NEWS
FINANCIAL
RELATIONS BOARD
COACTIVE MARKETING GROUP, INC. FINANCIAL RELATIONS BOARD
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Donald A. Bernard Marilynn Meek - General, 212-827-3773
Executive Vice President Susan Garland - Analysts, 212-827-3775
& Chief Financial Officer
516-622-2830
FOR IMMEDIATE RELEASE
COACTIVE MARKETING GROUP, INC. REPORTS
FISCAL THIRD QUARTER 2005 FINANCIAL RESULTS
Great Neck, NY, February 7, 2005 - CoActive Marketing Group, Inc. (Nasdaq
SmallCap: CMKG), an independent full service marketing, sales promotion and
interactive services company, today reported financial results for its fiscal
third quarter ended December 31, 2004.
Third Quarter Performance:
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The Company reported that sales rose 13.0% to $21,554,000 for the quarter,
compared to sales of $19,077,000 for the fiscal third quarter of 2003. Sales for
the third quarter ended December 31, 2004 and December 31, 2003 included
$7,551,000 and $4,850,000 of reimbursable costs and expenses, respectively.
Net income for the quarter was $658,000 or $0.10 per diluted share, compared to
a net loss of ($123,000), or ($0.02) per diluted share, for the comparable
quarter in 2003.
Nine Month Performance:
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For the nine months ended December 31, 2004, the Company reported sales of
$64,180,000, compared to sales of $55,458,000 for the nine month period ended
December 31, 2003. Sales for the nine month periods ended December 31, 2004 and
2003 included reimbursable costs and expenses of $19,118,000 and $13,478,000,
respectively.
Net income for the nine months ended December 31, 2004 was $1,518,000 or $0.24
per diluted share, compared to a net loss of ($1,416,000), or ($0.28) per
diluted share, for the nine months ended December 31, 2003. As result of a
change in accounting policy adopted in fiscal 2004, the Company recorded a
non-cash charge of $2,183,000 in the first quarter of fiscal 2004, reported as a
cumulative effect of a change in accounting principle for revenue recognition.
Excluding this charge, net income for the first nine months of fiscal 2004 would
have been $767,000 or $.12 per diluted share.
Debt Reduction & Cost Savings:
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In addition to improved revenues and earnings for the year, CoActive continued
to reduce its debt during the third quarter. Year to date, its Bank debt has
gone from $5,409,500 to $4,447,000, an 18% reduction.
The Company's consolidation efforts continue to improve its profitability. Next
in a series of orderly steps, CoActive will be moving its headquarters from
Great Neck to the Company's U.S. Concepts offices in New York. As a result of
this consolidation and other structural initiatives, CoActive expects to realize
cost savings of approximately $750,000 in fiscal 2006 and $700,000 in fiscal
2007.
Guidance:
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John Benfield, President of CoActive Marketing Group commented, "Looking
forward, we continue to be encouraged by the increase in our business, both new
and core. Our pipeline of business across all of our divisions is currently
approximately 30% ahead of what it was at this time last year. We expect to
report net earnings per diluted share of approximately $0.04 to $0.06 per share
for our fourth quarter. This estimate in large part reflects the seasonality of
our outdoor oriented event business and fourth quarter softness in the Marketing
Services Group that is anticipated to improve in fiscal 2006 as result of
confirmed pipeline business. Our Interactive, Hispanic, and Event business
groups are demonstrating strength and given our pipeline and current level of
activity, our outlook for fiscal 2006 remains positive."
CoActive Marketing Group, Inc. is a full-service marketing, sales promotion, and
interactive services company that develops and manages integrated marketing,
sales and promotional programs at both national and local levels for consumer
product companies. The programs are geared towards growing incremental sales and
profits by identifying and addressing key trade, sales and consumer trends.
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. Such statements reflect the current views of the
Company with respect to future events based on currently available information
and are subject to risks and uncertainties that could cause actual results to
differ materially from those contemplated in those forward-looking statements.
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, 2004 under "Risk Factors," including but not limited
to "Outstanding Indebtedness; Security Interest," "Need for Additional Funding,"
"Recent Loss," "Dependence on Key Personnel," "Customers," "Unpredictable
Revenue Patterns," "Competition," "Risks Associated with Acquisitions,"
"Expansion Risk," and "Control by Executive Officers and Directors." The Form
10-K may be obtained by accessing the database maintained by the Securities and
Exchange Commission at http://www.sec.gov
Financial Tables to Follow
CoActive Marketing Group, Inc.
Consolidated Statement of Operations
Three and Nine Months Ended
(unaudited)
Three Months Ended Nine Months Ended
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Dec. 31, 2004 Dec. 31, 2003 Dec. 31, 2004 Dec. 31, 2003
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Sales $ 21,553,640 $ 19,076,940 $ 64,179,921 $ 55,458,455
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Operating Income (Loss) 1,487,899 (105,811) 3,126,238 1,510,550
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Income (Loss) before Provision
(Benefit) for Income Taxes,
Minority Interest in Net Income
of Consolidated Subsidiary and
Cumulative Effect of Change in
Accounting Principle for Revenue
Recognition 1,431,658 (165,279) 2,949,045 1,332,381
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Provision (Benefit) for Income Taxes
504,292 (100,216) 1,054,037 516,666
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Net Income (Loss) before Minority
Interest in Net Income of
Consolidated Subsidiary and
Cumulative Effect of Change in
Accounting Principle for Revenue
Recognition 927,366 (65,063) 1,895,008 815,715
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Minority Interest Net Income of
Consolidated Subsidiary (268,978) (58,282) (379,257) (49,009)
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Net Income (Loss) before Cumulative
Effect of Change in Accounting
Principle for Revenue Recognition
658,388 (123,345) 1,515,751 766,706
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Net Income (Loss) $ 658,388 $ (123,345) $ 1,515,751 $ (1,416,108)
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Net Income (Loss) per Common Share
before Cumulative Effect of
Change in Accounting Principle
for Revenue Recognition:
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Basic $ 0.11 $ (0.02) $ 0.26 $ 0.15
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Diluted $ 0.10 $ (0.02) $ 0.24 $ 0.12
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Cumulative Effect of Change in
Accounting Principle for Revenue
Recognition -- -- -- $ (2,182,814)
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Net Income (Loss) per Common Share
after Cumulative Effect of Change
in Accounting Principle for
Revenue Recognition:
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Basic $ 0.11 $ (0.02) $ 0.26 $ (0.28)
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Diluted $ 0.10 $ (0.02) $ 0.24 $ (0.28)
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Weighted Average Shares Outstanding:
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Basic 5,943,255 5,137,179 5,942,324 5,130,925
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Diluted 6,609,114 5,137,179 6,411,603 6,209,464
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Consolidated Balance Sheet
December 31, 2004 March 31, 2004
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(unaudited)
Total Assets $ 39,905,099 $ 40,696,697
Current Debt 4,447,000 1,875,000
Long-Term Debt -- 3,534,500
Total Liabilities 23,192,743 25,518,867
Stockholders' Equity 16,712,356 15,177,830