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Merisel, Inc.: Merisel, Inc. Announces Second Quarter 2009 Results


Published on 2009-08-14 14:03:55, Last Modified on 2009-08-14 14:04:09 - Market Wire
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NEW YORK, NY--(Marketwire - August 14, 2009) - Merisel, Inc. (PINKSHEETS: [ MSEL ]), a leading provider of visual communications and brand imaging solutions to the consumer products, retail, advertising and entertainment industries, today reported financial results for the second quarter ended June 30, 2009.

The Company reported a loss available to common shareholders of $(3,346) or $(0.46) and $(3,838) or $(0.53) per share for the three and six months ended June 30, 2009, respectively, as compared to a loss of $(1,586) or $(0.20) and $(2,772) or $(0.35) per share for the three and six months ended June 30, 2008, respectively. Revenues for the three and six months ended June 30, 2009 were $12,377 and $29,479, respectively, as compared to $20,342 and $41,694 for the three and six months ended June 30, 2008, respectively.

"The 'Great Recession' has affected consumers, retail clients, the advertising industry and, as a result, Merisel," stated Mr. Donald R. Uzzi, Chairman and Chief Executive Officer of Merisel. "Merisel has seen a market decline in revenue and thus, related losses in the second quarter. After a very challenging first half and particularly soft second quarter, Merisel's management believes that the economy is bottoming." Mr. Uzzi stated that during this period, the entire Merisel team has been working diligently to not only weather the recessionary storm but also to strengthen the Company for the second half of 2009 and beyond. Mr. Uzzi added that his recent discussions with clients and the Company's client-facing organization are offering encouraging signs of opportunity over the next six to twelve months.

Mr. Uzzi further noted that the Company's highlights in the first half of the fiscal year include:

Client Management: Merisel's "Client Value Proposition" remains strong and relevant. The Company believes that its clients know, and the Company's research confirms, that in-store graphic imaging drives sales. Merisel's account managers work closely with the Company's clients to drive their revenues and achieve their financial goals. Merisel believes that its clients recognize that they need to drive sales and Merisel's products and services are integral to that result.

The Company continues to invest in its client management and business development teams. Merisel has added to its strength by successfully recruiting a number of new account managers with strong industry presence. These new account managers joined Merisel because they believe in Merisel's Client Value Proposition for the long-term relationship and success of their clients.

Merisel believes that although its legacy client base has temporarily reduced spending due to economic circumstances, the legacy client base remains substantially intact. Concurrently, the Company has added numerous high profile clients to the Merisel portfolio, all of whom will contribute to the Company's future growth.

Balance Sheet/Cash Position: As of June 30, 2009, Merisel had a cash position of $10,285, an increase of $883 from March 31, 2009. During August, based on our current receivable balance, the Company has repaid $600 due under the agreement with the Bank. We are in ongoing discussions with the Bank regarding an extension of the agreement that would better support the growth opportunities identified by management. The Company continues to take actions to insure the strength of its balance sheet.

Process Improvement/Cost Reduction: Merisel continues to focus on how it can eliminate waste and simplify production. Over the past 18 months, the Company has reduced annualized costs by $12,000. Merisel has been "right-sized" to meet today's market challenges. Merisel continues to focus aggressively on process improvements and cost reductions and will continue to do so even as market conditions improve.

Technology: Merisel has embraced production technology and innovation like never before. The Company's Board of Directors recently approved capital expenditures that will upgrade Merisel's primary production equipment to maintain its state of the art status and to provide for increased production, higher quality and lower costs. Doing this in the current market allows Merisel to take advantage of more aggressive pricing on the part of its equipment suppliers. In the second half of 2009, the Company's East and West Coast production plants will be inter-changeable and will have identified redundant systems, which can produce product for our clients simultaneously in either facility. This will enable Merisel to better load balance its capacity and to ensure the highest quality available to the market; as a result, Merisel will better serve its valued clients and expects to expand the Company's market position.

New Products and Solutions: Merisel has expanded its product offerings to clients including a new environmentally-friendly line. The Company's new equipment will enable it to print on all substrates available to the market.

Market Activity: The Company continues to be receptive to strategic consolidation opportunities as the economy severely threatens competitors. The expectation of Merisel's management is that this will play out over the next 6 to 12 months and that there may be advantageous opportunities for the Company.

Mr. Uzzi noted that Merisel has been active during this "Great Recession" toward strengthening the Company and taking its clients to a new level of service and products and to position the Company to dramatically improve its results as the economy begins to recover. "Merisel continues to manage its costs and allocate its capital to position the Company for long-term sustainable growth," said Mr. Uzzi.

About Merisel

Merisel, headquartered in New York, N.Y., is a leading visual communications and brand imaging solutions provider to its clients. Merisel provides a broad portfolio of digital and graphic services to clients in the retail, manufacturing, beverage, cosmetic, advertising, entertainment and consumer packaged goods industries. These solutions are delivered to clients through its portfolio companies: ColorEdge, Crush Creative, Comp 24, Dennis Curtin Studios, AdProps, and Fuel Digital. Merisel has sales offices in New York City, Atlanta, Los Angeles and Portland, Oregon, and production facilities in New York, New Jersey, Atlanta and Los Angeles to ensure the highest quality solutions and services to its clients. Learn more at [ www.merisel.com ].

Cautionary Statement

This release contains statements concerning Merisel's expectations for future performance, and are forward-looking statements as that term is used in the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," or "will." Any such forward-looking statements are inherently speculative and are based on currently available information, operating plans and projections about future events and trends. As such, these statements are subject to numerous risks and uncertainties. These uncertainties may cause our actual future results to be materially different than those express in our forward-looking statements. The Company undertakes no obligation to update any such forward-looking statements. Please see the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K, for a discussion of specific risks that may affect performance.

 MERISEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended June Six Months Ended June 30, 30, 2009 2008 2009 2008 ----------- ----------- ----------- ----------- Net sales $ 12,377 $ 20,342 $ 29,479 $ 41,694 Cost of sales 9,102 11,735 19,838 23,700 ----------- ----------- ----------- ----------- Gross profit 3,275 8,607 9,641 17,994 Selling, general & administrative expenses 8,024 10,406 14,174 20,887 ----------- ----------- ----------- ----------- Operating loss (4,749) (1,799) (4,533) (2,893) Interest expense, net 48 24 89 25 ----------- ----------- ----------- ----------- Loss from continuing operations before benefit for income tax (4,797) (1,823) (4,622) (2,918) Income tax benefit (2,053) (789) (1,978) (1,249) ----------- ----------- ----------- ----------- Loss from continuing operations (2,744) (1,034) (2,644) (1,669) Income from discontinued operations, net of taxes - 4 - - ----------- ----------- ----------- ----------- Net loss (2,744) (1,030) (2,644) (1,669) Preferred stock dividends 602 556 1,194 1,103 ----------- ----------- ----------- ----------- Loss available to common stockholders $ (3,346) $ (1,586) $ (3,838) $ (2,772) =========== =========== =========== =========== Loss per share (basic and diluted): Net loss available to common stockholders $ (0.46) $ (0.20) $ (0.53) $ (0.35) Weighted average number of shares Basic 7,187 7,893 7,214 7,889 Diluted 7,187 7,893 7,214 7,889 

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