MSGI Reports Record Revenues in Third Quarter
May 17, 1999 04:34 PM
NEW YORK--(BUSINESS WIRE)--May 17, 1999--Marketing Services Group, Inc. MSGI , an integrated marketing and Internet services industry leader, today reported third fiscal quarter results for the period ended March 31, 1999.
Revenue for the third quarter increased 51% to $22,563,283, versus $14,968,585 reported for the third quarter one year ago, representing the 10th consecutive quarter of double-digit revenue growth.
Net loss for the third quarter was ($1,756,467) or ($0.14) per share, excluding ($0.08) per share related to GE Capital dividends. This compares to ($149,690) or ($0.01) per share in the third quarter of 1998, excluding the dividends. MSGI converted GE Capital's preferred shares to common shares in the fourth quarter of 1999, thus eliminating preferred dividends for the new fiscal year. Including the preferred dividends, net loss for the third quarter was ($2,799,214) or ($0.22).
Direct and Internet marketing business continue to provide positive income from operations. The net loss was principally attributable to fulfillment operations, which have since been divested, increased amortization costs associated with recent acquisitions and telemarketing activities, which continue to suffer from greater than usual seasonal losses.
"We saw particular strength in our Internet Group, with 45% top line growth, primarily resulting from new business development and excluding recent acquisitions," said Jeremy Barbera, Chairman and CEO of MSGI. "We continue to maintain that our strategy of focusing solely on the areas of direct and Internet marketing is the correct decision. We have taken many exciting and material steps toward executing our new strategic initiatives, which has clearly resulted in an improvement in the value of MSGI for all shareholders."
Third Quarter Highlights
-- January 1999: MSGI completed the acquisition of Steven- Knox &
Associates (SK&A), widely considered to be the first list
management firm in the country. SK&A propelled MSGI to a run rate
of more than $100 million and also provided MSGI with their first
international operations in the Covent Garden section of London,
as well as expansion into several new markets.
-- February 1999: MSGI signed Broadway giant Cameron Mackintosh (Les
Miserables, The Phantom of the Opera, Miss Saigon) to a contract
for extended Web development, hosting and e-mail list management
with possible future plans for online ticketing. This new
contract firmly reinforced MSGI's role as the leading online
provider for the arts and entertainment industry.
-- February 1999: MSGI announced their intent to divest the majority
interest in Metro Fulfillment. MSGI entered into negotiations
with a strategic partner, and 85% of the fulfillment business was
sold, effective March 1, 1999.
-- March 1999: MSGI signed a definitive agreement with CMGI to
acquire CMG Direct in an exchange of stock and cash. As a result
of the agreement, MSGI also acquired their latest Internet
incubation; Permission Plus(TM), and CMGI became a material
minority stockholder in MSGI. This transaction successfully
closed on May 13, 1999.
-- March 1999: Ed Mullen, a CMG executive, was named to the position
of President of MSGI, effective May 14th, 1999.
-- March 1999: MSGI applied to Nasdaq for listing on the National
Market.
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