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Exhibit 99.1
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17855 Dallas Parkway |
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CONTACTS Gerald Leonard, President & CEO |
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FOR IMMEDIATE RELEASE |
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MARKETING SPECIALISTS CORPORATION ANNOUNCES |
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DALLAS, TX... November 22, 2000 - Marketing Specialists Corporation (Nasdaq/SC: 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 and nine months ended September 30, 2000. The quarter and nine months ended September 30, 1999 do not reflect pro forma adjustments as if the merger with Richmont Marketing Specialists, Inc. had been completed on January 1, 1999. |
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For the third quarter ended September 30, 2000, the net loss was $(37.9) million, or $(1.68) per share, on revenues of $99.0 million compared to a net loss of $(17.1) million, or $(1.61) per share, on revenues of $76.9 million for the comparable quarter of 1999. As previously announced, the Company recorded restructuring and nonrecurring charges of approximately $22.0 million to recognize severance costs and related benefits and reserves for certain receivables related to the continuing integration of business processes and a change in the accounting estimate for reserves of receivables. The net loss, excluding the restructuring and other nonrecurring charges, was $(15.9) million, or $(0.71) per share, for the quarter ended September 30, 2000, compared to $(3.8) million, or $(0.36) per share, for the same quarter of 1999. On a pro forma basis, the net loss for the quarter ended September 30, 1999, excluding the restructuring charge, would have been approximately $(5.2) million, or $(0.37) per share, on revenues of approximately $104.3 million. |
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For the nine months ended September 30, 2000, the net loss was $(49.2) million, or $(2.54) per share, on revenues of $312.2 million compared to a net loss of $(18.2) million, or $(2.12) per share, on revenues of $184.0 million. The net loss, excluding the restructuring and other nonrecurring charges, was $(27.2) million, or $(1.41) per share, for the nine months ended September 30, 2000, compared to $(4.9) million, or $(0.57) per share, for the same period of 1999. On a pro forma basis, the net loss for the nine months ended September 30, 1999, excluding the restructuring charge, would have been approximately $(19.9) million, or $(1.40) per share, on revenues of approximately $316.9 million. |
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-- more -- |
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MARKETING SPECIALISTS CORPORATION ANNOUNCES |
PAGE 2 OF 3 |
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EBITDA, defined as earnings before interest, taxes, depreciation, amortization and excluding the restructuring and nonrecurring charges, for the quarter ended September 30, 2000 were $183,000 as compared to $2.8 million for the comparable 1999 quarter. For the nine months ended September 30, 2000, EBITDA was $14.9 million compared to $9.4 million for the same prior year period. |
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"Third quarter revenues and EBITDA were definitely below our expectations and disappointing to management, but we have taken initial corrective action to adjust our selling costs to align with the expected revenues for the fourth quarter of 2000," stated Gerald Leonard, president and chief executive officer. "We continue to believe that our revenue momentum is moving forward on a positive note based on our improving base of national manufacturer representation. |
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"We are pleased to announce that as of November 17, 2000, the Company has completed negotiations for an amendment to certain provisions of our existing senior credit facility, which increases the amount of available funds that we may utilize for general operating needs. With the amendment and the positive financial support from Richmont Capital Partners I, LP that we have received to date, the Company is now in a better position to support our operations as we move forward to the start of 2001, " concluded Mr. Leonard. |
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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. |
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# # # |
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FINANCIAL TABLE FOLLOWS |
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# # # |
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To receive Marketing Specialists' latest news release and other corporate documents via FAX at no cost, |
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Or visit the Company's pages at www.frbinc.com |
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# # # |
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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 complete renegotiations with its bankers involving financing and covenant issues, successfully integrate any future or past acquisitions; complete or modify conditions relating to Richmont's pending offer to purchase all outstanding shares of the Company, realign principals as a result of the merger and consummate transactions contemplated by letters of intent to which Marketing Specialists is a party, as well as the competitive environment and general economic conditions. For further information, please refer to the Company's filings with the Securities and Exchange Commission. |
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# # # |
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MARKETING SPECIALISTS CORPORATION ANNOUNCES |
PAGE 2 OF 3 |
Marketing Specialists Corporation
Condensed Consolidated Statements of Operations
(Amounts in thousands, except share amounts)
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2000 |
1999 |
% |
2000 |
1999 |
% |
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Revenues: |
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Commission Income |
$ 89,547 |
$ 66,158 |
+35% |
$ 283,045 |
$ 151,166 |
+87% |
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Sales |
9,476 |
10,710 |
-12% |
29,114 |
32,797 |
-11% |
Total revenues |
99,023 |
76,868 |
+29% |
312,159 |
183,963 |
+70% |
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Expenses: |
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Cost of sales |
8,245 |
9,391 |
-12% |
25,556 |
29,235 |
-13% |
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Sales expenses |
73,849 |
44,458 |
+66% |
218,969 |
100,132 |
+119% |
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General and administration |
16,746 |
20,258 |
-17% |
52,748 |
45,203 |
+17% |
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Depreciation and amortization |
7,116 |
3,163 |
+125% |
19,845 |
6,171 |
+222% |
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Restructuring and other nonrecurring charges |
21,971 |
13,290 |
+65% |
21,971 |
13,290 |
+65% |
Total operating expenses |
127,927 |
90,560 |
+41% |
339,089 |
194,031 |
+75% |
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Operating loss |
(28,904) |
(13,692) |
-111% |
(26,930) |
(10,068) |
-167% |
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Interest expense, net |
(8,919) |
(4,158) |
+115% |
(22,309) |
(8,104) |
+175% |
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Other income (expense), net |
(21) |
- |
nm |
132 |
- |
nm |
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Loss before income taxes |
(37,844) |
(17,850) |
-112% |
(49,107) |
(18,172) |
-170% |
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Income taxes provision (benefit) |
38 |
(760) |
-105% |
72 |
- |
nm |
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Net loss |
$ (37,882) |
$ (17,090) |
-122% |
$ (49,179) |
$ (18,172) |
-171% |
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Net loss per share, basic and diluted |
$ (1.68) |
$ (1.61) |
$ (2.54) |
$ (2.12) |
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Shares used to compute net loss per share, basic and diluted |
22,521,982 |
10,637,257 |
19,335,993 |
8,555,514 |
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EBITDA (1) |
$ 183 |
$ 2,761 |
-93% |
$14,886 |
$ 9,393 |
+58% |
Condensed Consolidated Balance Sheets
(in thousands)
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September 30, |
December 31, |
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2000 |
1999 |
1999 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ - |
$ 4,438 |
$ - |
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Restricted cash |
857 |
9,538 |
1,200 |
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Accounts receivables, net |
46,218 |
55,495 |
53,579 |
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Inventory |
1,286 |
1,150 |
1,221 |
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Properties held for sale |
- |
- |
7,312 |
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Prepaid expenses and other assets |
2,851 |
5,570 |
2,895 |
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Total current assets |
51,212 |
76,191 |
66,207 |
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Property, plant and equipment, net |
32,732 |
40,044 |
35,204 |
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Other long-term assets |
13,874 |
12,178 |
9,665 |
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Intangible assets including Goodwill, net |
362,518 |
336,081 |
338,540 |
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$ 460,336 |
$ 464,494 |
$ 449,616 |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable |
$ 26,221 |
$ 9,002 |
$ 14,396 |
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Accrued liabilities |
31,673 |
42,049 |
33,664 |
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Current portion - long term debt |
63,094 |
24,878 |
48,055 |
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Total current liabilities |
120,988 |
75,929 |
96,115 |
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Long term debt - less current |
241,286 |
245,914 |
227,831 |
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Non - current liabilities |
2,707 |
21,060 |
7,428 |
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Stockholders' equity |
95,355 |
121,591 |
118,242 |
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$ 460,336 |
$ 464,494 |
$ 449,616 |
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(1) EBITDA is defined as earnings before interest, taxes, depreciation and amortization and excludes nonrecurring and restructuring charges. |
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