Synergy Brands Reports Record $56 Million in Revenue for 2004
Net Loss from operations improves by 52% to $0.47 per share
Results of operations:
Highlights:
o B2B revenues grew by 46% to $50.7 million.
o EBITDA from operating segments increased by 68% to $770,000.
o 4th quarter revenues increased by 35% to $16.8 million.
o The company's 21.5% stake in Interline travel and tours (www.perx.com)
recorded $170,000 in net profit for FY 2004.
Melville, NY (date) - Synergy Brands, Inc. (NASDAQ:SYBR) today announced results
for 2004.
For the year ended December 31, 2004, Synergy reported a 40% increase in
revenues to a record $56 million, compared to $40.5 million in 2003. The
company's operating loss narrowed 46 percent in 2004 to $518,105 compared to
$959,796 a year earlier. EBITDA (*) from operations continued to be strong year
over year with $770,373 or $.35 per share in EBITDA results for 2004 as compared
to $458,553 or $.28 per share in 2003, a 68% increase. For the quarter ending
December 31, revenue increased 35% to $16.8 million, with EBITDA from operations
increasing 199% to $44,000.
The Company further owns 21.5% of the outstanding common stock of Interline
Travel and Tours, Inc. (AKA: PERX www.perx.com). PERX provides cruise and resort
hotel packages through a proprietary reservation system to airline employees.
PERX is believed to be the largest Company in this sector of the travel
industry. Information on PERX can be found at www.perx.com. The Company believes
that its capital investment in this unique travel Company may provide for
material future capital appreciation. Synergy Brands does not manage PERX's
day-to day operations. Perx pre-tax profit has grown at a compounded rate of 36%
cumulative since 2002 to $1,069,000 in fiscal year 2004. SYBR's share under the
equity method amounted to $172,224 for fiscal year 2004 after income taxes. SYBR
and PERX have been exploring several opportunities to optimize the shareholder
value of both Companies.
The company's net loss for the year was $2.1 million compared to a net loss of
$1.4 million for prior year. The difference between the results is attributable
to one time gains in FY2003, increased financing costs incurred in connection
with the sales growth in FY2004 and increased corporate regulatory costs in
connection with newly enacted securities legislation. (see segment table). Mair
Faibish, chairman of Synergy Brands, Inc. noted that "We continue to show strong
top line improvement throughout the company. The largest percentage increase was
in the Company's B2B operations." The company's grocery operation continued to
develop additional vendor relationships in the grocery and HBA businesses as
well as expanding its sales in Canada. Although the bulk of the company's
business is in the B2B operations, there were continued gains in the company's
B2C business. Mr. Faibish indicated that "Our gross profit increased by 39% this
past year to almost $3.9 million as compared to $2.8 million a year earlier.
This increase was in direct relationship to the increased sales". As a result,
the company was required to utilize its line of credit to support our account
receivable and inventory growth," he explained. He added: "Although the working
capital needed to support revenue growth is directly related to the growth in
accounts receivable and inventory, the Company has invested in capital assets,
such as warehousing and trucks to widen its gross margins."
Summary:
SUMMARY OF OPERATING SEGMENTS AND SUMMARY CONSOLIDATED RESULTS OF OPERATIONS
OPERATING OPERATING AND
SEGMENTS CHANGE CORPORATE SEGMENTS CHANGE
Y/E 12/31/2004
Revenue 56,705,044 39.87% 56,705,044 39.87%
Gross Profit 3,896,999 38.72% 3,896,999 38.72%
SG&A 3,092,087 17.04% 3,755,614 22.08%
Operating Profit (loss) 442,190 202.03% (518,105) 46.02%
Net loss (1,032,025) -26.22% (2,132,754) -57.37%
Net loss per common share (0.47) (0.97)
Depreciation and amortization 362,722 -39.62% 659,490 -4.79%
Interest income (4,344) -68.53% (4,610) -66.87%
Interest and financing expenses 1,444,020 109.50% 1,553,521 125.14%
------------- -----------
EBITDA 770,373 68.00% 75,647 456.23%
============= ==========
EBITDA net income per share 0.35 0.03
Y/E 12/31/2003
Revenue 40,540,577 40,540,777
Gross Profit 2,809,199 2,809,199
SG&A 2,641,864 3,076,297
Operating Profit (loss) (433,395) (959,796)
Net loss (817,658) (1,355,223)
Net loss per common share (0.49) (0.82)
Depreciation and amortization 600,730 692,698
Interest income (13,805) (13,913)
Interest and financing expenses 689,286 690,038
------------- ----------
EBITDA 458,553 13,600
============= ==========
EBITDA net income per share 0.28 0.01
About Synergy Brands
Synergy Brands, Inc. (http://www.sybr.com) is a holding company that operates in
the wholesale and online distribution of groceries and health & beauty Aid (HBA)
as well as wholesale and online distribution of premium cigars and salon
products through three specific business segments: PHS Group, which distributes
grocery and HBA products to retailers and wholesalers located in the
Northeastern US and Canada; Proset Hair Systems, which distributes Salon Hair
Care products to wholesalers and distributors in the Northeastern part of the US
and three companies within its Business to Consumer (B2C) segment, carried out
through Gran Reserve Corporation. GRC operates Cigars Around the World, a
company that sells premium cigars to restaurants, hotels, casinos, country clubs
and other leisure related destinations; CigarGold.com and Netcigar.com, which
sell premium cigars through the Internet directly to the consumer; and
BeautyBuys.com, which sells salon hair care products directly to the consumer
via the Internet. The company uses logistics web based programs to optimize its
distribution costs on both wholesale and retail levels.
Synergy Brands also owns 21.5 percent of the outstanding common stock of
Interline Travel and Tours, Inc., also known as PERX. PERX provides cruise and
resort hotel packages through a proprietary reservation system to airline
employees and their retirees. PERX is believed to be the largest company in this
sector of the travel industry. More information is available at www.perx.com.
For a complete listing of the company's public filings, please visit
www.sec.gov.
* FORWARD LOOKING STATEMENTS (SAFE HARBOR)
This press release and company review and assumptions made regarding the
financial figures and other information, referenced and presented, state and
reflect assumptions, expectations, projections, intentions and/or beliefs about
past and future events that are intended as "forward-looking statements" under
the Private Securities Litigation Reform Act of 1995. You can identify these
statements by the fact that they do not relate to historical or current facts.
They use words such as "anticipate", "estimate", "project" "forecast', "may",
"will", "should", "expect", "assume", and other deviations thereof and other
words of similar meaning. In particular these include, but are not limited to,
statements reflecting the projected revenues, earnings, profit and loss of the
Company and associated costs. Furthermore, terms such as EBITDA (earnings before
interest, taxes, depreciation & amortization) among others are not terms used
under GAAP and should not be relied upon as such. Any or all of the Company's
forward-looking statements may turn out to be wrong. They can be affected by
inaccurate assumptions or by known or unknown risks and uncertainties. For a
description of many of these risks and uncertainties, please refer to the
company's filings with the U.S. Securities & Exchange Commission (www.sec.gov)
including Forms 10KSB and 10QSB.
Contact: Beverly Jedynak
Martin E. Janis & Company, Inc.
312-943-1100 ext. 12
bjedynak@janispr.com