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 three and nine month periods
ended September 30, 2010.
Net sales increased 22.7% and 12.7% for the three and nine month
periods ended September 30, 2010, to $18,302 and $50,057,
respectively, compared to $14,921 and $44,400 for the three and
nine months ended September 30, 2009, respectively. The Company
reported a net loss available to common stockholders of ($627) or
($0.09) per share and ($2,646) or ($0.37) per share for the three
and nine months ended September 30, 2010, compared to ($2,573) or
($0.36) per share and ($6,411) or ($0.89) per share for the three
and nine months ended September 30, 2009. The three and nine months
ended September 30, 2009, included expenses of $13 and a $1,910 net
gain, respectively, related to the settlement of litigation with
American Capital Strategies, Ltd.
Highlights for the period included:
-- The Company reported net income before preferred stock dividends ("net
income") of $38 for the three month period ended September 30, 2010;
-- Net income was reported for the second consecutive quarter; this is the
first time the company has reported two consecutive quarters of net
income since the end of 2007;
-- Gross Profit improved to 39% and 40% for the three and nine months
ended September 30, 2010, compared to 31% and 32% for the respective
2009 periods;
-- Excluding the 2009 net settlement gain, selling, general and
administrative ("SG&A") expenses were reduced by 13% and 15% during the
three and nine months ended September 30, 2010, respectively, compared
to the 2009 periods. As a percentage of revenues SG&A expenses were
reduced to 38% and 41% of revenues in the three and nine months ended
September 30, 2010 from 53% and 54% in the respective periods during
2009;
-- The signing of a new three year $14 million Revolving Credit Agreement
with PNC Bank enabling the company to have continuing access to
capital, paving the way for continuing financial strength.
Donald R. Uzzi, Chairman and CEO, noted that Merisel's results
for the third quarter reflect continuing improvement in both
revenues and operating efficiencies which are now generating
positive financial results. "The Company increased revenues during
the quarter and we are very pleased to announce two consecutive
quarterly periods with net income. Given the recent historic
results, this is another critical milestone for our company."
Mr. Uzzi further noted that Merisel continues to gain market
share with existing clients and win significant new client
business. "Our balance sheet remains strong and I am proud of the
diligence shown by our senior management team in guiding Merisel
through this difficult recession. We have positioned ourselves as a
strong, financially stable resource for our client base. Our
continuing capital investment in technology and state of the art
manufacturing equipment enables us to exceed client quality
expectations and drive production efficiencies in our plants as our
client base expands. The Merisel team remains focused on the long
term benefit of our stockholders and clients both now and in the
future."
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, and Fuel Digital. In
March 2010, Crush Creative and Fuel Digital were consolidated under
the ColorEdge brand. Merisel has sales offices in New York City,
Atlanta, Los Angeles, Chicago 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
15, 2010. 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, 2009, which is
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,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Net sales $ 18,302 $ 14,921 $ 50,057 $ 44,400
Cost of sales 11,234 10,321 30,220 30,159
-------- -------- -------- --------
Gross profit 7,068 4,600 19,837 14,241
Selling, general & administrative
expenses 6,885 7,918 20,409 22,092
-------- -------- -------- --------
Operating income (loss) 183 (3,318) (572) (7,851)
Interest expense, net 145 105 374 194
-------- -------- -------- --------
Income (loss) before benefit for
income tax 38 (3,423) (946) (8,045)
Income tax benefit - (1,465) (257) (3,443)
-------- -------- -------- --------
Net income (loss) 38 (1,958) (689) (4,602)
Preferred stock dividends 665 615 1,957 1,809
-------- -------- -------- --------
Loss available to common
stockholders $ (627) $ (2,573) $ (2,646) $ (6,411)
======== ======== ======== ========
Loss per share (basic and diluted):
Net loss available to common
stockholders $ (.09) $ (0.36) $ (.37) $ (0.89)
======== ======== ======== ========
Weighted average number of shares
Basic 7,214 7,186 7,213 7,205
Diluted 7,214 7,186 7,213 7,205
MERISEL, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Information to GAAP
(In Thousands)
Unaudited Supplemental Data:
The following information is not a financial measure under
generally accepted accounting principles (GAAP). In addition, it
should not be construed as an alternative to any other measures of
performance determined in accordance with GAAP, or as an indicator
of our operating performance, liquidity or cash flows generated by
operating, investing and financing activities as there may be
significant factors or trends that it fails to address. We present
this financial information because we believe that it is helpful to
some investors as one measure of our operations. We caution
investors that non-GAAP financial information, by its nature,
departs from traditional accounting conventions; accordingly, its
use can make it difficult to compare our results with our results
from other reporting periods and with the results of other
companies.
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Net loss available to common
stockholders $ (627) $ (2,573) $ (2,646) $ (6,411)
Add (subtract):
Net settlement expense (gain) - 13 - (1,910)
Taxes - (1,465) (257) (3,443)
-------- -------- -------- --------
Adjusted net loss available to
common stockholders (non-GAAP) (627) (4,025) (2,903) (11,764)
-------- -------- -------- --------
Selling general & administrative
expenses 6,885 7,918 20,409 22,092
Add (subtract):
Net settlement (expense) gain - (13) - 1,910
-------- -------- -------- --------
Adjusted selling, general &
administrative expenses (non-GAAP) 6,885 7,905 20,409 24,002
-------- -------- -------- --------