CoActive Marketing Group, Inc. (Nasdaq: CMKG), an
independent marketing, sales promotion and interactive services
company, in its Annual Report on Form 10-K recently filed with the
Securities and Exchange Commission, reported financial results for its
fiscal fourth quarter and year ended March 31, 2006.
Fiscal Year Performance
Net loss for fiscal 2006 was ($1,031,000), or ($.16) per diluted share, compared to net income of $1,152,000, or $.18 per diluted share for fiscal 2005. Fiscal 2006 results include aggregate pre-tax charges in excess of $3.0 million that are not expected to recur in fiscal 2007. These charges include approximately $900,000 of lease termination and occupancy costs associated with our former office in Great Neck, New York; $1.1 million of operating costs associated with non-revenue producing sales and administrative personnel that have been terminated; an impairment charge of $626,000 to write off of the goodwill associated with our Optimum subsidiary; a non-cash operating expense charge of $218,000 related to the Company's accounting for the lease of one of its offices; and additional bad debt provisions of $200,000.
Sales for fiscal 2006 were $98,038,000, compared to $83,951,000 for fiscal 2005, and included reimbursable costs and expenses of $38,338,000 and $29,999,000, respectively. At March 31, 2006, excluding MarketVision as well as reimbursable costs and expenses, the Company's sales backlog was approximately $22,781,000, compared to sales backlog of approximately $18,529,000 at March 31, 2005.
At March 31, 2006, the Company's bank debt had been reduced to $3,000,000 from $4,584,500 at March 31, 2005, a decrease of $1,584,500. In addition, at March 31, 2006, the Company had $3,000,000 of unused borrowing capacity under its revolving credit facility.
Fourth Quarter Performance
Net loss for the quarter ended March 31, 2006 was ($845,000) or ($0.13) per diluted share, compared to a net loss of ($154,000), or ($0.02) per diluted share, for the quarter ended March 31, 2005. The net loss for the fourth quarter of fiscal 2006 includes pre-tax non-recurring charges, amounting to approximately $1,280,000. Such charges consisted of: an impairment charge of $626,000 relating to the write off of the goodwill associated with the Company's Optimum subsidiary; severance and other employee termination costs of $300,000; a non-cash operating expense charge of $218,000 related to the Company's accounting for the lease of one of its offices; and an additional bad debt provision for a specific client of $137,000.
Sales for the quarter ended March 31, 2006 were $23,502,000 compared to $20,120,000 for the quarter ended March 31, 2005. Sales for the quarter ended March 31, 2006 and March 31, 2005 included $10,765,000 and $7,078,000 of reimbursable costs and expenses, respectively.
Fiscal 2007 Outlook
Marc Particelli, CoActive's interim President and Chief Executive Officer commented, "Fiscal 2006 was a disappointing year for us. However, we are taking active steps to both reduce costs and increase sales going forward and are confident in our ability to return to profitability and deliver improved financial results as a result of our actions, as well as our current backlog. The Company's continuing efforts to manage and control operating expenses have resulted in the Company entering Fiscal 2007 with what it believes to be a cost structure better aligned to its projected revenues." Mr. Particelli concluded, "Notwithstanding our operating results in Fiscal 2006, we were able to reduce bank debt by almost $1.6 million during the year, which together with our subsequent sale of MarketVision for $1.1 million in cash, has strengthened our balance sheet."
CoActive Marketing Group, Inc. is a marketing, sales promotion, and interactive services company that develops and manages integrated marketing, sales and promotional programs at both national and local levels for consumer product companies. The programs are geared towards growing incremental sales and profits by identifying and addressing key trade, sales and consumer trends.
Web site: www.coactivemarketing.com
This press release includes statements, which constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Such statements reflect the current views of the Company with respect to future events based on currently available information and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in those forward-looking statements. Factors that could cause actual results to differ materially from the Company's expectations are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2006 under "Risk Factors," including but not limited to "Outstanding Indebtedness; Security Interest," "Recent Losses," "Dependence on Key Personnel," "Customers," "Unpredictable Revenue Patterns," "Competition," "Risks Associated with Acquisitions," "Expansion Risk," and "Control by Executive Officers and Directors." The Form 10-K may be obtained by accessing the database maintained by the Securities and Exchange Commission at http://www.sec.gov -0- CoActive Marketing Group, Inc. Consolidated Statements of Operations Three and Twelve Months Ended (unaudited) Three Months Ended Twelve Months Ended ------------------ ------------------- March 31, March 31, March 31, March 31, 2006 2005 2006 2005 ----------------- ------------ ------------ ------------ ------------ Sales $23,502,362 $20,120,296 $98,038,354 $83,950,561 ----------------- ------------ ------------ ------------ ------------ Operating (Loss) Income (1,292,800) 196,242 (1,143,759) 2,972,824 ----------------- ------------ ------------ ------------ ------------ (Loss) Income before (Benefit) Provision for Income Taxes and Minority Interest in Net Income of Consolidated Subsidiary (1,334,453) 146,952 (1,362,521) 2,746,341 ----------------- ------------ ------------ ------------ ------------ (Benefit) Provision for Income Taxes (470,559) 186,380 (409,150) 1,100,555 ----------------- ------------ ------------ ------------ ------------ Net (Loss) Income before Minority Interest in Net Income of Consolidated Subsidiary (863,894) (39,428) (953,371) 1,645,786 ----------------- ------------ ------------ ------------ ------------ Minority Interest in Net Loss (Income) of Consolidated Subsidiary 18,413 (114,908) (77,856) (494,165) ----------------- ------------ ------------ ------------ ------------ Net (Loss) Income $(845,481) $(154,336) $(1,031,227) $1,151,621 ----------------- ------------ ------------ ------------ ------------ Net (Loss) Income per Common Share: ----------------- ------------ ------------ ------------ ------------ Basic $(0.13) $(0.02) $(0.16) $0.19 ----------------- ------------ ------------ ------------ ------------ Diluted $(0.13) $(0.02) $(0.16) $0.18 ----------------- ------------ ------------ ------------ ------------ Weighted Average Shares Outstanding: ----------------- ------------ ------------ ------------ ------------ Basic 6,618,951 6,192,823 6,452,847 6,004,948 ----------------- ------------ ------------ ------------ ------------ Diluted 6,618,951 6,192,823 6,452,847 6,391,435 ----------------- ------------ ------------ ------------ ------------ Consolidated Balance Sheet March 31, 2006 March 31, 2005 Total Assets $41,981,180 $34,932,341 Current Debt 1,000,000 1,000,000 Long-Term Debt 2,000,000 3,584,500 Total Liabilities 32,403,015 24,924,499 Stockholders' Equity 9,578,165 10,007,842
Fiscal Year Performance
Net loss for fiscal 2006 was ($1,031,000), or ($.16) per diluted share, compared to net income of $1,152,000, or $.18 per diluted share for fiscal 2005. Fiscal 2006 results include aggregate pre-tax charges in excess of $3.0 million that are not expected to recur in fiscal 2007. These charges include approximately $900,000 of lease termination and occupancy costs associated with our former office in Great Neck, New York; $1.1 million of operating costs associated with non-revenue producing sales and administrative personnel that have been terminated; an impairment charge of $626,000 to write off of the goodwill associated with our Optimum subsidiary; a non-cash operating expense charge of $218,000 related to the Company's accounting for the lease of one of its offices; and additional bad debt provisions of $200,000.
Sales for fiscal 2006 were $98,038,000, compared to $83,951,000 for fiscal 2005, and included reimbursable costs and expenses of $38,338,000 and $29,999,000, respectively. At March 31, 2006, excluding MarketVision as well as reimbursable costs and expenses, the Company's sales backlog was approximately $22,781,000, compared to sales backlog of approximately $18,529,000 at March 31, 2005.
At March 31, 2006, the Company's bank debt had been reduced to $3,000,000 from $4,584,500 at March 31, 2005, a decrease of $1,584,500. In addition, at March 31, 2006, the Company had $3,000,000 of unused borrowing capacity under its revolving credit facility.
Fourth Quarter Performance
Net loss for the quarter ended March 31, 2006 was ($845,000) or ($0.13) per diluted share, compared to a net loss of ($154,000), or ($0.02) per diluted share, for the quarter ended March 31, 2005. The net loss for the fourth quarter of fiscal 2006 includes pre-tax non-recurring charges, amounting to approximately $1,280,000. Such charges consisted of: an impairment charge of $626,000 relating to the write off of the goodwill associated with the Company's Optimum subsidiary; severance and other employee termination costs of $300,000; a non-cash operating expense charge of $218,000 related to the Company's accounting for the lease of one of its offices; and an additional bad debt provision for a specific client of $137,000.
Sales for the quarter ended March 31, 2006 were $23,502,000 compared to $20,120,000 for the quarter ended March 31, 2005. Sales for the quarter ended March 31, 2006 and March 31, 2005 included $10,765,000 and $7,078,000 of reimbursable costs and expenses, respectively.
Fiscal 2007 Outlook
Marc Particelli, CoActive's interim President and Chief Executive Officer commented, "Fiscal 2006 was a disappointing year for us. However, we are taking active steps to both reduce costs and increase sales going forward and are confident in our ability to return to profitability and deliver improved financial results as a result of our actions, as well as our current backlog. The Company's continuing efforts to manage and control operating expenses have resulted in the Company entering Fiscal 2007 with what it believes to be a cost structure better aligned to its projected revenues." Mr. Particelli concluded, "Notwithstanding our operating results in Fiscal 2006, we were able to reduce bank debt by almost $1.6 million during the year, which together with our subsequent sale of MarketVision for $1.1 million in cash, has strengthened our balance sheet."
CoActive Marketing Group, Inc. is a marketing, sales promotion, and interactive services company that develops and manages integrated marketing, sales and promotional programs at both national and local levels for consumer product companies. The programs are geared towards growing incremental sales and profits by identifying and addressing key trade, sales and consumer trends.
Web site: www.coactivemarketing.com
This press release includes statements, which constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Such statements reflect the current views of the Company with respect to future events based on currently available information and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in those forward-looking statements. Factors that could cause actual results to differ materially from the Company's expectations are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2006 under "Risk Factors," including but not limited to "Outstanding Indebtedness; Security Interest," "Recent Losses," "Dependence on Key Personnel," "Customers," "Unpredictable Revenue Patterns," "Competition," "Risks Associated with Acquisitions," "Expansion Risk," and "Control by Executive Officers and Directors." The Form 10-K may be obtained by accessing the database maintained by the Securities and Exchange Commission at http://www.sec.gov -0- CoActive Marketing Group, Inc. Consolidated Statements of Operations Three and Twelve Months Ended (unaudited) Three Months Ended Twelve Months Ended ------------------ ------------------- March 31, March 31, March 31, March 31, 2006 2005 2006 2005 ----------------- ------------ ------------ ------------ ------------ Sales $23,502,362 $20,120,296 $98,038,354 $83,950,561 ----------------- ------------ ------------ ------------ ------------ Operating (Loss) Income (1,292,800) 196,242 (1,143,759) 2,972,824 ----------------- ------------ ------------ ------------ ------------ (Loss) Income before (Benefit) Provision for Income Taxes and Minority Interest in Net Income of Consolidated Subsidiary (1,334,453) 146,952 (1,362,521) 2,746,341 ----------------- ------------ ------------ ------------ ------------ (Benefit) Provision for Income Taxes (470,559) 186,380 (409,150) 1,100,555 ----------------- ------------ ------------ ------------ ------------ Net (Loss) Income before Minority Interest in Net Income of Consolidated Subsidiary (863,894) (39,428) (953,371) 1,645,786 ----------------- ------------ ------------ ------------ ------------ Minority Interest in Net Loss (Income) of Consolidated Subsidiary 18,413 (114,908) (77,856) (494,165) ----------------- ------------ ------------ ------------ ------------ Net (Loss) Income $(845,481) $(154,336) $(1,031,227) $1,151,621 ----------------- ------------ ------------ ------------ ------------ Net (Loss) Income per Common Share: ----------------- ------------ ------------ ------------ ------------ Basic $(0.13) $(0.02) $(0.16) $0.19 ----------------- ------------ ------------ ------------ ------------ Diluted $(0.13) $(0.02) $(0.16) $0.18 ----------------- ------------ ------------ ------------ ------------ Weighted Average Shares Outstanding: ----------------- ------------ ------------ ------------ ------------ Basic 6,618,951 6,192,823 6,452,847 6,004,948 ----------------- ------------ ------------ ------------ ------------ Diluted 6,618,951 6,192,823 6,452,847 6,391,435 ----------------- ------------ ------------ ------------ ------------ Consolidated Balance Sheet March 31, 2006 March 31, 2005 Total Assets $41,981,180 $34,932,341 Current Debt 1,000,000 1,000,000 Long-Term Debt 2,000,000 3,584,500 Total Liabilities 32,403,015 24,924,499 Stockholders' Equity 9,578,165 10,007,842