<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
OCTOBER 14, 1999
MARKETING SPECIALISTS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-24667 04-341183
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation or
organization)
17855 N. DALLAS PARKWAY, SUITE 200
DALLAS, TEXAS 75287
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code:
(972) 349-6200
----------------------
Merkert American Corporation
490 Turnpike Street
Canton, Massachusetts 02021
(Former name and address)
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ITEM 5. OTHER EVENTS
On October 14, 1999, the Registrant announced (a) the appointment of
Timothy M. Byrd as chief financial officer, (b) the acquisition of Paul Inman
Associates, Inc. and (c) the resignation of James L. Monroe from the board of
directors. A copy of this press release is filed as Exhibit 99.1 hereto.
On October 14, 1999, the Registrant also announced that it was revising
its year 2000 earnings estimates. A copy of this press release is filed as
Exhibit 99.2 hereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) EXHIBITS
The following Exhibits are filed herewith:
99.1 Press Release issued by the Registrant on October 14, 1999
regarding appointment of new CFO, acquisition of Paul
Inman Associates, and director resignation.
99.2 Press Release issued by the Registrant on October 14, 1999
regarding revised earnings estimates.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARKETING SPECIALISTS CORPORATION
By: /s/ Gerald R. Leonard
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Gerald R. Leonard
President and Chief Executive
Officer
Date: October 14, 1999
3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
99.1 Press Release issued by the Registrant on October 14, 1999 regarding
appointment of new CFO, acquisition of Paul Inman Associates, and
director resignation.
99.2 Press Release issued by the Registrant on October 14, 1999 regarding
revised earnings estimates.
</TABLE>
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EXHIBIT 99.1
Marketing Specialists Corporation
490 Turnpike Street
Canton, MA 02021
(Nasdaq/NMS:MKSP)
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
Gerald Leonard, CEO Analyst Info: Michelle Cicoria
Tim Byrd, CFO General Info: Paula Schwartz
(781)828-4800 Media Info: Judith Sylk Siegel
(212)661-8030
FOR IMMEDIATE RELEASE
October 13, 1999
MARKETING SPECIALISTS CORPORATION
APPOINTS NEW CHIEF FINANCIAL OFFICER
NATION'S ONLY NATIONAL AND PUBLICLY HELD FOOD BROKERAGE
ACQUIRES PAUL INMAN ASSOCIATES, INC.
JAMES L. MONROE RESIGNS FROM BOARD OF DIRECTORS
CANTON, MA...OCTOBER 13, 1999 - Marketing Specialists Corporation
(Nasdaq/NMS:MKSP) today announced that Timothy M. Byrd, 44, has joined the
company as chief financial officer. In his new position, Mr. Byrd replaces
Joseph T. Casey, 44, who left the company to pursue personal interests. In his
new position, Mr. Byrd will be responsible for all finance, accounting,
financial reporting and financial planning functions. Mr. Byrd will be
headquartered at the company's Dallas office.
Mr. Byrd's appointment follows the recent merger of Richmont Marketing
Specialists Inc., based in Dallas, and Merkert American Corporation, based in
Canton, Mass. The merged company, renamed Marketing Specialists Corporation, is
the only national and publicly held sales and marketing company in the United
States, with some 7,000 associates located in approximately 65 offices situated
throughout the country. While maintaining dual headquarters in Dallas and
Canton, Marketing Specialists Corporation is consolidating its financial
reporting and information systems functions in Dallas.
Mr. Byrd also serves as director of Marketing Specialists Corporation and chief
financial officer of Mary Kay Holding Corp., the parent corporation of Mary Kay
Inc., one of the world's largest direct selling companies. Previously, he
served as chief financial officer of Richmont Marketing Specialists Inc. prior
to its merger with Merkert American Corporation. In addition, Mr. Byrd is a
partner and officer of Richmont Capital Partners I, L.P., which, through its
ownership of other investment entities, is the largest shareholder of Marketing
Specialists Corporation.
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Marketing Specialists Corporation
Announces New Chief Financial Officer
Page 2
Commenting on Mr. Byrd's appointment, Gerald Leonard, chief executive officer
of Marketing Specialists Corporation, said, "Tim's financial expertise and his
thorough knowledge of our company and the packaged goods industry will be
important assets as the new Marketing Specialists moves forward. Additionally,
his proven leadership skills will be invaluable as we continue to expand the
sales and marketing services we provide to manufacturers and retailers
throughout the United States."
INMAN ACQUISITION
Marketing Specialists Corporation also announced today that it has completed
its previously announce acquisition of Paul Inman Associates, Inc., a
full-service food brokerage firm with operations throughout Michigan, Indiana,
Illinois and Ohio. Based in Detroit, and with branch operations in Grand
Rapids, Indianapolis, Fort Wayne, Cincinnati, Toledo, Cleveland and Columbus,
Inman's 1998 revenues topped $21 million. The value of the transaction is
estimated at $12.2 million, of which $9.8 million was in cash.
Announcing the successful transaction, Leonard stated, "The acquisition of Paul
Inman Associates further strengthens our critical mass by expanding our
geographic retail coverage in the important East Central region. Inman is the
preeminent food broker in the region, and their strong business relationship
with Kroger will significantly strengthen Marketing Specialists' ability to win
assignments with manufacturers seeking to do business with one of the nation's
largest retailers.
"In addition, this acquisition makes strong financial sense because it will
significantly enhance our performance in a region that previously was
considered 'break even.' Upon completion of the integration, this transaction
is expected to contribute an additional $2.5 million of EBITDA (earnings before
interest, taxes, depreciation and amortization."
MONROE RESIGNATION
Marketing Specialists Corporation also announced today that James L. Monroe,
40, manager, Monroe & Company, LLC, has resigned from its board of directors.
Monroe & Company, LLC has pending litigation against Marketing Specialist's
Corporation, a lawsuit which Marketing Specialists intends to vigorously defend.
Marketing Specialists Corporation (f/k/a Merkert American Corporation) provides
outsourced sales, marketing and merchandising services to manufacturers of food
and other consumer products. Marketing Specialist's is one of the two largest
food brokers in the United States.
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Marketing Specialists Corporation
Announces New Chief Financial Officer
Page 3
To receive Marketing Specialists' (f/k/a Merkert American) latest news
release and other corporate documents via FAX at no cost, dial 1.800.PRO.INFO.
Use the company's symbol, MKSP. Or visit the company's pages at www.frbinc.com.
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Reliance should not be placed on
forward-looking statements because they involve unknown risks, uncertainties and
other factors, which are, in some cases, beyond the control of Marketing
Specialists Corporation (f/k/a Merkert American). Actual events, performance and
results could differ materially from the anticipated events, performance or
results expressed or implied by such forward-looking statements. The factors
which may cause such differences include, among other things, Marketing
Specialists Corporation's ability to consummate any of the transactions
contemplated by the letters of intent to which Marketing Specialists Corporation
is a party; Marketing Specialists Corporation's ability to successfully
integrate any future and past acquisitions; principal realignment as a result of
the merger or consolidation of the food brokerage industry; the competitive
environment; and general economic conditions. For further information, please
refer to the company's filings with the Securities and Exchange Commission.
<PAGE> 1
EXHIBIT 99.2
Marketing Specialists Corporation
490 Turnpike Street
Canton, MA 02021
(Nasdaq/NMS:MKSP)
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
Gerald Leonard, President & Analyst Info: Michelle Cicoria
Chief Executive Officer General Info: Paula Schwartz
Tim Byrd, Chief Financial Officer Media Info: Judith Sylk Siegel
(781) 828-4800 (212) 661-8030
FOR IMMEDIATE RELEASE
October 13, 1999
MARKETING SPECIALISTS CORPORATION REVISES YEAR 2000 EARNINGS ESTIMATES
PROVIDES GUIDANCE FOR Q3 AND Q4 1999
CANTON, MA...OCTOBER 13, 1999 - Marketing Specialists Corporation
(Nasdaq/NMS:MKSP), a leading provider of outsourced sales and marketing services
to manufacturers, suppliers and producers of food products and consumer goods --
and the only publicly-traded food broker in the United States - announced today
revised estimates for the year ending December 31, 2000. Specifically,
management stated that at today's revenue run rate of approximately $400
million, which excludes any possible future acquisitions and new business, and
at operating margins consistent with analysts expectations of approximately 10%,
it expects earnings per share for the year ending December 31, 2000 to be in the
range of $0.40 to $0.50. This estimate includes the acquisition of Paul Inman
Associates, announced today, but excludes any pending or future transactions.
The Company's decision to revise estimates downward is due in large part to the
rapidity with which changes in the industry are unfolding - specifically related
to the continued consolidation among food brokers, retailers and manufacturers
("Principals"). Because of these swiftly changing dynamics, the Company is
finding that many manufacturers are delaying their decisions regarding
outsourcing the brokerage function, as they carefully consider the impact to
their business based on the range of local,
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Marketing Specialists Corporation
Announces Preliminary Results for Year Ended December 31, 2000
Provides Guidance for Remainder of 1999
Page 2
regional or national coverage they will receive. Additionally, management stated
that the Company lost several opportunities for new business over the past
several months, as Principals delayed making decisions with regard to broker
representation until the merger between Merkert American Corporation and
Richmont Marketing Specialists Inc. was completed at the end of August 1999.
Gerald Leonard, President and Chief Executive Officer of Marketing Specialists,
said, "As a result of these delays, it is difficult for us to accurately project
the level of additional revenues we will receive from new contracts beyond our
current levels -- and thus we thought it prudent to provide this new guidance
for next year. Nevertheless, as one of only four national food brokers in the
United States, and despite experiencing some lost lines in the second and third
quarters of 1999, now that the merger has been completed, our existing business
has stabilized and we are starting to win new business. Our goal is to offset
losses and grow new business into the fourth quarter of 1999 as we complete
numerous interviews with manufacturers over the next 30 days, in particular.
"As well, and importantly, pursuant to the recent merger, the Company has
achieved approximately 90%of its stated cost savings of about $30 million (on an
annualized basis) and we expect to continue to be on target for next year, with
operating margins consistent with analyst reports. Further savings will be
realized later this year and into next year as we eliminate excess office space
and consolidate accounting and financial functions into our Dallas headquarters.
"Clearly, the Company has faced some significant challenges over the past year
and we feel we are moving swiftly to rectify those issues which are within our
immediate control. At the end of this process, and the current industry shakeout
- -- and in large part due to the enormous talents and industry relationships of
our employees -- we believe we will emerge stronger and more strategically
positioned to continue as one of the industry's leading, national food brokers
and to create value for our shareholders. Our entire management team is
committed to achieving these goals."
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Marketing Specialists Corporation
Announces Preliminary Results for Year Ended December 31, 2000
Provides Guidance for Remainder of 1999
Page 3
THIRD AND FOURTH QUARTER 1999 OUTLOOK
With respect to results for the third and fourth quarters of 1999, Mr. Leonard
noted, "Although we will not be announcing actual third quarter 1999 results
until November, we expect to generate in excess of $5 million of EBITDA for the
third quarter ended September 30, 1999, and anticipate that this will improve
substantially in the fourth quarter as we build toward our year 2000 estimates
and continue to win new national accounts by the end of this year."
Marketing Specialists Corporation (f/k/a Merkert American Corporation) provides
outsourced sales, marketing and merchandising services to manufacturers of food
and other consumer products. Marketing Specialists is one of the two largest
food brokers in the United States.
###
To receive Marketing Specialists' (f/k/a Merkert American's) latest news release
and other corporate documents via FAX at no cost, dial 1-800-PRO-INFO. Use the
Company's symbol, MERK. The Company intends to change its trading symbol in
the near future.
Or visit the Company's pages at www.frbinc.com.
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Reliance should not be placed on
forward-looking statements because they involve unknown risks, uncertainties and
other factors, which are, in some cases, beyond the control of Marketing
Specialists Corporation (f/k/a Merkert American). Actual events, performance and
results could differ materially from the anticipated events, performance or
results expressed or implied by such forward-looking statements. The factors
which may cause such differences include, among other things, Marketing
Specialists Corporation's ability to consummate any of the transactions
contemplated by the letters of intent to which Marketing Specialists Corporation
is a party; Marketing Specialists Corporation's ability to successfully
integrate any future and past acquisitions; principal realignment as a result of
the merger or consolidation of the food brokerage industry; the competitive
environment; and general economic conditions. For further information, please
refer to the Company's filings with the Securities and Exchange Commission.
