
''The company's focus on Internet-based sales, outbound sales to business customers and cost reductions have continued in the fourth quarter. We believe that providing a high-tech, high-touch environment for our customers is the best way to return to sustained profitability,'' commented Phil Lalji, President and CEO of Multiple Zones. ''High-tech, high-touch means that we will continually utilize cutting-edge technologies to serve our customers, while providing the personalized, top-notch human service, wide selection of brand name products and competitive prices that our customers have come to expect.''
The company reported net income of $519,000, or $0.04 cents per share, for the fourth quarter of 1998. This compares to a net income of $466,000, or $0.04 cents per share, in the fourth quarter of 1997. For the year ended December 31, 1998, Multiple Zones reported a loss of $8,333,000, or $0.64 cents per share, which compares to a loss of $5,443,000, or $0.42 cents per share, for the year ended December 31, 1997.
1998 Highlights
Net sales through the company's online computer superstore, Zones.com, grew to $18.5 million in the fourth quarter of 1998, up 36.2% sequentially from net sales of $13.6 million in the third quarter of 1998 and up 284.5% from fourth quarter 1997 net sales of $4.8 million. Year-over-year online net sales grew 386.8% to $47.5 million for the year ended December 31, 1998 from $9.8 million in the prior year.
In the fourth quarter, Multiple Zones added new services to Zones.com and established new relationships with key Internet players. On December 23, 1998, the company launched an auction store within Zones.com (http://www.auctions.zones.com) to provide its customers another high-tech way to order products online. The company also recently announced a promotional partnership with InfoSpace.com in which Zones.com is named on every page of the InfoSpace.com site.
''We continue to invest in our Internet growth strategy with the goal of increasing Zones.com visibility and reach. To drive traffic to the site we are partnering with companies like InfoSpace.com and marketing the site in the Yahoo! Store(TM), The Wall Street Journal and several Ziff-Davis and CNET properties,'' stated Lalji. ''To further enhance e-commerce initiatives, Multiple Zones has just signed a development agreement with Bright Stone, Inc., a leading Internet and e-commerce company to provide EDI and GUI interface integration to the company's legacy systems. Our objective is to reduce costs while providing an easy order entry system for our Account Executives.''
Outbound Sales Climb
Outbound sales to business and public sector accounts in the fourth quarter were $50.2 million, representing a 9.3% sequential increase and a 23.3% increase over the prior year quarter (excluding $9.2 million in fourth quarter 1997 sales to corporate resellers, which have been discontinued). For the year ended December 31, 1998, continuing outbound sales rose 22.2% to $176.3 million from $144.3 million in the prior year.
In hand with the company's high-tech, high-touch emphasis, the number of Outbound Account Executives (AE's) increased to 142 at the end of the fourth quarter, up 22.4% from 116 AE's at the end of the third quarter of 1998.
Balance Sheet and Asset Management
Cash levels at December 31, 1998 were $19.1 million, up from $1.6 million at December 31, 1997 and up from $13.6 million at September 30, 1998. The company also has unused credit lines, with major financial institutions, of $35 million. Net inventory was $48.5 million, including approximately $15 million in transit. Inventory turns, a measure of asset productivity, grew to 15.7 times in the quarter (excluding inventory in transit), up from 14.7 times in the third quarter of 1998 and up from 12.2 times in the fourth quarter of 1997.
About Multiple Zones International, Inc.
Multiple Zones International, Inc. is a leading direct marketer of over 100,000 computer products to businesses and consumers. The company serves customers through its Internet SuperStore, Zones.com, and its flagship brands: The PC Zone®, The Mac Zone® and The Learning Zone®, with products from leading manufacturers, including IBM, Compaq, HP, Microsoft and Apple.
The PC Zone was given a ''Best Buy'' award by Computer Shopper magazine in 1998 and The Mac Zone was one of the first businesses to earn ''Gold'' status under Apple Computer, Inc.'s Learn and Earn program. The Gold status assures Mac customers that they are speaking with an Apple expert who knows and understands their needs.
A team of skilled, customer-dedicated Account Executives serves the needs of the business, education and government markets. The company was founded in 1988, and is headquartered in Renton, Washington. Orders can be placed and catalogs requested at zones.com or by calling 1-800-258-2088.
Statement under the Private Securities Litigation Reform Act of 1995:
With the exception of the historical information contained herein, the matters described herein contain forward-looking statements that involve risk and uncertainties. Risk factors are described generally in the Risk Factors section of the company's 10-K dated March 31, 1998.
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the year ended December 31, 1998 and 1997
(in thousands, unaudited)
For the year For the three months
ended December 31, ended December 31,
1998 1997 1998 1997
Net Sales $501,441 $490,025 $146,431 $143,502
Cost of Sales 447,005 431,905 130,175 125,946
Gross Profit 54,436 58,120 16,256 17,556
Selling, General
and Administrative
Expenses 63,409 62,910 15,260 16,418
Income (loss) from
operations (8,973) (4,790) 996 1,138
Other expenses 3,474 1,618 14 586
Income (loss) before
income taxes (12,447) (6,408) 982 552
Provision for
(benefit from)
income taxes (4,114) (965) 463 86
Net income (loss) $(8,333) $(5,443) $519 $466
Basic earnings
(loss) per share $(0.64) $(0.42) $0.04 $0.04
Weighted average
shares used in
computation of
basic earnings
(loss) per share 13,079 12,965 13,103 13,031
Diluted earnings
(loss) per share $(0.64) $(0.42) $ 0.04 $ 0.04
Weighted average
shares used in
computation of
diluted earnings
(loss) per share 13,079 12,965 13,400 13,074
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except for per share data, unaudited)
Year ended Second Qtr. Year ended
December 31, 1998 Charges and December 31, 1998
As reported Adjustments w/o Charges and Adj's
Net Sales $501,441 $224 $501,217
Cost of Sales 447,005 3,088 443,917
Gross Profit 54,436 (2,864) 57,300
Selling, General
and Administrative
Expenses 63,409 2,341 61,068
Loss from operations (8,973) (5,205) (3,768)
Other expense (income) 3,474 3,481 (7)
Loss before taxes (12,447) (8,686) (3,761)
Benefit for taxes (4,114) (2,953) (1,161)
Net Loss $(8,333) $(5,733) $(2,600)
Per Share $(0.64) $(0.44) $(0.20)
NOTE: This schedule shows the effect of second quarter 1998 charges
and adjustments as they are applied to various accounts and the
effects of two closed international subsidiaries.
MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
As of December 31, 1998 and 1997
(in thousands, unaudited)
December 31, December 31,
1998 1997
ASSETS
Cash & cash equivalents $19,092 $1,645
Receivables, net 43,687 42,944
Inventories, net 48,543 40,169
Other assets 20,430 20,052
Total assets $131,752 $104,810
LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities
Bank lines of credit $ 2,032 $2,084
Accounts payable 79,659 44,067
Other liabilities 12,308 13,060
Total liabilities $93,999 $59,211
Minority interest 498 628
Total shareholders' equity 37,255 44,971
Total liabilities &
shareholders' equity $131,752 $104,810
good numbers compared to other nets; depends now on what guidance they give during cc at 1pm eastern |
