Exhibit 99
[GRAPHIC OMITTED]
news
FOR IMMEDIATE RELEASE
COACTIVE MARKETING GROUP, INC.
- ------------------------------
Charles Tarzian
President and Chief Executive Officer
212-366-3407
COACTIVE MARKETING GROUP, INC.
REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS ENDED
MARCH 31, 2007
New York, NY, June, 2007 - CoActive Marketing Group, Inc. (NASDAQ Capital
Market: CMKG), a full service marketing, sales promotion and interactive
services company reported financial results for its fourth quarter and full year
ended March 31, 2007.
Operating Results - Full Year ended March 31, 2007
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Sales:
For the twelve months ended March 31, 2007, the Company reported sales of $95.9
million, compared to sales of $83.3 million for the twelve months ended March
31, 2006, an increase of 15%.
The Company continues to benefit from the growth in its experiential and sales
promotion programs. In particular, during the first two quarters of fiscal 2007,
the Company executed its first integrated marketing program containing both
experiential and sales promotional elements which generated sales of $6.1
million.
Operating Revenue:
The Company believes that "operating revenue" is a key performance indicator.
Operating revenue is defined as sales, less reimbursable program costs and
expenses and outside production costs and other direct program expenses.
Operating revenue is the net amount derived from sales to customers, which the
Company believes is available to fund its compensation and general and
administrative expenses, debt service and capital expenditures. For the twelve
months ended March 31, 2007, operating revenue amounted to $35 million, compared
to $29 million in Fiscal Year 2006. A calculation of operating revenues is set
forth in the financial tables at the end of this press release.
Operating Results:
The Company reported net income and fully diluted earnings per share of $1
million and $.17 per share, respectively, for the twelve months ended March 31,
2007. This compares to a net loss of $1.8 million and a fully diluted net loss
per share of $.29 for the twelve months ended March 31, 2006. Fiscal Year 2007
operating expenses include $842,000 in employee termination expense associated
with the Company's execution of its turnaround plan.
Balance Sheet Management:
At March 31, 2007, the Company's working capital deficit improved to $3.3
million, compared to a working capital deficit of $6.6 million at March 31,
2006. On June 20, 2007, subsequent to the end of Fiscal 2007, the Company repaid
its remaining obligations owed to its senior lender in the amount of $1,762,000,
which consisted solely of amounts due under a term loan. At the time of the
pay-off, the Company had been in default of certain bank loan covenants. The
Company is in discussions with several lending institutions to obtain revolving
credit financing for working capital purposes. However, there can be no
assurance that the Company will be able to obtain such financing. To the extent
that the Company does not obtain such financing, the Company believes that it
will be able to meet its cash requirements for the foreseeable future with cash
generated from operations.
Summary: Fourth Quarter:
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o Sales
o Fourth quarter 2007 sales decreased 1% compared to
the same period a year ago.
o Fourth quarter 2007 sales were $19.3 million compared
to $19.5 million for the same period a year ago
o Operating Revenue
o Fourth quarter 2007 operating revenue decreased 4%
compared to the same period a year ago.
o Fourth quarter 2007 operating revenue was $ 6.8
million compared to $7.1 million for the same period
a year ago.
o Operating Results
o During the fourth quarter, operating expenses
increased to $8.2 million from $7.8 million a year
ago.
o Net Loss for the fourth quarter was $711,000,
compared to a net loss of $972,000 for the same
period a year ago. Fourth Quarter 2006 net loss was
negatively impacted by an impairment charge of
$626,000 that reduced the carrying value of Optimum
goodwill to zero.
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Company expenses for the fourth quarter ending March 31, 2007 were negatively
impacted by severance expenses for senior and other staff members in connection
with the continuation of turnaround activities and shift in business focus; as
well as increased professional fees related to the Company's restatement of
prior financial statements.
Outlook - Fiscal Year 2008
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Charlie Tarzian, CoActive's President and Chief Executive Officer commented,
"Our goal is to reshape our company as a strategic marketing partner of our
clients by leveraging our strength in events, experiential, promotions and
interactive services with our customer data capture analytics and segmentation.
Previously we operated our divisions as separate service units, generating
revenues from a mix of sustaining clients providing recurring revenue, and
one-off projects. We have moved away from one-off promotion work and are
replacing that revenue with new services for current sustaining clients and new
sustaining clients. The integrated approach helped create momentum for both our
new multi-cultural and CRM/Loyalty practices. Our focus on integrated solutions
with measurable results is starting to bear fruit as we are being awarded
assignments in digital, CRM, Marketing Resource Management (MRM), Loyalty,
branded entertainment and integrated multi-cultural by both current and new
clients."
"There is still work to be done as we redefine ourselves; opting out of lower
margin opportunities and resetting the pipeline to reflect our talent and
capabilities. As a result of the transition to our new model, we will see a
decrease in revenue in our first quarter ending June 30, 2007 versus the first
quarter of the prior year, in which project work represented approximately $1.5
million of our sales. Moreover, our expenses for our first quarter will be
negatively impacted by: (1) an overlap in personnel due to the addition of
senior staff and the phasing out of staff aligned with projects and clients we
are winding down, (2) the impact of shifting from percentage of completion
accounting for certain of our services to completion accounting, and, (3) a
discontinuation of certain programs and products that were non-performing and
had a negative impact on operating margins. As a consequence, we will see a loss
in our first quarter."
Mr. Tarzian concluded, "We are excited with the progress we are making in the
transforming of CoActive into a strategic, integrated consumer experience
company. In just the last few months, we have seen growth opportunities from new
clients as well as continuing organic growth from our existing core clients. As
a result, we expect quarter over quarter revenue growth to resume in our second
quarter ending September 30, 2007 and profitability for the remainder of the
year to be more consistent than in past years."
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
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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 Losses" "Dependence on Key Personnel," "Risks
Associated with Acquisitions," and "Control by Executive Officers and Directors"
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.
-Financial Tables Follow-
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CoActive Marketing Group, Inc.
Consolidated Statements of Operations
Three and Twelve Months Ended
(audited)
Three Months Ended Twelve Months Ended
---------------------------- ----------------------------
March 31, March 31, March 31, March 31,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Sales $ 19,270,000 $ 19,450,000 $ 95,880,000 $ 83,304,000
Operating Income (Loss) (1,409,000) (1,441,000) 1,987,000 (2,680,000)
Income (Loss) from Continuing
Operations before Provision
(Benefit) for Income Taxes (1,395,000) (1,487,000) 1,745,000 (2,917,000)
Provision (Benefit) for Income Taxes 684,000 533,000 572,000 (1,041,000)
------------ ------------ ------------ ------------
Income (Loss) from Continuing
Operations (711,000) (954,000) 1,173,000 (1,876,000)
Discontinued Operations -- (18,000) (177,000) 75,000
------------ ------------ ------------ ------------
Net Income (Loss) (711,000) (972,000) 996,000 (1,801,000)
============ ============ ============ ============
Basic Earnings (Loss) per Share:
Income (Loss) from Continuing
Operations $ (.10) $ (.14) $ .17 $ (.29)
Discontinued Operations -- (.00) (.02) .01
------------ ------------ ------------ ------------
Net Income (Loss) $ (.10) $ (.15) $ .15 $ (.28)
============ ============ ============ ============
Diluted Earnings (Loss) per Share:
Income (Loss) from Continuing
Operations $ (.10) $ (.14) $ .16 $ (.29)
Discontinued Operations -- (.00) (.02) .01
------------ ------------ ------------ ------------
Net Income (Loss) $ (.10) $ (.15) $ .14 $ (.28)
============ ============ ============ ============
Weighted Average Shares Outstanding:
Basic 6,859,751 6,618,951 6,837,533 6,452,847
Diluted 6,859,751 6,618,951 7,283,742 --
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Consolidated Balance Sheet
March 31, March 31,
2007 2006
------------ ------------
(audited) (audited)
Total Assets $ 42,141,000 $ 42,713,000
Current Debt 2,000,000 3,000,000
Total Liabilities 32,085,000 34,137,000
Stockholders' Equity 10,056,000 8,576,000
Operating Revenue Schedule
Three Months Ended Twelve Months Ended
---------------------------- ----------------------------
March 31, March 31, March 31, March 31,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Sales $ 19,270,000 $ 19,450,000 $ 95,880,000 $ 83,304,000
Reimbursable Program 8,305,000 8,020,000 39,888,000 30,180,000
Costs and Expenses
Outside Production and
Other Program Costs 4,166,000 4,409,000 20,983,000 24,024,000
------------ ------------ ------------ ------------
Operating Revenue $ 6,799,000 $ 7,021,000 $ 35,009,000 $ 29,100,000
============ ============ ============ ============
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