Synergy Brands reports third quarter results
Three Months ended September 30, 2007
o Reports record Profit 4 cents vs. a loss of 8 cents per share.
o Revenues increased to $20.2 million
o Operating Profit increased by 465% to $962,000
o EBITDA rises by 277% to $1.45 million.
o PHS Group reported record results
Nine Months ended September 30, 2007
o Revenues increase by 21% to $59.6 million
o Operating profit increased nearly 10 fold to $1.9 million
o EBITDA doubled to $2.9 million
o Net profit increased to 3 cents vs. a loss of 27 cents.
Syosset, NY, November 12, 2007 - Synergy Brands, Inc. (NASDAQ:SYBR)
Results of operations for the three months ended September 30, 2007 as
compared to the three months ended September 30, 2006:
Revenues increased by 9% to $20.2 million for the three months ended
September 30, 2007, as compared to $18.6 million for the same period in the
prior year. The largest percentage increase was in the Company's grocery and HBA
operations conducted through its wholly owned subsidiary PHS Group. The
Company's grocery operation continued to develop additional vendor relationships
in the grocery and HBA businesses as well as to expand its Private Label and
Branded programs. Gross profit increased by 122% to $2.9 million for the period
as compared to $1.3 million for the comparable prior period. Operating profit
increased nearly 6 fold to $962,000 as compared to $170,000 in the prior period.
A major contributing factor to the improvement has been the consistent growth of
PHS Group and increased sales of baking mix products to national chains, which
resulted in Synergy Brands reporting a record quarterly net profit of $362,000
as compared to a loss of $442,000 for the comparable period.
Other operations including cigar operations, discontinued operations and
minority interest in travel, accounted for less then 2% of the Company's overall
business. The Company continues to explore strategic opportunities for its
non-core businesses, which include the Cigar operation and minority stake in its
travel business.
PHS GROUP
PHS increased its revenues by 9% to $19.8 million for three months ended
September 30, 2007 as compared to $18 million for the similar period in the
prior year. The increase in PHS business is attributable to the further
development of a private label grocery program designed to sell proprietary
products, more specifically in the baking mix and spice markets, to national
chains located in the United States and Canada, and organic growth in sales to
its customers in the Northeastern Section of the United States. Several PHS
vendors created special packaging with promotional pricing that enabled PHS to
widen its profit margin. The Company utilized special promotions as well as
newly introduced product lines featuring Folgers, Clorox, Kimberley Clark,
Duracell, unique branded ethnic products and Gillette products, among others,
with unique retail display features, that PHS has been able to strongly promote
during FY 2007 as opposed to marketing those products for normal replenishment.
PHS is also developing proprietary packaging for national chains in the baking
mix, prepared foods and spice retail sectors to be displayed in unique
planograms. The Company believes that promotional displays allow PHS to sell
what the Company considers better mixes of product as well as to introduce new
items in combination with regularly stocked items. As long as the Company
maintains or expands its vendor relationships, management believes that it can
continue to improve its operating results.
Operating profit for PHS Group increased to $1.5 million from $592,000
while net profit increased to $1 million from $266,000 for the same period. The
Company has been able to achieve profitability through increased sales and wider
profit margins generated by higher vendor rebates and gross profit generated by
private label sales. The wider profit margins have been achieved through a
diversification of the business from wholesale distribution to direct store
deliveries and co-packing private label baking mixes and spices. PHS has been
able to leverage its warehouse logistics into efficient distribution of private
label products, both domestic and through importation.
Results of operations:
The table below summarizes the results of operations of Synergy Brands Inc.
by operating segments for the nine-month and three months ended September 30,
2007 as compared to the nine months and three months ended September 30, 2006.
PHS Group is the company's largest operating segment and represents Grocery
and HBA operations. B2C represents the Company's retail and online operations,
which include premium cigars and HBA products. The operating data represents the
core performance of the Company without corporate expenses, which include
regulatory cots and financial reporting costs, as well as oversight of the
operating segments.
SEGMENT INFORMATION OF OPERATING
BUSINESSES
TOTAL TOTAL
PHS GROUP CHANGE B2C CHANGE OPERATING CHANGE CONSOLIDATED CHANGE
9 months ended 9/30/07
Revenue $58,354,145 22.28%$1,254,836 -13.19% $59,608,981 21.24% $59,608,981 21.24%
Gross Profit $5,803,742 88.89% $349,777 -20.18% $6,153,519 75.27% $6,153,519 75.27%
SG&A $2,344,320 51.30% $520,293 -3.21% $2,864,613 37.26% $3,949,199 26.15%
Operating Profit (loss) $3,251,541 114.74%($266,129) 22.79% $2,985,412 130.09% $1,894,757 956.17%
Net Profit (loss) from continuing $1,981,926 210.64% $266,316 19.58% $1,715,610 313.11% $263,317 122.91%
operations
Per Share continuing operations $0.23 ($0.03) $0.21 $0.03
Non Cash Charges $207,881 2235.22% $99,790 -19.26% $307,671 132.22% $558,435 18.15%
Financing & Dividend Charges $1,264,120 44.97% $0 $1,264,120 44.97% $1,989,311 27.17%
Income Tax Expense $5,253 100.00% $5,253 100.00% $53,324 21.26%
EBITDA $3,459,180 127.74%($166,526) -67.99% $3,292,654 131.91% $2,864,387 207.55%
Per Share $0.40 ($0.03) $0.37 $0.32
Net loss from discontinued
operations ($32,282) -80.70%
Per share discontinued operations $0.00
Net profit (loss) attributable to
shareholders $231,035 117.54%
Per Share $0.03
9 months ended 9/30/06
Revenue $47,720,070 $1,445,571 $49,165,641 $49,165,641
Gross Profit $3,072,591 $438,189 $3,510,780 $3,510,780
SG&A $1,549,490 $537,574 $2,087,064 $3,130,460
Operating Profit (loss) $1,514,199 ($216,727) $1,297,472 $179,399
Net Profit (loss) from continuing $638,005 ($222,716) $415,289 ($1,149,591)
operations
Per Share continuing operations $0.13 ($0.05) $0.09 ($0.24)
Non Cash Charges $8,902 $123,588 $132,490 $472,641
Financing & Dividend Charges $871,995 $871,995 $1,564,329
Income Tax Expense $43,976
EBITDA $1,518,902 ($99,128) $1,419,774 $931,355
Per Share $0.32
(0.02) $0.30 $0.20
Net loss from discontinued
operations ($167,239)
Per share discontinued operations ($0.03)
Net loss attributable to
shareholders ($1,316,830)
Per Share ($0.27)
SEGMENT INFORMATION OF OPERATING
BUSINESSES
TOTAL TOTAL
PHS GROUP CHANGE B2C CHANGE OPERATING CHANGE CONSOLIDATED CHANGE
3 months ended 9/30/07
Revenue $19,786,826 9.44% $415,039 -21.43% $20,201,865 8.57% $20,201,865 8.57%
Gross Profit $2,755,191 145.88% $111,096 -33.76% $2,866,287 122.49% $2,866,287 122.49%
SG&A $1,062,776 102.14% $172,992 -2.60% $1,235,768 75.69% $1,681,685 56.58%
Operating Profit (loss) $1,491,776 151.96%($81,936) 67.22% $1,409,840 159.61% $961,900 464.56%
Net Profit (loss) from continuing $993,351 $81,927)
operations 273.05%( 57.27% $911,424 325.53% $375,605 212.57%
Per Share continuing operations $0.11 ($0.01) $0.10 $0.04
Non Cash Charges $200,639 7249.41% $20,040 -51.35% $220,679 402.39% $341,344 212.19%
Financing & Dividend Charges $496,057 52.90% $496,057 52.90% $725,751 20.36%
Income Tax Expense $5,253 100.00% $5,253 100.00% $6,106 0.96%
EBITDA $1,695,300 185.67%($61,887) 467.98% $1,633,413 180.39% $1,448,806 276.60%
Per Share $0.18 ($0.01) $0.17 $0.15
Net loss from discontinued
operations ($13,206) -87.81%
Per share discontinued operations $0.00
Net Profit (loss) attributable to
shareholders $362,399 181.99%
Per Share $0.04
3 months ended 9/30/06
Revenue $18,079,537 $528,270 $18,607,807 $18,607,807
Gross Profit $1,120,563 $167,723 $1,288,286 $1,288,286
SG&A $525,773 $177,609 $703,382 $1,074,039
Operating Profit (loss) $592,060 ($49,000) $543,060 $170,380
Net Profit (loss) from continuing $266,278 ($52,092) $214,186 ($333,674)
operations
Per Share continuing operations $0.04 ($0.01) $0.03 ($0.06)
Non Cash Charges $2,730 $41,196 $43,926 $109,340
Financing & Dividend Charges $324,438 $324,438 $602,997
Income Tax Expense $6,048
EBITDA $593,446 ($10,896) $582,550 $384,711
Per Share $0.12 ($0.00) $0.12 $0.07
Net loss from discontinued
operations ($108,306)
Per share discontinued operations ($0.02)
Net loss attributable to
shareholders ($441,980)
Per Share ($0.08)
Synergy Brands Related Links:
For the full 10Q and 10-K filings please visit www.sybr.com, for Cigar
sites visit www.cigargold.com and www.cigarsaroundtheworld.com; for hair care
products visit www.BeautyBuys.com; for Interline Travel visit www.perx.com.
Forward-looking statements:
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 1994. 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", "believe" and other derivations thereof
and other words of similar meaning. In particular these include, but are not
limited to, statements reflecting the projected business activities and goals,
revenues, earnings, non-GAAP measures of operations, profit and loss of the
Company and associated costs. 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 or uncertainties. Comparable GAAP
compliant figures are presented herein to EBITDA numbers stated. For a
description of many of these risks and uncertainties, please refer to the
Company's filings with the U.S. Securities & Exchange Commission (ww.sec.gov)
including Forms 10K and 10Q that can be found at www.sybr.com .
Contact: Beverly Jedynak
Martin E. Janis & Company, Inc.
312-943-1100 ext. 12
bjedynak@janispr.com