SDTI very cheap right now. Also HMK is out with their numbers, splits today 3 for 2.
Thursday February 18, 8:25 am Eastern Time
Company Press Release
SOURCE: HA-LO Industries, Inc.
HA-LO Industries Reports Record Fourth Quarter/Year End Results;
Quarterly Net Income Up 39%; Annual Net Income Up 65%
Fourth Quarter Results of $0.36 Per Share Before Non-Recurring Charge of $0.06 Due to Acquisition Costs
NILES, Ill., Feb. 18 /PRNewswire/ -- HA-LO Industries, Inc. (NYSE: HMK - news), the nation's leading distributor of promotional and premium advertising
products, today reported record sales and earnings for the fourth quarter and year ended December 31, 1998.
Summary of Financial Highlights
(unaudited, $ in thousands, except per share amounts)
Fourth Quarter Ended Dec. 31, Year Ended Dec. 31,
1998 1997 Chg. 1998 1997 Chg.
Net sales $175,948 $150,274 17% $589,669 $465,721 27%
Net Income $9,773 $7,017 39% $24,520 $14,846 65%
EPS diluted $.30 $.25 20% $.79 $.54 46%
EPS diluted/
Recurring basis $.36 $.28 29% $.99 $.63 57%
Weighted avg.
shares outstand. 32,668 27,825 30,964 27,408
Key Recent Developments
In December, HA-LO announced the acquisitions of Premier Promotions & Marketing, a premium company located in Los Angeles; Smith Advertising Specialties, a
promotional products company near Harrisburg, Pa.; Siebel Marketing Group, a New York City based promotion marketing agency; Idea Man, Inc., a Los Angeles
promotional products company, Parsons International, a premium company, headquartered in Paris, France and Incentive Merchandising Corporation, a promotional
products company located in Cleveland, Ohio. In January, HA-LO acquired Grotte Advertising Company, a promotional products company located in Houston.
Fourth Quarter 1998
Fourth quarter net income rose 39 percent to $9.8 million or 30 cents per diluted share (36 cents per diluted share on a recurring basis) from $7.0 million or 25 cents
per diluted share (28 cents per diluted share on a recurring basis) for the same period last year. Sales for the fourth quarter of 1998 rose 17 percent to $175.9 million
from $150.3 million for the same period of the previous year. Fourth quarter results include pretax non- recurring charges of $3.2 million (6 cents per diluted share)
and $1.2 million (3 cents per diluted share) in 1998 and 1997, respectively, related to acquisitions completed and accounted for as pooling-of-interests.
Year Ended 1998
Net income for the year ended 1998 climbed 65 percent to $24.5 million or 79 cents per diluted share (99 cents per diluted share on a recurring basis) from $14.8
million or 54 cents per share (63 cents per diluted share on a recurring basis) for 1997. Sales for the year ended 1998 increased 27 percent to $589.7 million from
$465.7 million for the previous year. Earnings for 1998 and 1997 include pretax non-recurring charges of $10.3 million (20 cents per diluted share) and $3.8 million
(9 cents per diluted share), respectively, related primarily to acquisitions completed and accounted for as the pooling- of-interests.
CEO Lou Weisbach Comments on Results
Lou Weisbach, president and chief executive officer, noted ''HA-LO's fourth quarter and year end results continue our pattern of record growth. Overall, 1998 was
a year of solid accomplishment for HA-LO. Despite some disappointment in our telemarketing division, our recurring pretax earnings increased 79% to $51.2 million
from $28.6 million in 1997. Excluding telemarketing, internal revenue growth was 25% for the year.''
''The acquisitions of UPSHOT and LAGA, both leaders in their marketing disciplines, establish HA-LO as a unique brand marketing organization well positioned to
help major companies build their brands. Parsons International is a valuable addition to our European operations. Its product design and sourcing capabilities bring an
added dimension to our core promotional products business. We have built an infrastructure in Europe that positions us for continued growth and gives us a
competitive advantage as our multi- national clients seek creative marketing solutions to enhance their brands around the world. In addition, our domestic acquisitions
have given HA-LO a presence in new marketplaces in major cities such as Houston, Phoenix, Salt Lake, San Diego and Seattle,'' Mr. Weisbach added.
About the Company
HA-LO Industries is the nation's leading distributor of promotional and premium products and has established integrated brand marketing services including
promotion marketing (UPSHOT), brand identity and packaging (LAGA), corporate event planning, sports marketing, communication and design, and teleservices.
HA-LO's extensive client roster of over 20,000 companies includes Abbott Labs, Ameritech, Ford, General Electric, General Mills, Glaxo Wellcome, IBM and
Siemens.
Forward Looking Statements
Statements in this press release regarding HA-LO's anticipated sales and profitability growth in 1999, HA-LO's building of its relationships with its customers,
strengthened channels of distribution and HA-LO's ability to assist customers in building their brand are forward-looking statements that involve substantial risks and
uncertainties. Actual results may differ materially from those implied by such forward-looking statements as a result of various factors, including without limitation the
following: There can be no assurance that suitable acquisition candidates will be available on favorable terms or that HA-LO can successfully integrate acquired
businesses into its existing operations or realize the intended benefits of such acquisitions or realize benefits from joint marketing opportunities. HA-LO's common
stock has been subject to wide price fluctuations in response to a variety of factors, some of which have been unrelated to HA-LO's operating performance. Readers
are encouraged to review HA-LO's Annual Report on Form 10-K and quarterly reports on Form 10-Q for the first, second and third quarters of 1998 for other
important factors that may cause actual results to differ materially from those implied in these forward-looking statements.
HA-LO INDUSTRIES, INC.
Financial Highlights
(in 000s, except per share amounts)
For the Three Months For the Year
Ended Ended
12/31/98 12/31/97(a)12/31/98 12/31/97(a)
(unaudited)
Net sales $175,948 $150,274 $589,669 $465,721
Cost of sales 114,149 98,888 382,504 313,756
Gross profit 61,799 51,386 207,165 151,965
Selling expenses 22,479 19,088 76,639 57,354
General & administrative expenses 20,963 18,583 80,949 63,819
Non-recurring charges(b) 3,201 1,191 10,337 3,845
Income from operations 15,156 12,524 39,240 26,947
Interest income (expense), net 1,140 (829) 1,633 (2,199)
Pretax income 16,296 11,695 40,873 24,748
Provision for income taxes(c) 6,523 4,678 16,353 9,902
Net income(c) 9,773 7,017 24,520 14,846
Earnings per share:
Basic $0.31 $0.26 $0.82 $0.56
Diluted $0.30 $0.25 $0.79 $0.54
Weighted average shares outstanding:
Basic 31,706 26,733 29,823 26,419
Diluted 32,668 27,825 30,964 27,408
(a) Restated to include acquisitions completed and accounted for using
the pooling-of-interests accounting method.
(b) Relates primarily to expenses incurred to complete acquisitions
accounted for using the pooling-of-interests method. On a diluted
basis, amounts to: six cents per share for the fourth quarter of
1998, three cents per share for the fourth quarter of 1997, twenty
cents per share for year ended December 31, 1998 and nine cents per
share for the year ended December 31, 1997.
(c) Includes a pro-forma tax provision of 40% for acquisitions which had
elected to be treated as S-Corporations for federal income taxes
prior to its acquisition by the Company.
SOURCE: HA-LO Industries, Inc. |
