SJI Group Reports Significant Reduction in Debt
Company Also Provides Update on its Various Programs With Inktomi, MBNA America Bank, WebBound Magazine
KNOXVILLE, Tenn.--(BUSINESS WIRE)--March 4, 1999--SJI Group, Inc. (OTC BB:SJIG) today reported that as of March 1, 1999, the Company has significantly reduced its total debt.
The Company's wholly owned subsidiary, SJI Wholesale, last month reduced short-term bank debt from just over $1,000,000 dollars to less than $117,000 and long term bank debt to less than $390,000. As such, its SJI Wholesale subsidiary has successfully reduced its total bank debt by over 50%, resulting in total assets of SJI Wholesale now exceeding liabilities by a margin of 3:1.
SJI Group also reported that it is currently working on the development and release of a new Internet Mall, 247mall.com, that is expected to encompass some exciting features as well as a large tenant base and extensive affiliate programs. SJI Tobacco, sjitobacco.com, will be a featured tenant in the new mall.
Similarly, the Company reported that it is also working to develop a new Internet auction web site, cuttheprice.com, in a joint venture with the national Internet magazine WEBBOUND webbound.com. The project will be under the direction of Art MacCammon who will serve as President of the company. Mr. MacCammon is also publisher of the WEBBOUND magazine and has extensive background in marketing direct to the consumer. He joined the Home Shopping Network in 1986 just as this industry was emerging. Mr. MacCammon was involved in the show production, product purchasing and scheduling for the successful television retailer. He dealt hands-on with over $5,000,000,000 in sales during his eight-year with Home Shopping Network. SJI believes that his contacts in the jewelry industry and other product categories coupled with his knowledge of consumer buying habits will be a major asset in this venture. Planned release date for the site is June 25th.
SJI also noted that its alliance with Inktomi (Nasdaq:INKT - news), which promotes the Company's cigar Web site, sjitobacco.com, has proven to be a success, with the increased traffic and sales currently being experienced. To further expand sales Its SJI Wholesale subsidiary also reported that it has recently increased its outside sales force by adding nine highly experienced sales representatives to call on retail tobacconists across the U.S. These representatives are strategically positioned in regions where SJI did not formally have representation.
SJI Wholesale is also working to expand its Modular Cigar Humidor Program and has recently sent out over 8,000 direct mail pieces detailing the program. To the best of the Company's knowledge, SJI Wholesale is the only company in the world offering a Modular Walk-in Cigar Humidor.
This direct mail program has been targeted to discount tobacco outlets across the U.S. The discount tobacco outlets represent the fastest growing segment in the tobacco industry. In addition, most of this class of trade is new and does not presently have walk-in humidors. This special program provides merchants with a Modular humidor, complete with cigar inventory. In addition, the company is close to finalizing a very attractive 30 months 0% interest payment program. Based upon a recent survey, the average modular humidor should generate in excess of $6,000.00 in retail sales, per month for the owner/operator of the humidor. SJI suggests the retailer operate on a 35% margin which would translates into $3,900.00 in repeat monthly wholesale purchases from SJI Wholesale. Management is excited about this new program and is confident the direct mail program will generate additional sales and bring repeat business to SJI Wholesale.
SJI Wholesale also reports the response for the co-branded SJI Cigars - VISA card with MBNA America Bank (NYSE:KRB - news) has exceeded its expectations. According to Steve Simpson, Assistant Vice President of MBNA America Bank, ''The results have far exceeded expectation and continued growth of the program is expected.'' The new VISA card carries the SJI logo and my be used anywhere VISA is accepted. In addition to competitive pricing, consumers receive free, a stocked humidor for activating their card. Applications may be submitted via the Internet at sjitobacco.com, by telephone direct to MBNA America Bank, or traditional forms. In addition to earning a commission on all purchases, regardless of where the card is used, management believes that customer loyalty to SJI will be enhanced and that increased sales will follow.
Finally, SJI Group noted that it remains very pleased with the passive investment it holds in iSleuth.com (OTC BB:SLEU), as the company continues to report strong web site traffic growth and the addition of new site services and features. SJI Group acquired the iSleuth.com restricted stock in August 1998 when SJI Group sold its Maverick Communications subsidiary. Without a discount to market, the restricted common shares owned by SJI Group was valued in excess of $8,000,000, based on the current bid price as of March 1, 1999. SJI Group also holds 1,000,000 shares of preferred stock in iSleuth.com.
SJI Group, Inc. is a sales and marketing organization that specializes in the distribution of merchandise via the Internet and offers Internet site development and design. The Company markets premium cigars and a wide variety of accessories to retailers and wholesalers nationwide, offering a broad selection of cigar brands. For more information regarding SJI Group, Inc., its products and services, please visit the Company's corporate web site at sjigroup.com; its SJI Tobacco (Smokin' Joe's) web site located at sjitobacco.com.
Statements about the Company's future expectations, including future revenues and earnings, and all other statements in the press release other than historical facts are ''forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. Since these statements involve risks and uncertainties and are subject to change at any time, the Company's actual results could differ materially from expected results.
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Contact:
SJI Group, Inc., Knoxville
J.D. Jenkins, 423/584-3398, extension 3103
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