PNEC Quarterly Results
MIDDLETOWN, NJ, January 15, 1999- Planet Entertainment Corp. (OTC BB: PNEC), announced today results for its first quarter of fiscal 1999 ending November 30, 1998. Revenues for the consolidated Company's first quarter of fiscal 1999 were $14,982,356 compared to revenues of Planet Entertainment unconsolidated of $202,156 in the first quarter of fiscal 1998. The increase in total revenues is primarily due to the acquisition of the Company's subsidiary, Northeast One Stop, Inc. (NEOS), a wholesale distributor of recorded music, video and DVD product, in September 1998, which contributed more than $14 million in revenues to the consolidated Company's first quarter of fiscal 1999. In fiscal 1998, NEOS had total revenue of approximately $34.7 million. Net income for the consolidated Company's first quarter of fiscal 1999 was $469,084, or $0.04 per share, compared to a net loss of $51,516, or ($0.01) per share, for Planet Entertainment unconsolidated in the first quarter of fiscal 1998. One-time non-recurring fees and charges associated with Planet Entertainment's acquisition of NEOS amounted to approximately $100,000 for this reported quarter. "Our first quarter results reflect the significance that the acquisition of Northeast One Stop had on the evolution of our Company," said John S. Arnone, President and CEO of Planet Entertainment. "We achieved our goals of streamlining the Company's operating structure, containing costs and achieving profitability. In fact, this quarter represented the best sales performance in NEOS' 16 year history. Even more exciting, these positive first quarter sales results do not include December holiday sales, which are recorded in our second quarter and appear to be stronger than any December in the history of NEOS. Additionally, we expect future results to also reflect North American sales of our proprietary compilation albums now being distributed overseas, as well as our vast and rapidly growing Internet fulfillment and delivery business." Management noted that the Company would no longer be servicing the Meijers account. Although the Meijers account contributed $13,400,000 in revenue in 1998, the Company realized only $28,000 in net income from the account. Mr. Arnone continued, "The termination of this relationship will allow the Company to devote the substantial capital and personnel formerly devoted to servicing this account and concentrate on more profitable areas of the business, including its expanding one-stop/rack business and its new website marketing efforts." Management also stated that J. Crew, the top rated Internet clothing website, has approved the Company as an affiliate-selling member. This alliance further expands Planet's business plan to strategically align itself with direct links to and from highly trafficked web pages and follows the Company's recently announced association with Amazon.com. Wallace M. Giakas, Chairman of Planet Entertainment said, "As the industry continues to consolidate, we believe the Company is well positioned to capitalize on many opportunities. With the benefit of owning a prime wholesaler, Planet's E-commerce site will be more price competitive while maintaining profitability compared to other E-commerce sites that do not own a wholesale and distribution facility and are required to outsource their product orders. This will enable NEOS customers to have access to one of the largest inventories of music, video and DVD products available. Since the Company is one of a few E-commerce sites with a proprietary music catalog, it can also uniquely offer custom private label music tailored to meet customer demand. In addition, the Company's recording studios are now in the process of digitizing its vast library of music masters for digital delivery via the Internet." Planet Entertainment is a diversified entertainment company specializing in music production, wholesale distribution and marketing of front-line recorded music, video and DVD titles as well as its proprietary CD compilation albums. The Company, which operates a wholesale distribution facility, two wholly owned recording studios and four record labels is also engaged in the acquisition, enhancement, licensing and re-release of music from their extensive library of over 15,000 original musical master recordings as well as the production of new artist albums. In order to enhance distribution, the Company recently acquired Northeast One Stop, Inc. (NEOS), a privately held wholesale distribution facility of recorded music, video and DVD products based in Latham, NY. NEOS has access to over 130,000 front-line titles and last year was named Medium Wholesaler of the Year by the National Association of Record Manufacturers (NARM). The Company plans to operate NEOS for centralized order fulfillment as well as to market and sell its compilation CDs either directly to retailers or indirectly over the Internet on its business to business website, www.planetentertainment.com, which has recently become affiliated with Amazon.com (Nasdaq: AMZN) and J. Crew as an Associate. 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 include but are not limited to: the Company's vulnerability to rapid 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 to perform on existing and future agreements, the availability of fi! nancing, and other risks all, or any of which may have a materially adverse impact on the company, its business, business prospects, and financial condition.
Contacts:
Planet Entertainment Corp. THE MWW GROUP
Wallace Giakas, Chairman Public Relations - Tel. (201) 507-9500
732-530-8819 Robert Ferris -- rferris@mww.com |
