Are you actually suggesting that MSGI's 51% increase in revenue was primarily attributable to MSGI's having Stevens-Knox on board for 2 months?
Yes I am...
Austin, the 10-K is avaiable on www.freeedgar.com if you wish to review it.
FWIW,
Results of Operations for the Three Months Ended March 31, 1999, Compared to the
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Three Months Ended March 31, 1998.----------------------------------
Revenues of $22,563,283 in the three months ended March 31, 1999 (the "current
period") increased by $7,594,698 over revenues of $14,968,585 in the three
months ended March 31, 1998 (the "prior period"). Of the increase, $7,729,944 is
attributable to an increase in direct and internet marketing resulting mainly
from the acquisition of SK&A. The remaining decrease is primarily due to a
decrease in telemarketing and telefundraising revenues of $439,741 offset by
fulfillment revenue for the current period of $304,495.
Direct costs of $15,406,554 in the current period increased by $6,304,808 over
direct costs of $9,101,746 in the prior period. Of the increase, $6,146,695 is
attributable to direct and internet marketing services primarily due to the
acquisition of SK&A. The remaining increase is primarily due to fulfillment
direct costs of $150,205. The Company's direct costs consist principally of
commissions paid to use marketing lists.
Salaries and benefits of $6,510,024 in the current period increased by
$1,947,992 over salaries and benefits of $4,562,032 in the prior period. Of the
increase, $1,436,105 is due to an increase in head count for internet and direct
marketing services as well as the inclusion of SK&A. Salaries and benefits
relating to fulfillment were $451,195. Salaries and benefits associated with
corporate overhead increased $13,422 in the current period principally due to an
increase in head count to manage current and anticipated future growth.
Telemarketing and telefundraising salaries and benefits increased $47,270.
General and administrative expenses of $1,844,411 in the current period
increased by $783,615 over comparable expenses of $1,060,796 in the prior
period. Direct and internet marketing services general and administrative
expenses increased $629,341 principally due to the inclusion of SK&A. The
remaining increase is primarily due to an increase in corporate and
telemarketing and telefundraising expenses of $123,766 as well as fulfillment
expenses of $30,508.
Depreciation and amortization expense of $498,754 in the current period
increased by $99,811 over expense of $398,943 in the prior period. Of the
increase, $66,759 is attributable to the inclusion of SK&A. The remaining
increase is primarily due to fixed asset depreciation and amortization from MFI.
Loss from operations of $1,696,460 in the current period increased by $1,541,528
over the prior period. Fulfillment services accounted for $414,747 of the loss.
Telemarketing and telefundraising incurred a loss from operations of $572,082,
which is consistent with the seasonality of the business. In addition, corporate
overhead contributed $742,612 to the loss from operations which consists mainly
of amortization and administration expenses. Direct and internet marketing
services provided income from operations of $32,981.
Net interest expense of $99,407 in the current period decreased by $112,247 over
income of $12,840 in the prior period. Such expenses increased principally due
to accrued interest on an outstanding earnout payment. In addition, interest
income from cash invested decreased due to cash used for stock buyback and to
fund fulfillment operations.
The net provision for income taxes of $1,410 in the current period decreased by
$6,188 over the provision of $7,598 in the prior period. The Company records
provisions for state and local taxes incurred on taxable income at the operating
subsidiary level which cannot be offset by losses incurred at the parent company
level or other operating subsidiaries. |
