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NEW YORK, Feb 11, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- CoActive Marketing Group, Inc. (Nasdaq: CMKG), a full-service marketing, sales promotion and interactive services company, reported financial results for its quarter ended December 31, 2007, the third quarter of its 2008 fiscal year.
Charlie Tarzian, CoActive's President and Chief Executive Officer, commented, "Our third quarter of fiscal 2008 reflected the continuing shift in the priority and direction of our business - to integrated marketing programs for major sustaining clients and away from one-off events and promotions. We are already seeing the successful results of this strategy, as measured by the increasing services used by our clients, the growth in revenue from those core clients, and the addition of important new clients with significant growth potential."
Fred Kaseff, CoActive's Chief Financial Officer, added, "Our ability to build more relationship-based business with existing clients, along with promising new business wins, more than offset event seasonality inherent in this quarter. The result was a 12% increase in operating revenue both year- over-year and vs. the trailing quarter ended September 30, 2007, and a jump in earnings per share to $0.11 from $0.01 for last year's third quarter."
Operating Results - Three months and nine months ended December 31, 2007
Sales:
For the three months ended December 31, 2007, the Company reported sales of $24.1 million, compared to sales of $23.9 million for the three months ended December 31, 2006, an increase of $0.2 million. For the nine months ended December 31, 2007, the Company reported sales of $62.4 million, compared to sales of $76.6 million for the nine months ended December 31, 2006, a decrease of $14.2 million, as a result of several significant non-recurring projects in the first half of fiscal 2007 that the Company chose not to pursue in fiscal 2008.
Operating Revenue:
The Company believes that "operating revenue" is a key performance indicator. Operating revenue is defined as sales, less reimbursable and other program costs and. Operating revenue is the net amount derived from sales to customers, which the Company believes is available to fund its compensation, general and administrative expenses, as well as capital expenditures. For the three months ended December 31, 2007, operating revenue amounted to $9.6 million, an increase of $1.0 million over the $8.6 million reported for the three months ended December 31, 2006. For the nine months ended December 31, 2007, operating revenue amounted to $25.9 million, compared to $28.2 million for the nine months ended December 31, 2006. Sequentially, operating revenue increased by $1.0 million over the second quarter ended September 30, 2007.
Net Income and Earnings Per Share:
The Company reported net income and fully diluted earnings per share of $840,000 and $.11 per share, respectively, for the three months ended December 31, 2007. This compares to net income of $88,000 and fully diluted earnings per share of $.01 for the three months ended December 31, 2006. The Company reported net income and fully diluted earnings per share of $1,415,000 and $.19 per share, respectively, for the nine months ended December 31, 2007. This compares to net income of $1,707,000 and fully diluted earnings per share of $.24 for the nine months ended December 31, 2006. The Company's third quarter profitability was adversely impacted by a one-time charge of $296,000 for a separation arrangement with its former Vice Chairman, ending virtually flat against second quarter of fiscal 2008 results of $822,000 net income and fully diluted earnings per share of $.11.
Balance Sheet:
The Company continues to work diligently toward eliminating its working capital deficit. At December 31, 2007, the Company's working capital deficit was $1.4 million, compared to working capital deficits of $3.5 million at June 30, 2007 and $2.5 million at September 30, 2007. During the first quarter ended June 30, 2007, the Company repaid all bank loan obligations. The Company is currently seeking to arrange a new banking facility and is in discussions with several lending institutions for this purpose.
The Company will conduct a conference call at 4:30 p.m. Eastern Standard Time today, Monday, February 11, 2008, to discuss its third quarter results. The call will be hosted by Mr. Tarzian and Mr. Kaseff.
To participate in the call, investors should dial (888) 895-8070 conference id 33867462 ten minutes prior to the scheduled start of the call. An audio-only webcast of the call may be accessed on the Internet at http://www.videonewswire.com/event.asp?id=45755. For investors unable to participate in the live event, an archive of the webcast will be available at http://www.videonewswire.com/event.asp?id=45755 until the end of the month, and a taped replay of the call will be available for one week at (800) 642- 1687, pass code 338674622.
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. Forward-looking statements in this press release are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. These statements are based on management's current expectations and assumptions and are naturally subject to uncertainty and changes in circumstances. We caution you not to place undue reliance upon any such forward-looking statements. Actual results may vary materially from those expressed or implied by the statements herein. 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, 2007 under "Risk Factors," including but not limited to "Internal Control Deficiencies," "Unpredictable Revenue Patterns," "Customers," "Competition," "Need for Additional Funding," "Recent Loss" and "Dependence on Key Personnel," and include the risk that projected business opportunities will fail to materialize or will be delayed. The Form 10-K may be obtained by accessing the database maintained by the Securities and Exchange Commission at http://www.sec.gov.
COACTIVE MARKETING GROUP, INC.
Consolidated Statements of Operations
Three and Nine Months Ended December 31, 2007 and 2006
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
2007 2006 2007 2006
Sales $24,144,613 $23,938,534 $62,384,694 $76,610,354
Operating income 1,284,581 84,160 2,252,666 3,395,467
Income from
continuing
operations before
provision for
income taxes 1,300,018 146,887 2,328,446 3,140,385
Provision for
income taxes 459,958 58,761 913,024 1,256,161
Income from
continuing
operations 840,060 88,126 1,415,422 1,884,224
Loss from
discontinued
operations - - - (176,824)
Net income $840,060 $88,126 $1,415,422 $1,707,400
Basic earnings
per share:
Income from
continuing
operations $.11 $.01 $.19 $.26
Loss from
discontinued
operations - - - (.02)
Net income per
share $.11 $.01 $.19 $.24
Diluted earnings
per share:
Income from
continuing
operations $.11 $.01 $.19 $.26
Loss from
discontinued
operations - - - (.02)
Net income per
share $.11 $.01 $.19 $.24
Weighted average
number of common
shares outstanding:
Basic 7,674,453 7,371,771 7,483,167 7,164,028
Diluted 7,752,372 7,393,458 7,539,634 7,189,392
COACTIVE MARKETING GROUP, INC.
Condensed Consolidated Balance Sheets
December 31, 2007 and March 31, 2007
December 31, March 31,
2007 2007
(Unaudited)
Assets
Current assets $20,939,036 $26,226,130
Property and equipment, net 3,532,113 3,382,968
Deferred tax asset 4,014,414 4,936,414
Goodwill and intangible asset 7,557,203 7,557,203
Other assets 487,608 38,667
Total assets $36,530,374 $42,141,382
Liabilities and Stockholders' Equity
Current liabilities $22,315,953 $29,542,494
Deferred rent 2,443,070 2,542,452
Total liabilities 24,759,023 32,084,946
Total stockholders' equity 11,771,351 10,056,436
Total liabilities and stockholders' equity $36,530,374 $42,141,382
Operating Revenue Schedule
Three and Nine Months Ended December 31, 2007 and 2006
(Unaudited)
Three Months Ended December 31,
2007 % 2006 %
Sales $24,144,613 $23,938,534
Reimbursable and
other program
costs and expenses 14,559,064 15,361,830
Operating Revenue $9,585,549 100 $8,576,704 100
Operating Expense 8,300,968 87 8,492,544 99
Operating Income $1,284,581 13 $84,160 1
Nine Months Ended December 31,
2007 % 2006 %
Sales $62,384,694 $76,610,354
Reimbursable and
other program
costs and expenses 36,454,476 48,399,628
Operating Revenue $25,930,218 100 $28,210,726 100
Operating Expense 23,677,552 91 24,815,259 88
Operating Income $2,252,666 9 $3,395,467 12
Operating Revenue Schedule
Three Months Ended December 31, 2007, September 30, 2007, and June 30, 2007
(Unaudited)
December 31, September 30, June 30,
2007 % 2007 % 2007 %
Operating
Revenue $9,585,549 100 $8,530,765 100 $7,813,904 100
Operating
Expense 8,300,968 87 7,181,282 84 8,173,126 105
Operating
Income (Loss) $1,284,581 13 $1,349,483 16 ($359,222) (5)
SOURCE CoActive Marketing Group, Inc.