MARKETING SPECIALISTS CORP
8-K, EX-99.2, 2000-08-28
GROCERIES, GENERAL LINE
Previous: MARKETING SPECIALISTS CORP, 8-K, EX-99.1, 2000-08-28
Next: SERVICEWARE TECHNOLOGIES INC/ PA, 424B4, 2000-08-28

Exhibit 99.2

 

 

Marketing Specialists Corporation
17855 Dallas Parkway, Suite 310
Dallas, TX 75287
(Nasdaq: MKSP)

 

 

AT THE COMPANY
Gerald Leonard, President & CEO
   (781) 828-4800
Terry Crump, Chief Financial Officer
   (972) 349.6370
Randall Oxford, Media Relations
   (972) 349-6580

AT THE FINANCIAL RELATIONS BOARD
Analyst Info: Steve Martini
General Info: Paula Schwartz
Media Info: Judith Sylk Siegel
   (212) 661-8030

 

FOR IMMEDIATE RELEASE
August 22, 2000

 

 

MARKETING SPECIALISTS CORPORATION ANNOUNCES
SECOND-QUARTER 2000 FINANCIAL RESULTS

 

 

Dallas, TX...August 22, 2000 - Marketing Specialists Corporation (Nasdaq: MKSP), a leading provider of outsourced sales and marketing services to manufacturers, suppliers and producers of food products and consumer goods, reported today its financial results for the quarter ended June 30, 2000.

Second-Quarter 2000 Results

The following table sets forth the results of operations of the Company for the periods indicated. On August 18, 1999, the Company completed its merger ("Merger") with Dallas-based Richmont Marketing Specialists Inc. ("Richmont"). For financial reporting purposes, the Company is presented as the accounting acquirer. Accordingly, the results of Richmont's operations have been included in the Company's consolidated statement of operations since the date of the Merger. The 1999 results do not reflect proforma adjustments as if the Merger had been completed on January 1, 1999.

 

-- more --

_____________________________________________________________________________

Marketing Specialists
Second-Quarter 2000 Results
Page 2

 

Unaudited Financial Summary Table
Amounts in Thousands Except Share & Per-Share Data

 

Three Months Ended June 30,

Six Months Ended June 30,

 

2000

1999

2000

1999

Commissions..................................

$99,055 

$41,131 

$193,497 

$85,008 

Sales............................................

9,115 
_____ 

9,338 
_____ 

19,639 
______ 

22,087 
______ 

Revenues.......................................

108,170 

50,469 

213,136 

107,095 

         

Earnings before interest, taxes,
   depreciation and amortization...........


8,191 


19 


14,703 


6,632 

         

Loss before income taxes....................

(5,190)

(3,653)

(11,263)

(322)

         

Net loss........................................

($5,224)

($2,914)

($11,297)

($1,082)

         

Net loss per share
   Basic and Diluted.........................


($0.26)


($0.39)


($0.64)


($0.14)

         

Shares used to compute net loss per share
   Basic and Diluted..........................


19,751,131


7,508,000


17,742,999


7,477,000

The Company reported that commission revenue for the quarter ended June 30, 2000, increased $57.9 million (or 141 percent) to $99.0 million compared to the same period last year. Total revenues for the quarter were $108.2 million versus $50.5 million for the same period last year. For the six months ended June 30, 2000, total revenues were $213.1 million in 2000 compared to $107.1 million in 1999 (a 99 percent increase). These increases were primarily related to the inclusion of commissions for Richmont in 2000 as a result of the Merger.

Cash selling, general and administrative expenses (CSG&A) for the second quarter ended June 30, 2000, were $92.1 million compared to $41.9 million for the same period in 1999. Total cash selling, general and administrative expenses for the six months ended June 30, 2000, were $181.1 million compared to $80.6 million for the same period last year. The increase in CSG&A was primarily attributable to the inclusion of Richmont expenses as a result of the Merger.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter ended June 30, 2000, were $8.2 million compared to $6.5 million in the quarter ended March 31, 2000. This increase resulted from the recognition of revenues from its recently announced national contracts. EBITDA for the quarter ended June 30, 2000, was $8.2 million compared to $19,000 for the same period last year.

-- more -

__________________________________________________________________________

Marketing Specialists
Second-Quarter 2000 Results
Page 3

 

The Company's net loss for the quarter ended June 30, 2000, was ($5.2) million or ($0.26) per share compared to a net loss of ($2.9) million or ($0.39) per share for the same period last year. The Company reported a net loss of ($11.3) million or ($0.64) per share compared to a net loss of ($1.1) million or ($0.14) per share for the same period last year. The change was primarily related to increases of depreciation and amortization from the Merger and interest costs associated with the increased debt levels.

On March 30, 2000, the Company completed the refinancing of its credit facility, which resulted in a new, two-year $50.0 million revolving credit facility ("New Revolver") and a two-year $35.0 million term loan ("Amended Term Loan"). The Company used proceeds from the New Revolver to reduce the principal amount of the term loan to $35.0 million. As a result of the refinancing, no principal payments are required on the Amended Term Loan for two years.

Management Remarks on Second-Quarter Results
Commenting on the results, Gerald Leonard, president and chief executive officer of Marketing Specialists, said, "While the near-term effect of business the Company lost due to conflicts resulting from the merger between Marketing Specialists and Merkert American continued to impact our results during the second quarter, the tremendous potential of our newly acquired national penetration became apparent as business from national agreements signed during the previous quarter was generated.

"Additional national appointments were in the pipeline during the second quarter, and we anticipate being able to announce new national contracts during the next few months. Our continuing ability to develop long-term relationships with preeminent manufacturers seeking national representation of their products underscores the importance of our recent merger and the resulting changes we continue to make in our business."

Addressing other developments during the quarter, Mr. Leonard noted, "Our announcement of the addition of E-commerce services in May is significant because it affords us another opportunity to expand sales for the manufacturers we represent. Historically, Marketing Specialists has been a leader in the application of information and technology within the food brokerage industry, and our addition of e-commerce services to our comprehensive portfolio demonstrates our willingness to develop every possible sales channel for our business partners.

"Finally, the offer by Richmont Capital Partners, announced in June, to purchase our outstanding shares of stock is currently being evaluated by a special committee of independent directors who will fully review the offer and make a recommendation to our board. The board anticipates receiving the committee's report during the third quarter and will act upon it in an expeditious manner."

Marketing Specialists Corporation provides outsourced sales, marketing and merchandising services to manufacturers of food and other consumer products. With more than 6,000 associates in 65 locations throughout the United States, Marketing Specialists is one of the largest food brokers in the nation.

-- more --

___________________________________________________________________________

Marketing Specialists
Second-Quarter 2000 Results
Page 4

 

* * *

Financial Tables Follow

* * *

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. 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' ability to consummate any of the transactions contemplated by the letters of intent to which Marketing Specialists is a party; Marketing Specialists' ability to successfully integrate any future and past acquisitions; the stockholder vote or other conditions relating to the Richmont merger; principal realignment as a result of the merger, the competitive environment; and general economic conditions. For further information, please refer to the Company's filings with the Securities and Exchange Commission.

* * *

 

To receive Marketing Specialists' latest news release and other corporate documents via FAX at no cost, dial 1-800-PRO-INFO. Use the Company's code, MKSP.
Or visit the Company's pages at www.frbinc.com.

 

# # #

____________________________________________________________________________

Marketing Specialists
Second-Quarter 2000 Results
Page 5

 

 

MARKETING SPECIALISTS CORPORATION
(FORMERLY MERKERT AMERICAN CORPORATION)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and amounts in thousands, except share and per-share amounts)

 

Three Months Ended June 30,

Six Months Ended June 30,

 

2000

1999

2000

1999

         

Commissions

$  99,055 

$  41,131 

$ 193,497 

$  85,008 

Sales

9,115 
________ 

9,338 
________ 

19,639 
________ 

22,087 
________ 

         

Revenues

108,170 

50,469 

213,136 

107,095 

         

Cost of Sales

7,857 

8,542 

17,312 

19,844 

Selling expenses

74,364 

28,297 

145,119 

55,674 

General and administrative

17,758 

13,611 

36,002 

24,945 

Depreciation and amortization

6,506 
________ 

1,550 
________ 

12,729 
________ 

3,008 
________ 

         

Operating expenses

106,485 
________ 

52,000 
________ 

211,162 
________ 

103,471 
________ 

         

Operating income (loss)

1,685 

(1,531)

1,974 

3,624 

         

Interest expense, net

(6,972)

(2,122)

(13,390)

(3,946)

Other income, net

97 
________ 

(0)
________ 

153 
________ 

(0)
________ 

         

Loss before income taxes

(5,190)

(3,653)

(11,263)

(322)

         

Provision (benefit) for income taxes

34 
________ 

(739)
________ 

34 
________ 

760 
________ 

         

Net (loss)

$  (5,224)

$  (2,914)

$ (11,297)

$  (1,082)

         

Net income (loss) per share
  Basic and Diluted


$  (0.26)


$  (0.39)


$  (0.64)


$  (0.14)

         

Shares used to compute net loss
  per share Basic and Diluted


19,751,131


7,508,000


17,742,999


7,477,000

____________________________________________________________________________

Marketing Specialists
Second-Quarter 2000 Results
Page 6

 

MARKETING SPECIALISTS CORPORATION
(FORMERLY MERKERT AMERICAN CORPORATION)
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share amounts)

 

June 30,
   2000
(unaudited)

December 31,
   1999

ASSETS

   
     

Current assets:
     Restricted cash
     Accounts receivable, less allowance for doubtful accounts
          of $3,557 and $5,730, respectively
     Inventory
     Properties held for sale
     Prepaid expenses and other


$        962 

70,722 
1,260 

3,309 
__________ 


$        1,200 

53,579 
1,221 
7,312 
2,895 
__________ 

     

          Total current assets

76,253 

66,207 

     

Other assets

14,568 

9,665 

Property, plant and equipment, net

33,983 

35,204 

Intangibles, net

364,326 
__________ 

338,540 
__________ 

     

          Total assets

$    489,130 

$    449,616 

     

LIABILITIES AND STOCKHOLDERS' EQUITY

   
     

Current liabilities:
     Current maturities of long-term obligations
     Accounts payable
     Accrued expenses


$     66,526 
21,949 
33,285 
__________ 


$     48,055 
14,396 
33,664 
__________ 

     

          Total current liabilities

121,760 

96,115 

     

Long-term obligations, net of current portion

234,925 

227,831 

     

Other liabilities

3,708 

7,428 

     

Commitments and contingencies

   
     

Redeemable convertible preferred stock, at redemption value

5,000 

     

Stockholder's equity:
     Common stock, $0.01 par value - Authorized - 54,000,000 shares
          Issued and outstanding - 19,751,131 and 14,173,844, respectively
     Additional paid-in capital
     Note for sale of common stock
     Accumulated deficit
     Treasury stock, at cost



198 
159,816 
(1,500)
(34,330)
(447)
__________ 



142 
143,080 
(1,500)
(23,033)
(447)
__________ 

     

          Total stockholders' equity

123,737 
__________ 

118,242 
__________

     

          Total liabilities and stockholders' equity

$    489,130 

$    449,616 



© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission