FOR IMMEDIATE RELEASE EXHIBIT 99.2
CONTACT: Day Runner, Inc.
Judy Tucker
Vice President, Business Development
714/680-3500, Ext. 3171
Jenifer Kirtland
Director, Investor Relations
714/680-3500, Ext. 3697
DAY RUNNER ANNOUNCES CASH TENDER OFFER FOR FILOFAX
IRVINE, CA, September 24, 1998. Day Runner, Inc. (Nasdaq/DAYR), a marketer
of broad-based personal organizing products to broad consumer audiences through
retail distribution and the leading producer of paper-based organizers for the
U.S. retail market, today announced a cash tender offer for Filofax, a UK-based
company traded on the London Stock Exchange. The offer is for (pound)2.00
(approximately US$3.36) per share for a total of approximately US$80.5 million.
The offer represents a trailing p/e of 13.3 on earnings from continuing
operations and a premium of 42.9% over the September 23rd closing mid-market
price, which represented a trailing p/e of 9.3. The offer has not been
recommended by Filofax's Board of Directors. The proposed acquisition will be
funded by bank debt.
Filofax is a manufacturer and supplier of stationery products, including
Filofax, Lefax and Microfile brand personal organizers. In addition to its core
personal organizer business, Filofax markets business forms and high-end pens.
Filofax has wholly owned sales subsidiaries in France, Germany, Hong Kong,
Scandinavia, the UK and the U.S. and sells primarily through retail distribution
channels in each market. Filofax's sales from continuing operations for fiscal
1998 were (pound)37.7 million (approximately US$63.3 million), with 86%, or
approximately US$54.6 million, to markets outside the U.S.
In commenting on the offer, Day Runner chairman Mark Vidovich stated,
"We're confident that our solid financial position, management depth and the
healthy state of our existing business make this offer a sound and timely move
for Day Runner. We believe that the acquisition of an established presence in a
number of overseas markets combined with our ability to develop brands and build
sales of organizers and other personal organizing products can provide excellent
long-term value to our stockholders."
In discussing the effect of the proposed acquisition on Day Runner's
profitability, Mr. Vidovich said, "Filofax's sales are seasonal, with the six
months from January through June accounting for only approximately 31% of its
fiscal 1998 sales. We do not expect the acquisition to be completed in time to
enjoy the benefit of more than a small part of Filofax's current calendar
year-end busy season. Therefore, we expect the acquisition to be dilutive for
our current fiscal year ending June 30, 1999, but to enhance our earnings for
fiscal 2000."
Commenting on why Day Runner moved forward in the absence of a
recommendation from Filofax's Board, Mr. Vidovich stated, "We believe this offer
provides Filofax's stockholders with an attractive exit. Filofax's sales have
stagnated, growing at a compound annual rate of less than 1% per year since
1996. We believe that the Filofax brand name is gradually becoming devalued and
that reinvigorating this brand will take the kind of marketing and product
development leadership that Day Runner has shown it is able to provide."
Filofax's sales from continuing operations for fiscal 1998 declined 0.7%
to (pound)37.7 million (approximately US$63.3 million), compared with
(pound)37.9 million (approximately US$63.7 million) for fiscal 1997. Excluding a
loss on disposal of a discontinued operation, operating income was (pound)6.1
million (approximately US$10.3 million), up 8% from (pound)5.7 million
(approximately US$9.6 million) for the prior year, and net income before
dividends was (pound)4.3 million (approximately US$7.2 million) for fiscal 1998,
up 9% compared with (pound)4.0 million (approximately US$6.6 million) for fiscal
1997.
Day Runner's sales for the fiscal year ended June 30, 1998 were $167.8
million, up 31.8% from $127.4 million for fiscal 1997. Day Runner reported
fiscal 1998 operating income of $25.6 million, up 32.1% from $19.3 million for
fiscal 1997 and net income of $15.9 million, up 26.8%. A total of $12.2 million,
or 7.3%, of Day Runner's fiscal 1998 sales were to markets outside the U.S.
As is usual under UK takeover practice, the Offer is subject to an
'acceptance condition' to the effect that Day Runner must acquire not less than
90% of the Filofax shares (or such lesser percentage down to 50% as Day Runner
may decide) either through acceptances of the Offer or by purchases outside the
Offer. The Offer will be open for acceptance for a minimum of 20 business days,
although this period may be extended by Day Runner for up to 60 days in total.
The Offer is also subject to anti-trust and other usual conditions that must be
satisfied (unless waived by Day Runner) no later than 21 days after the
acceptance condition is satisfied. Accordingly, the outcome of the Offer is
likely to be determined in Day Runner's fiscal 1999 second quarter ending
December 31, 1998.
With the exception of actual reported financial results and statements of
historical fact, the statements made in this news release or other statements
that may be made about the transaction, including, without limitation the effect
of the acquisition of Filofax on Day Runner's earnings, are forward looking,
reflect Day Runner's current expectations and involve certain risks and
uncertainties. There can be no assurance that the Company's actual future
performance will meet its expectations. As discussed in the Company's fiscal
1997 Annual Report on Form 10-K, the Company's future operating results are
difficult to predict and subject to significant fluctuations. Factors that may
cause future results to differ materially from the Company's current
expectations include, among others: the timing and size of orders from large
customers, timing and size of orders for new products, large customers'
inventory management, competition, general economic conditions, the health of
the retail environment, supply constraints and supplier performance. In
addition, unanticipated events and circumstances may render the acquisition of
Filofax by Day Runner less beneficial than expected, and the differences may be
significant.
Day Runner is a marketer of personal organizing products to broad-based
consumer audiences through retail distribution. The Company is the leading
developer, manufacturer and marketer of paper-based organizers for the U.S.
retail market and also develops, manufactures and markets a number of related
organizing products, including telephone/address books, appointment books,
executive accessories, products for children and students, organizing and other
wall boards and flexible, laminated wall planners, among others. Day Runner's
products are carried by more than 20,000 retail stores across the U.S. and are
available in a number of countries in North America, Europe and the Asia-Pacific
region.
This announcement does not constitute an offer or an invitation to
purchase any securities, directly or indirectly, in Canada, Australia or Japan.
Further, this release is not for distribution in Canada, Australia or Japan.
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Day Runner is a registered trademark of Day Runner, Inc. All other
trademarks remain the property of their respective companies.