|
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 |
AT THE COMPANY |
AT THE FINANCIAL RELATIONS BOARD |
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, |
|
|
|
|
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 |
|
|
|
|
Shares used to compute net loss per share |
|
|
|
|
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 |
|
|
|
|
Shares used to compute net loss |
|
|
|
|
____________________________________________________________________________
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, |
December 31, |
|
ASSETS |
||
Current assets: |
|
|
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: |
|
|
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: |
|
|
Total stockholders' equity |
123,737 |
118,242 |
Total liabilities and stockholders' equity |
$ 489,130 |
$ 449,616 |
|