Science & Technology
Science and Technology
Science and Technology
Tue, November 17, 2009
Mon, November 16, 2009
NEW YORK, NY--(Marketwire - November 16, 2009) - Merisel, Inc. (
The Company reported a loss available to common shareholders of $(2,573) or $(0.36) per share and $(6,411) or $(0.89) per share for the three and nine month periods ended September, 30, 2009, respectively, as compared to a loss of $(424) or $(0.05) per share and $(3,196) or $(0.41) per share for the three and nine month periods ended September 30, 2008, respectively. Revenues for the three and nine months ended September 30, 2009, were $14,921 and $44,400, respectively, as compared to $21,607 and $63,301 for the three and nine months ended September 30, 2008.
Although the recession continues to affect Merisel's revenues and profitability, third quarter revenue of $14,921 was an improvement of $2,544 or 20.6% as compared to revenues of $12,377 in the second quarter. Additionally, the loss available to common shareholders of $(2,573) in the third quarter compares favorably to the second quarter loss of $(3,346), an improvement of $773 or 23.1%.
"The 21% improvement in sequential revenues recognized in the current quarter is a clear indicator that our clients are beginning to re-focus on marketing their brands," stated Mr. Donald R. Uzzi, Chairman and Chief Executive Officer. "While revenues have remained soft, we are seeing indications from our clients that increased spending will continue into the fourth quarter."
Mr. Uzzi further noted that during the third quarter the Company:
-- Successfully entered into a new Credit Agreement with Amalgamated Bank, which extended the maturity of its existing credit agreement to August 31, 2011. -- Reduced its bank debt by $1,715 and reported a working capital balance (current assets less current liabilities) of $15,438 and a current ratio (current assets divided by current liabilities) of more than 2.6 to 1.0. -- Implemented the technology plan announced in August 2009, and began the upgrade of Merisel's primary production equipment portfolio; maintaining its state of the art status. The upgrade will increase production capacity while generating higher quality for our client companies. -- Continued to focus on eliminating waste and simplifying production. The Company's cost of sales and SG&A expenses both declined as a percentage of revenues in the third quarter compared to the second quarter. Additionally Merisel will continue to focus on process improvement and cost reduction as market conditions continue to improve.
Mr. Uzzi noted that the Merisel team has worked diligently to strengthen the Company during this difficult time. "The extension of the bank facility at a time where capital is very tight, coupled with the commitment made to capital equipment this year, positions the Company for sustainable growth as the economy improves. Merisel continues to add to its product offerings and remains receptive to strategic consolidation opportunities as the economy threatens the competition's long term viability."
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 press release contains forward-looking statements that involve risks and uncertainties concerning Merisel's expectations for future performance (including without limitation the quotations from management in this press release). In this context, forward-looking statements often address Merisel's 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 that include, among others, the impact of management and organizational changes, the implementation of ongoing strategic and cost initiatives, changes in and a dependence on key personnel, the outcome of pending legal proceedings, the severity and duration of the current economic conditions and changes in economic conditions. These uncertainties may cause Merisel's actual future results to be materially different than those expressed in such forward-looking statements. All information set forth in this press release is as of November 16, 2009. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of the press release. The Company undertakes no obligation to update any such forward-looking statements. More information about the potential factors that could affect Merisel's business and financial results is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2008 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, which are on file with the SEC and available on the SEC's website at [ www.sec.gov ].
MERISEL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 2009 2008 2009 2008 -------- -------- -------- -------- Net sales $ 14,921 $ 21,607 $ 44,400 $ 63,301 Cost of sales 10,321 11,942 30,159 35,642 -------- -------- -------- -------- Gross profit 4,600 9,665 14,241 27,659 Selling, general & administrative expenses 7,918 9,359 22,092 30,246 -------- -------- -------- -------- Operating (loss) income (3,318) 306 (7,851) (2,587) Interest expense, net 105 53 194 78 -------- -------- -------- -------- (Loss) income before (benefit) provision for income tax (3,423) 253 (8,045) (2,665) Income tax (benefit) provision (1,465) 109 (3,443) (1,140) -------- -------- -------- -------- Net (loss) income (1,958) 144 (4,602) (1,525) Preferred stock dividends 615 568 1,809 1,671 -------- -------- -------- -------- Loss available to common stockholders $ (2,573) $ (424) $ (6,411) $ (3,196) ======== ======== ======== ======== Loss per share (basic and diluted): Net loss available to common stockholders $ (0.36) $ (0.05) $ (0.89) $ (0.41) Weighted average number of shares Basic 7,186 7,838 7,205 7,865 Diluted 7,186 7,987 7,205 7,865
