SAN DIEGO, Oct. 21 /PRNewswire/ -- Advanced Marketing Services, Inc.
(Nasdaq: ADMS), a leading distributor of books and related items to membership
warehouse clubs and other specialty retailers in the U.S., Canada, Mexico and
the U.K. today announced record financial results for the second quarter of
fiscal 2000 ended October 2, 1999.
Net sales for the second quarter of fiscal 2000 rose 25% to $145.2 million
from $116.1 million for the comparable period last year. The growth in second
quarter net sales can be attributed primarily to strong increases in product
shipments within the juvenile, basic, and mass market categories to core
customers, as well as sales to new customers. Net income for the second
quarter of fiscal 2000 increased 31% to $3.0 million from $2.3 million for the
fiscal 1999 second quarter. Diluted earnings per share also increased 31% to
$0.34 compared to $0.26 for the same period last year.
For the six-month period ended October 2, 1999, net sales increased 30% to
$276.0 million from $212.9 million for the comparable period last year. Net
income for the first half of fiscal 2000 increased 39% to $5.5 million
compared to $4.0 million for the same period last year, while diluted earnings
per share increased 38% to $0.62 from $0.45 for the comparable period last
year.
Michael M. Nicita, President and CEO, commented, "We were pleased to
deliver record financial results to our stockholders for the tenth consecutive
quarter. The results of the second quarter are a testament to the strength of
our business model. The robust performance of the warehouse clubs as well as
sales growth with new customers continues to generate steady sales increases.
Highlights of our second quarter included the announcement of the acquisition
of a 25% interest in Raincoast Book Distribution Ltd., a leading Canadian
distributor, to enhance our North American distribution system; and Advanced
Marketing's 57th ranking on Equities Magazine's fastest-growing Nasdaq
companies annual list. We are clearly focused on using our solid financial
position to fund investments that further our strategic initiative of
providing global, customized services to book retailers."
Gross profit as a percent of sales during the second quarter of fiscal
2000 was 11.4%, consistent with the same quarter last year. Gross profit for
the first half of fiscal 2000 decreased to 11.7% from 11.8% from the same
period last year. This decrease was primarily due to increased sales volume
in the best seller and mass market categories, which typically achieve lower
margins and, to a lesser extent, lower margins experienced in the juvenile and
basic categories. In the second quarter of fiscal 2000, our customer return
rate remained relatively comparable at 17% versus 16% for the corresponding
quarter last year.
Distribution and administrative expenses as a percent of sales decreased
to 8.2% during the second quarter of fiscal 2000 from 8.3% for the comparable
quarter last year. While distribution and administrative expenses increased
in absolute dollar amounts, due primarily to the company's continuing
strategic goal to diversify its customer base, increased sales volume and
contributions from the Company's promotional activities reduced the expense
ratio.
Additional information may be obtained via the Internet at the Company's
Web Site ( http://www.advmkt.com ).
Forward-looking statements in this news release are made under the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Certain important factors could cause results to differ materially from those
anticipated by the forward-looking statements, including the impact of changed
economic or business conditions, the impact of competition, the success of
existing and new book releases, continuation of favorable trends associated
with the Company's VMI program, other risk factors inherent in the publishing
and retailing industries, and other factors discussed from time to time in
reports filed by the Company with the Securities and Exchange Commission.
ADVANCED MARKETING SERVICES, INC.
COMPARATIVE FINANCIAL RESULTS
(Unaudited -- amounts in thousands, except per share data)
Statements of Operations
Three Months Ended Six Months Ended
Oct 2, Sept 26, Oct 2, Sept 26,
1999 1998 1999 1998
NET SALES $145,238 $116,054 $276,020 $212,864
Cost of Goods Sold 128,622 102,804 243,761 187,733
GROSS PROFIT 16,616 13,250 32,259 25,131
Distribution and
Administrative
Expenses 11,957 9,652 23,885 19,140
INCOME FROM OPERATIONS 4,659 3,598 8,374 5,991
Interest and Dividend
Income 326 147 697 461
INCOME BEFORE PROVISION
FOR INCOME TAXES 4,985 3,745 9,071 6,452
Provision for Income
Taxes 1,969 1,435 3,583 2,491
NET INCOME $3,016 $2,310 $5,488 $3,961
NET INCOME PER SHARE
(diluted) $0.34 $0.26 $0.62 0.45
SHARES USED IN
CALCULATION 8,899 8,680 8,853 8,684
Condensed Balance Sheets Oct 2, Sept 26,
1999 1998
ASSETS
Cash and Short-term Investments $42,729 $24,614
Accounts Receivable, Net 92,893 75,359
Inventories, Net 141,145 126,462
Other Current Assets 8,437 6,611
Total Current Assets 285,204 233,046
Property & Equipment, Net 8,068 5,601
Goodwill, Net and Other Assets 7,695 9,043
TOTAL ASSETS $300,967 $247,690
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable $203,189 $163,667
Accrued Liabilities 9,456 10,593
Income Taxes Payable 1,539 1,445
Stockholders' Equity 86,783 71,985
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $300,967 $247,690
SOURCE Advanced Marketing Services, Inc.
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Related links:
http://www.advmkt.com
CONTACT:
Susan Fonss, Director of Investor Relations,
858-457-2500, for Advanced Marketing Services, Inc.
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