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EXHIBIT 99.1
PRESS RELEASE
NEWS BULLETIN RE: VDI MULTIMEDIA
FROM: 7083 HOLLYWOOD BLVD. SUITE 200
HOLLYWOOD, CA 90028
[LOGO] NASDAQ: VDIM
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FOR FURTHER INFORMATION:
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AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
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Clark Brewer Tim Kent Carl Dameron Lisa Mueller
Chief Financial Officer General Information Media Contact Investor Information
(323) 860-6204 (310) 442-0599 (310) 442-0599 (310) 442-0599
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FOR IMMEDIATE RELEASE
JULY 19, 2000
VDI MULTIMEDIA LEVERAGED BUYOUT OFFER REJECTED
PRESIDENT RESIGNS; NEW BOARD SLATE PROPOSED
TO SHAREHOLDERS FOR AUGUST 15 ELECTION
HOLLYWOOD, CA, JULY 19, 2000 - VDI MultiMedia (NASDAQ: VDIM) today announced
changes in the Board of Directors (pending approval of shareholders at their
meeting August 15, 2000) and management.
Chairman and Chief Executive Luke Stefanko said the company is refocusing its
efforts on capturing what he called "excellent opportunities to produce greater
shareholder value." Stefanko and individuals related to him own approximately
57% of VDI's outstanding common stock. "VDI has paid a high price in both
expense dollars and management mindshare to consider offers made to purchase the
company, including a leveraged buyout (LBO) offer recently presented by VDI
President Donald R. Stine. Today we are putting all of these matters behind us
and are directing 100% of our attention to building company value."
Specifically, Stefanko rejected Don Stine's LBO offer as "insufficient" and
Stine is resigning from management and will not stand for re-election at a
shareholders meeting scheduled for August 15, 2000. Terms of the LBO offer were
not disclosed. Others announcing their resignations today were Senior Vice
President for Operations Robert C. Semmer, Vice President of Sales and Marketing
Thomas J. Ennis and Vice President of Business Development Brian A. Grant. Ennis
is a board member and said he would not stand for re-election. At Stefanko's
request, directors Fred Teng and Robert Feuerman also said they would not stand
for re-election.
Neither CEO Stefanko nor CFO Clarke Brewer nor any of the other 15 most senior
managers are resigning, including the CIO, CTO and Senior Vice President for
HDTV and all nine facility general managers.
- MORE -
The Financial Relations Board, Inc. serves as financial relations counsel to
this company and is acting on the company's behalf in issuing this bulletin and
receiving compensation therefor. The information contained herein is furnished
for information purposes only and is not to be construed as an offer to buy or
sell securities.
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VDI MULTIMEDIA, INC
ADD 1
VALUE ISSUES
Stefanko said, "The stock market is presently valuing VDI at a fraction of the
recent acquisition prices of the other good companies in our space, despite
VDI's performance and broad opportunities for the future. We suspect that a big
part of this discount in our market capitalization has been uncertainty over
whether we would be sold too cheaply and, particularly, whether or not a
possible leveraged buy-out would be in the shareholders' best interest. I am
here to clearly and definitively tell you that all offers are off the table and
we are 100% focused on continuing to build this powerful earnings machine
through both internal growth and acquisitions."
Clarke Brewer, CFO, added, "VDI is in excellent financial condition and is well
positioned to pursue growth in the high resolution marketplace. Our operations
continue to be profitable, and our internally generated cash flow remains
strong. Additionally, we do not expect that future results will be burdened by
the extraordinary expenses related to the proposed sale of the company which
have penalized recent quarters. The operating-level managers who have produced
this past success remain a key part of our future growth plans."
$8 BILLION MARKET
VDI believes that the post production market that it operates in is an $8
billion worldwide market and a $4 billion domestic market, with VDI's current
domestic "target" market being $1.6 billion. The industry is highly fragmented
and comprised of numerous small companies with regional customer bases, which
gives VDI numerous acquisition targets. The company also believes new
technologies (e.g., digital television and cinema), and new media outlets (e.g.,
the internet) will expand the market for the company's services and will provide
greater growth in the future.
According to the company, its financial strength and geographical positioning
give it an advantage over many of its competitors. Its ability to provide
"one-stop" shopping to its customers and to invest in new technologies as they
become pervasive add to its competitive advantage over smaller, or similarly
sized, companies in the industry. VDI also has a proven track record of
successfully completing and integrating acquisitions, which provide it an
opportunity to improve margins and enhance its nationwide presence and service
offerings.
NEW KEY STAFF
VDI reported that it has hired two key executives, and four key operational
employees, including one of the top colorists in the industry, to lead the
implementation and management of VDI's digital television ("DTV") and high
definition services department. VDI completed the installation of Philips
Electronics' Spirit film to tape transfer equipment in June and now has the
capability to transfer filmed content to all high definition television ("HDTV")
broadcast formats. VDI believes the newly designed DTV department will create
new business growth as well as growth in its core service offerings, which will
benefit from downstream work generated from high definition transfers.
-MORE-
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VDI MULTIMEDIA, INC.
ADD 2
Stefanko said that VDI plans to continue to expand both its digital television
and encoding departments over the next six months, and also plans to have its
E-commerce solutions for customers, such as online order entry and library
tracking, available by 2001.
VDI MultiMedia is one of the largest providers of video and film asset
management services to owners, producers and distributors of entertainment and
advertising content. VDI provides the services necessary to edit, master,
reformat, archive and ultimately distribute its clients' film and video content,
including television programming, spot advertising, feature films and movie
trailers.
The company delivers commercials, movie trailers, electronic press kits,
infomercials and syndicated programming, by both physical and electronic means,
to hundreds of broadcast outlets worldwide. The company provides worldwide
electronic distribution, using fiber optics, satellites, and the Internet.
VDI's interconnected facilities in Los Angeles, New York, Chicago, Dallas and
San Francisco provide service coverage in each of the major U.S. media centers.
Clients include major motion picture studios such as Universal, Disney, Fox,
Sony Pictures, Paramount, MGM, and Warner Bros. and advertising agencies TBWA
Chiat/Day, Saatchi & Saatchi and Young & Rubicam.
Certain statements in this news release contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements include, without limitation: (i) statements concerning the company's
projected revenues, earnings, cash flow and EBITDA; (ii) statements of the
company's management relating to the planned focus on internal growth and the
consolidation of acquisitions; (iii) statements concerning reduction of
facilities and actions to streamline operations; (iv) statements being taken to
reduce costs and improve customer service; and (v) statements regarding new
business and new acquisitions. Such statements are inherently subject to known
and unknown risks, uncertainties and other factors that may cause actual
results, performance or achievements of the company to be materially different
from those expected or anticipated in the forward-looking statements. In
addition to the factors described in the company's SEC filings, including its
quarterly reports on Form 10-Q and its annual reports on Form 10-K, the
following factors, among others, could cause actual results to differ materially
from those expressed herein: (a) lower-than-expected net sales, operating income
and earnings; (b) less-than-expected growth, even following the refocus of the
company on sales and streamlined operations; (c) actions of competitors
including business combinations, technological breakthroughs, new product
offerings, and marketing and promotional successes; (d) the risk that
anticipated new business may not occur or be delayed; and (e) general economic
conditions that adversely impact the company's customers' willingness or ability
to purchase or pay for services from the company. The company has no
responsibility to update forward-looking statements contained herein to reflect
events or circumstances occurring after the date of this release.
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