Zomax Optical Media, Inc. Announces 200+% Increases in First Quarter 1999 Sales and Earnings
MINNEAPOLIS, April 19 /PRNewswire/ -- Zomax Optical Media, Inc. (Nasdaq: ZOMX - news) today reported sales and earnings for its first quarter ended March 26, 1999. Sales for the first quarter increased 239% to $48.2 million from $14.2 million for the same period last year. Net income for the first quarter of 1999, excluding the Company's share of the net loss of Chumbo Holdings Corporation of $406,000 (see below), was $2.4 million ($.30 per diluted share), versus $748,000 ($.13 per diluted share) for the first quarter of 1998. This represents a 217% increase in net income on 40% more shares outstanding. Net income for the first quarter of 1999 was $2.0 million ($.25 per diluted share) including the Company's share of the Chumbo loss. The Company purchased a one third interest in Chumbo, an internet based software reseller, in October 1998.
The first quarter 1999 financial results include the January 7, 1999 acquisition of certain businesses and assets of Kao Corporation located in the United States, Canada, Ireland and Germany. The purchase price of the businesses and net assets acquired was approximately $37.5 million. The acquisition is accounted for using the purchase method of accounting and accordingly, the purchase price was allocated to net assets acquired based on their estimated fair values.
James T. Anderson, President and CEO, stated, ''We are very excited about our strong first quarter results. The Kao acquisition, completed on January 7, 1999, contributed significantly to the increases in both sales and earnings. These first quarter results exceeded our expectations. Gross margin was higher than expected and SG&A expenses were lower than expected, both reflecting our focus on tight financial controls. Looking forward, we hope to improve upon these first quarter operating results.
''Our focus in the first quarter was to ensure uninterrupted service to our customers while working on the integration of the acquired businesses. We have maintained our service and quality levels as we proceed with our integration activities. The hard work and effort of our new and existing employees has made the progress to date possible.''
Anderson added, ''We are also pleased to announce our Minneapolis facility became ISO 9002 Certified in the first quarter. This achievement was made in record time reflecting the quality systems that had already been in place. Meeting the ever growing demand to deliver the highest quality levels to our customers is vital to the future success of our company. With this achievement, all of our CD and DVD replication facilities are now ISO certified.''
Zomax Optical Media, Inc. is a leading outsource service provider to software publishers, computer manufacturers and other producers of multimedia products. These services include call center and customer support solutions; E-commerce solutions; CD and DVD mastering; CD, DVD diskette and cassette replication; graphic design; print management; assembly; packaging; warehousing; inventory management; distribution and fulfillment; and RMA processing. The Company's Common Stock is traded on the Nasdaq National Market under the symbol ''ZOMX.''
Statements contained in this press release regarding the Company's efforts to continue to increase sales and earnings, maintain customer quality and successfully integrate the acquired businesses are forward-looking, based on current expectations. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. There are certain important factors that could cause results to differ materially from those anticipated, including: strategies of competitors, market demand, general economic factors, such as consumer confidence and inflation, increased costs and lower gross margin, and the Company's ability to successfully assimilate its newly acquired software replication business. Investors are cautioned that all forward-looking statements involve risk and uncertainty. |
