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EXHIBIT 99.1
TUESDAY APRIL 3, 7:15 AM EASTERN TIME
PRESS RELEASE
DAISYTEK TO ACQUIRE MEMPHIS `SUPERHUB' FROM PFSWEB
DEAL SUPPORTS WHOLESALER'S U.S. BUSINESS STRATEGIES
CEO REITERATES 10% - 15% REVENUE GROWTH TARGETS FOR COMING YEAR
ALLEN, Texas--(BUSINESS WIRE)--April 3, 2001--Daisytek International Corporation
(Nasdaq:DZTK - news) has signed a nonbinding letter of intent with PFSweb, Inc.
(Nasdaq:PFSW - news) to acquire the distribution center used to provide
distribution and fulfillment services to Daisytek, located in Memphis, Tenn.
This transaction accelerates plans to separate business operations and functions
of the two companies.
Under terms of the agreement, Daisytek will acquire certain distribution and
fulfillment assets, hire related PFSweb employees and assume certain leases.
Additionally, Daisytek is transitioning information technology services to its
own platform and will enter into a short-term IT and transition services fee
agreement with PFSweb. The companies will agree to terminate existing
transaction management services agreements, thus enabling Daisytek to regain
complete control of its core U.S. supplies business.
Terms of the deal have yet to be finalized, but the transaction is expected to
be in excess of $10 million. The transaction is expected to close in May, and is
subject to a definitive agreement; the completion of due diligence; receipt from
the IRS of a supplemental private letter ruling that the contemplated asset
purchase transaction does not adversely affect any of the rulings set forth in
the private letter ruling received last June relating to the spin-off of PFSweb
and approval from the board of directors of each company. Company officials said
the transaction is projected to be accretive in earnings per share in future
quarters and is projected to improve Daisytek's return on invested capital.
Last July, Daisytek spun-off its PFSweb subsidiary as a separately operated,
publicly traded company, but remained a PFSweb customer. In connection with the
previous IPO and spin-off, PFSweb acquired the original distribution complex in
Memphis developed and operated by Daisytek. In this transaction, Daisytek will
acquire the approximately 400,000-square-foot "Superhub" operation, which
includes the necessary infrastructure to manage customer service and fulfillment
operations for its U.S. computer and office supplies business.
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Recently, Daisytek, a $1.2 billion wholesale distributor of computer and office
supplies, announced a new distribution strategy designed around several regional
hubs, the first of which will be the Memphis Superhub. The decision to move to a
regional distribution network is a result of Daisytek's strategy to offer a full
range of office supplies to its nationwide customer base. Rollout of the
national program to integrate delivery of computer consumables and office
supplies has begun and is expected to be a key driver of Daisytek's revenue
growth projections of between 10 percent and 15 percent in the 2002 fiscal year.
"The planned expansion of our product lines and customer base has driven the
need to add distribution capacity. The first step in that process is acquiring
part of the PFSweb facility that was designed to serve Daisytek," said Jim
Powell, Daisytek's president and CEO.
"By controlling our own distribution operations, something Daisytek has excelled
at for many years, we intend to remain the low-cost distributor and continue to
provide our customers with the outstanding, next-business-day delivery service
they expect. This agreement supports the company's long-term growth prospects by
balancing fill rates, order cycle times and costs."
Daisytek expanded its product line to include a line of traditional office
supplies when it acquired an office products wholesaler last year. This
acquisition added thousands of new customers and increased the company's product
offering to more than 20,000 items, which now includes computer supplies, office
supplies and recordable media.
"Daisytek is on track to achieve the targets we set for FY 2001, and we are
optimistic that the company will reach higher operating performance levels in FY
2002. Despite economic uncertainty, Daisytek continues to meet expectations and
for the fiscal year ended March 31, 2001, the company expects revenues to be 10
percent to 11 percent greater than last fiscal year and earnings per share to be
in the range of $0.97 to $1.02. Overall revenue growth for FY 2002 is forecasted
at between 10 percent and 15 percent over this year," Powell said.
Daisytek will hold a conference call today at 10 a.m. Central Time. To
participate, dial 801/303-7410. A Webcast of the call will also be available at
www.daisytek.com. A recorded playback can be heard for 14 days at 402/220-1490.
The playback code is 1170.
About Daisytek
Daisytek is a leading distributor of computer supplies, office products, and
recordable media. Serving customers in more than 50 countries, Daisytek
distributes almost 20,000 products from more than 150 manufacturers. Daisytek is
headquartered in Allen, Texas, and maintains sales and distribution centers in
the United States, Argentina, Australia, Canada and Mexico. Daisytek is a
registered trademark of Daisytek, Incorporated. All rights reserved. This news
release and more information about Daisytek are available at www.daisytek.com.
The matters discussed in this news release contain both historical and
forward-looking statements. All statements other than statements of historical
fact are, or may be deemed to be, forward-looking information within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Act of 1934, as amended. You can identify these statements by the
fact that they do not relate strictly to historical or current facts, but rather
reflect our current expectations concerning future results and events.
Forward-looking statements relating to such matters as our financial condition
and operations, including forecasted information, are based on our management's
current intent, belief or expectations regarding our industry or us. These
forward-looking statements including forecasts are not
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guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. In addition, some forward-looking
statements are based upon assumptions as to future events that may not prove to
be accurate. Therefore, actual outcomes and results may differ materially from
what is expected or forecasted in such forward-looking statements. We undertake
no obligation to update publicly any forward-looking statement for any reason,
even if new information becomes available or other events occur in the future.
Certain factors, including but not limited to, general economic conditions,
industry trends, the loss of key suppliers or customers, the loss of strategic
product shipping relationships, customer demand, product availability,
competition (including pricing and availability), risks inherent in acquiring,
integrating and operating new businesses, concentrations of credit risk,
distribution efficiencies, capacity constraints, technological difficulties,
exchange rate fluctuations, and the regulatory and trade environment (both
domestic and foreign) could cause our actual results to differ materially from
the anticipated results or other expectations expressed in our forward-looking
statements. Additional factors that could cause or contribute to such
differences include, but are not limited to, risks relating to the completion of
the contemplated transaction, including the risk that required regulatory
clearances or Board of Director approval might not be obtained at all. In
addition, statements in this press release relating to the expected benefits of
the contemplated transaction are subject to risks relating to the timing and
successful completion of transitioning certain information technology,
integration of the acquired assets into Daisytek's operations, unanticipated
expenditures and changing relationships with customers, suppliers and strategic
partners. There may be additional risks that we do not currently view as
material or that are not presently known.
A description of certain of these factors, as well as other factors which could
affect Daisytek, is set forth in Daisytek's 10-K for the fiscal year ended March
31, 2000.
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Contact:
Daisytek International
Jim Powell, 972/881-4700
or
Michael A. Burns & Associates
Craig McDaniel, APR, 214/521-8596
Mobile: 214/616-7186
cmcdaniel@mbapr.com