|
|
| Advanced Marketing Services Reports First Quarter Results |
Reaffirms Full Year EPS Guidance in the $0.90 to $1.05 Range
SAN DIEGO, July 23 /PRNewswire-FirstCall/ -- Advanced Marketing Services,
Inc. (NYSE: MKT), a leading global provider of customized services to book
retailers and publishers, today announced that revenues for the first quarter
of fiscal 2004 totaled $256.6 million, an increase of 34 percent from the
$191.9 million reported for the first quarter of the previous year. During
the quarter ended June 28, 2003, net income was $1.9 million, or $0.10 per
diluted share, down from the $2.4 million, or $0.12 per diluted share,
reported a year earlier.
"Domestically we exceeded our sales expectations for 'Harry Potter and the
Order of the Phoenix' and benefited from the 'halo' effect of increased sales
in other categories that we had predicted based on our analysis of sales
during the weeks subsequent to the release of the last Harry Potter book in
July of 2000," said Michael M. Nicita, president and chief executive officer.
"Our 25 percent equity ownership in Raincoast books, the exclusive publisher
and distributor of the Harry Potter series in Canada, also contributed to our
performance for the quarter. That performance is consistent with our current
annual earnings guidance. In addition, PGW sales for the period were
$29.6 million versus $27.8 million reported for the same period last year."
AMS's overall gross profit as a percentage of net sales during the first
quarter was 13.4 percent, down from 15.3 percent in the first quarter of
fiscal 2002. Gross profit percent on the U.S. core wholesale business
decreased, primarily due to the lower margin on Harry Potter sales and, to a
lesser extent, on higher margin customer returns.
"In the first quarter of fiscal 2004, our worldwide book return rate was
23 percent, down from 24 percent last year. The decrease was a by-product of
strong domestic sales," Nicita added.
Distribution and administrative expenses as a percentage of net sales
decreased to 12.8 percent from 13.5 percent for the comparable quarter in
fiscal 2002. The percentage decrease resulted from the increase in net sales
for the quarter partially offset by increases in payroll, distribution center
labor and freight, and depreciation. Spending for the last phase of the
Company's systems implementation was in line with expectations.
"We synchronized the U.K., Australia and Singapore in the fourth quarter
of Fiscal 2003, and have synchronized The Templar Company, plc and Raincoast
Books in this quarter, having the effect of adding one month of additional
equity ownership in income," added Nicita.
First quarter results were positively impacted by a 10% effective tax rate
primarily due to the following factors related to those international
subsidiaries and affiliates:
* $875,000 in non-taxable equity in income from our affiliates,
Raincoast Books and The Templar Company, plc. This is recognized
after local country tax and not included in the tax rate calculation.
* Reversal of the valuation allowance related to our U.K. subsidiary as
a result of evaluation and confirmation of the recoverability of a
portion of the deferred tax asset.
The international component of the Company's diversification strategy
continues to reap benefits in that it has allowed AMS to post significant
earnings in addition to its domestic activities.
"We are on schedule to complete during our second quarter the final stage
of the systems implementation we began over three years ago," said Charles C.
Tillinghast, chairman of the board. "We intend to begin to drive costs out of
our processes over the next eighteen months, with the overall goal of
positioning AMS to continue to deliver solid future earnings results for our
shareholders.
"We remain confident that we will attain our previously announced earnings
per share guidance for the full fiscal year of 2004, which is in the range of
$0.90 to $1.05 per fully diluted share; however, we would like to remind
everyone that a gradual decrease of certain cost areas throughout fiscal year
2004 will have the disproportional effect of weighting year-over-year profit
growth to the second half of fiscal year 2004," Tillinghast added.
CONFERENCE CALL
Advanced Marketing Services' management will host a conference call to
discuss the operating results for the first quarter ended June 28, 2003, at
11:30 a.m. (Eastern Daylight Time) on July 23, 2003. All shareholders and
other interested persons are encouraged to participate. The conference call
may be accessed by dialing 973-321-1030 ("listen only" mode) just prior to the
scheduled start time. A replay of the call will be available within two hours
following the conference call, through midnight July 28, 2003, by dialing
973-341-3080 (Pin Number: 3712229). The conference call may also be accessed
on a "live" or replay basis through the Advanced Marketing Services' Web site,
http://www.advmkt.com .
ABOUT ADVANCED MARKETING SERVICES, INC.
Headquartered in San Diego, California, Advanced Marketing Services (AMS)
is a leading global provider of customized wholesaling, distribution and
custom publishing services to the book industry. The Company provides a full
range of value-added services that provide AMS's customers with book buying
advice and expert supply chain management, including advertising and
promotional support, to ensure the success of their book programs. AMS'
proprietary Vendor Managed Inventory (VMI) software is a unique tool that
allows its book specialists to efficiently and effectively manage global book
distribution systems for the benefit of its warehouse clubs and bookstore
customers. AMS has extensive operations in the U.S., Canada, Mexico,
Singapore, the United Kingdom and Australia and employs approximately
1,700 people worldwide.
Recent press releases on Advanced Marketing Services, Inc. are available
on both the Company's Website, http://www.advmkt.com , and on PR Newswire,
http://www.prnewswire.com .
Forward-looking statements in this news release are made under the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
All statements other than statements of historical fact are forward-looking
statements that involve risks and uncertainties. Certain important factors
could cause results to differ materially from those anticipated by the
forward-looking statements including factors discussed from time to time in
reports filed by the Company with the Securities and Exchange Commission.
For further information, please contact: investors, Chuck Williams,
Director of Investor Relations of Advanced Marketing Services, Inc.,
+1-858-450-3545, chuckw@advmkt.com; or media, Greg McQuerter, or Tina Wilmott,
twilmott@mcquerter.com, both of The McQuerter Group, +1-858-450-0030,
ext. 140, for Advanced Marketing Services, Inc.
ADVANCED MARKETING SERVICES, INC.
COMPARATIVE FINANCIAL RESULTS
(Unaudited - amounts in thousands, except per share data)
Three Months Ended
Condensed Statements of Operations June 28, June 29,
2003 2002
NET SALES $256,638 $191,855
Cost of Goods Sold 222,239 162,463
GROSS PROFIT 34,399 29,392
Distribution and Administrative Expenses 32,899 25,806
INCOME FROM OPERATIONS 1,500 3,586
Other Income, Net 591 346
INCOME BEFORE PROVISION FOR INCOME TAXES 2,091 3,932
Income Tax Provision 203 1,543
NET INCOME $1,888 $2,389
NET INCOME/(LOSS) PER SHARE (diluted) $0.10 $0.12
SHARES USED IN CALCULATION 19,402 20,182
Condensed Balance Sheets June 28, June 29,
2003 2002
ASSETS
Cash and Short-term Investments $10,001 $13,544
Accounts Receivable, Net 196,343 155,849
Inventories 176,717 143,292
Other Current Assets 10,372 10,763
Total Current Assets 393,433 323,448
Property and Equipment, Net 33,988 33,788
Goodwill and Other Assets 56,652 52,284
TOTAL ASSETS $484,073 $409,520
LIABILITIES AND STOCKHOLDERS' EQUITY
Line of Credit $22,000 $23,000
Accounts Payable 295,464 230,799
Accrued Liabilities 20,345 20,075
Income Taxes Payable 824 1,170
Stockholders' Equity 145,440 134,476
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $484,073 $409,520
SOURCE Advanced Marketing Services, Inc.
back to topRelated links:
CONTACT:
investors, Chuck Williams, Director of
Investor Relations of Advanced Marketing Services, Inc.,
+1-858-450-3545, chuckw@advmkt.com; or media, Greg McQuerter, or
Tina Wilmott, twilmott@mcquerter.com, both of The McQuerter
Group, +1-858-450-0030, ext. 140, for Advanced Marketing
Services, Inc.
