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EXHIBIT 99.1
FRIDAY SEPTEMBER 21, 6:02 AM EASTERN TIME
PRESS RELEASE
SOURCE: Daisytek International
DAISYTEK BUSINESS RETURNS TO NORMAL AFTER ATTACKS
INTERNATIONAL SALES UNAFFECTED
U.S. OPERATIONS BACK AFTER DISRUPTION
ALLEN, Texas--(BUSINESS WIRE)--Sept. 21, 2001--Like most U.S. companies,
Daisytek International (Nasdaq:DZTK - news), a $1.2 billion wholesale
distributor of computer supplies and office products and provider of marketing
and demand-generation services, suffered some operational disruptions following
the terrorist attacks in New York City and Washington, D.C. However, the company
has recovered well and is making much progress on its business strategies.
"Along with all Americans, our employees are deeply affected by this disaster,
but to their credit we are back on our feet and are reaching out to help our
customers and friends who were also impacted," said Jim Powell, president and
CEO of Daisytek.
"Daisytek's sales are driven by corporate and consumer use of supplies, which
slowed significantly in the aftermath of the attacks. We experienced a brief
decline in orders for computer supplies, tape media and office products on Sept.
11 and for several days following. The entire country's attention has been
focused on these events, not on normal business activity, but we are pleased
that business has picked up and sales are restored to near-normal levels.
International operations were unaffected," he added.
"Going into the week of Sept. 10, we were basically on track to deliver a
financial performance at or above expectations related to our business metrics.
Unfortunately, lost revenue, disruptions in transportation and communications,
overtime and other costs will now adversely affect results. We estimate earnings
before tax for the current quarter will be lower by $1.5 million to $2 million,"
Powell said.
Daisytek relies heavily on air cargo. When authorities grounded all flights,
Daisytek switched to a ground-transportation plan to deliver its products, which
successfully kept orders moving. Daisytek has resumed its guaranteed
next-business-day delivery of orders following the resumption of air cargo
services by carriers such as FedEx.
"We are very excited about the progress being made at Daisytek. Our team has
confidence in the strategic growth plan, which provides a solid direction for
our company, and we believe that Daisytek is a good, long-term investment
opportunity," Powell said.
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Daisytek's plan for future growth is based on the following:
o Increasing existing product offerings to include a full line of office
products;
o Investing in the development of emerging, higher growth customer
channels, such as drug and grocery chains to increase market share and
grow the customer base;
o Develop new fee-based client services in customer care and demand
generation -- such as those provided by the VirtualDemand division;
o Expand products and services into new international markets; and
o Pursue appropriate acquisitions that support these strategies.
International sales, which make up about one third of Daisytek's business, were
generally unaffected and remain robust. Growth in Daisytek's international
business last quarter was approximately 31% based on local currencies from the
first quarter a year ago, and the company continues to target revenue growth of
15% to 20% outside the United States.
Daisytek has invested in ISA International plc, a 300 million pounds sterling
(approximately US$429 million) IT supplies distributor in Europe. In addition,
ISA indirectly owns approximately 47% of Kingfield Heath Ltd., a U.K. office
products wholesaler with revenue of approximately 206 million pounds sterling
(about US$295 million) last fiscal year. Daisytek also purchased General
Stationery Supplies in Australia, which brings hundreds of new customers and
about 8,000 additional products to Daisytek in that country.
Daisytek has continued to diversify its product line, customer base and
geographic reach. It acquired Ohio-based Digital Storage LLC, broadening
Daisytek's product line to include a wider array of computer media, accessories
and supplies.
The company recently launched a new Peripherals Division that has entered into
agreements with leading providers of accessories for PDAs and other handheld
devices, connectivity products and other items such as Internet video cameras;
mice, trackballs and keyboards; PC audio and telephony products; and interactive
gaming controllers.
Daisytek renewed an agreement as part of its office products expansion with
Business Products Group International, the nation's largest office products and
computer supplies dealer consortium.
While some aspects of the U.S. economy may remain down, Powell pointed out that
consumption of computer supplies and office products is not directly tied to
economic performance or sales of computer hardware. The installed base of
printers, faxes, copiers and other machines ensures continued, vigorous use of
supplies.
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Daisytek's board of directors remains confident in the company's future and
authorized management to proceed with repurchasing the final 175,000 shares of a
previously announced buyback program. The board also authorized an additional
trading window for employees to purchase stock.
"We know these are uncertain times, but Daisytek's business is healthy and we
are very positive about the company's direction. We will be glad to discuss our
plans with anyone with questions or concerns. Please contact us at 800-527-4212
ext. 3420 or email jpowell@Daisytek.com," Powell said.
About Daisytek
Daisytek is a leading wholesale distributor of computer and office supplies and
professional tape products, in addition to providing marketing and
demand-generation services. Daisytek sells its products and services in the
United States, Canada, Australia, Mexico and South America. Daisytek distributes
more than 17,000 nationally known, name-brand computer and office supplies
products and over 2,800 professional tape products from numerous manufacturers.
Daisytek is headquartered in Allen, Texas. This news release and more
information about Daisytek are available at www.daisytek.com. This Web site is
not part of this release. Daisytek is a registered trademark of Daisytek,
Incorporated. All rights reserved.
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 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
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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. 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.
Other factors that could affect Daisytek are set forth in Daisytek's 10-K for
the fiscal year ended March 31, 2001.
Contact:
Daisytek International, Allen
Jim Powell, 972/881-4700
or
Michael A. Burns & Associates
Craig McDaniel, 214/521-8596 or 214/616-7186 (mobile)
cmcdaniel@mbapr.com
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