MKTG INC Reports Record Operating Revenue for Its Third Quarter Ended December 31, 2013 - kcentv.com - KCEN HD - Waco, Temple, and Killeen

MKTG INC Reports Record Operating Revenue for Its Third Quarter Ended December 31, 2013

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SOURCE MKTG INC

NEW YORK, Feb. 14, 2014 /PRNewswire/ -- MKTG INC (OTC BB: CMKG.OB), a full service marketing agency, today announced its operating results for its third quarter ended December 31, 2013.

Operating Results - Third Quarter, Fiscal 2014

For its third quarter ended December 31, 2013, Operating Revenue increased $1.3 million or 12% to a record high of $11.9 million, compared to $10.6 million for the quarter ended December 31, 2012. Compensation and general and administrative expenses were $11.0 million for the quarter, compared to $9.3 million for the quarter ended December 31, 2012. Operating income for the quarter decreased 29% to $909,000, compared to $1,285,000 for the third quarter of the previous year.  Modified EBITDA for the quarter was $1,165,000, compared to $1,643,000 for the quarter ended December 31, 2012.

Operating Results – Nine Months Ended December 31, 2013

For the nine months ended December 31, 2013, Operating Revenue decreased slightly to $32.2 million, compared to $32.3 million for the nine months ended December 31, 2012. Compensation and general and administrative expenses were $30.3 million for the nine-month period, compared to $28.3 million for the nine months ended December 31, 2012.  Operating income for the period decreased 52% to $1,903,000, compared to $3,962,000 for the nine months ended December 31, 2012.  Modified EBITDA for the period was $2.8 million, compared to $5.0 million for the nine months ended December 31, 2012.

"The board and management are focused on long term growth.  Profitability is down for the nine months due to strategic investments.  The record-breaking Operating Revenue we achieved for the third quarter is evidence of our strong momentum," said Paul Trager, Chief Financial Officer.   

"Increasing demand for our services confirms the appeal of our unique capability to blend live consumer engagement with our proprietary digital functionality and analytics that effectively promote and amplify product awareness and advocacy for our clients," said Charlie Horsey, President and Chief Executive Officer.  Mr. Horsey concluded, "We believe this combination along with our world class creative and production competencies set us apart from our competitors. These capabilities, along with our sustained investment in corporate development and new business are expected to continue to drive domestic and international growth."

Fair Value Adjustment to Compound Embedded Derivatives

The Company's income statements for the periods include accounting adjustments shown below the operating income line.  These are non-cash fair value adjustments to a compound embedded derivative generated from the Company's December 2009 financing.  For the three and nine months ended December 31, 2013, these adjustments amounted to $(90,000) and $963,000, respectively.  For the three and nine months ended December 31, 2012, these adjustments amounted to $755,000 and ($53,000), respectively.  The amount of these adjustments is driven by a number of factors, most importantly, by the value of the Company's stock. As its stock price fluctuates, the Company is required to record adjustments, with increases in stock price reducing net income, and declines in stock price increasing net income.  Consequently, the Company believes it is most appropriate to focus on its operating income as the basis for assessing operating performance.

Operating Revenue and Modified EBITDA

The Company believes Operating Revenue and Modified EBITDA are key performance indicators. The Company defines Operating Revenue as sales less reimbursable program costs and expenses and outside production and other program expenses. Operating Revenue is the net amount derived from sales to customers that management believes is available to fund compensation, general and administrative expenses and capital expenditures. The Company defines Modified EBITDA as income before interest, income taxes, depreciation and amortization plus other non-cash expenses. The Company uses Modified EBITDA as a supplemental measure to evaluate operational performance. Operating Revenue and Modified EBITDA are Non-GAAP financial measures disclosed by management to provide additional information to investors in order to provide them with alternative methods for assessing the Company's financial condition and operating results. These measures are not in accordance with, or a substitute for, GAAP and may be different from or inconsistent with Non-GAAP financial measures used by other companies. Reconciliations of Operating Revenue to sales and Modified EBITDA to operating income are provided at the end of this press release.

About MKTG INC

MKTG INC is a full service marketing agency headquartered in New York with full service offices in San Francisco, Los Angeles, Chicago, Cincinnati and London, England. The Company currently serves a variety of the world's most recognizable brands. Its services include experiential marketing, digital marketing, retail promotions and strategic research and planning. The firm's programs help its clients profitably connect with consumers and create networks of brand advocates to generate brand awareness and higher sales for its customers. For more information, please visit www.mktg.com.

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 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, 2013 under "Risk Factors," and include the risk that projected business opportunities will fail to materialize or will be delayed. The Form 10-K may be obtained by visiting the Company's website or by accessing the database maintained by the Securities and Exchange Commission at http://www.sec.gov.

 

MKTG INC

Consolidated Statements of Operations

For The Three and Nine Months Ended December 31, 2013 and 2012 (Unaudited)










Three Months Ended



Nine Months Ended


 December 31,

 December 31,




2013



2012



2013



2012


Sales

$

40,789,311


$

32,453,829


$

104,981,644


$

100,888,715

Operating revenue

$

11,884,272


$

10,633,351


$

32,242,764


$

32,287,073

Operating income

$

908,661


$

1,285,447


$

1,902,574


$

3,962,265

Income before provision for income taxes

$

818,090


$

2,040,578


$

2,865,725


$

3,909,401

Provision for income taxes

$

362,000


$

504,000


$

758,000


$

1,543,000

Net income

$

456,090


$

1,536,578


$

2,107,725


$

2,366,401













Earnings per share:












Basic

$

0.05


$

0.19


$

0.25


$

0.29

Diluted

$

0.03


$

0.09


$

0.12


$

0.15














 

MKTG INC

Consolidated Balance Sheets

December 31, 2013 and March 31, 2013








December 31,
2013
(Unaudited)


March 31, 2013






Total assets

$

40,511,284

$

40,606,970

Total liabilities

$

24,743,361

$

27,297,244

Preferred stock

$

3,627,671

$

3,132,882

Total stockholders' equity

$

12,140,252

$

10,176,844

 

MKTG INC

Operating Revenue Schedule

For The Three and Nine Months Ended December 31, 2013 and 2012

(Unaudited)









Three Months Ended



Nine Months Ended

 December 31,

  December 31,



2013



2012



2013



2012













Sales

$

40,789,311


$

32,453,829


$

104,981,644


$

100,888,715

Reimbursable program costs and expenses


7,145,820



5,920,169



20,634,923



17,945,614

Outside production and other program expenses


21,759,219



15,900,309



52,103,957



50,656,028

Operating Revenue

$

11,884,272


$

10,633,351


$

32,242,764


$

32,287,073

 

MKTG INC

Modified EBITDA Schedule

For The Three and Nine Months Ended December 31, 2013 and 2012 (Unaudited)









Three Months Ended



Nine Months Ended

 December 31,

 December 31,



2013



2012



2013



2012













Operating income

$

908,661


$

1,285,447


$

1,902,574


$

3,962,265

Depreciation and amortization


166,725



246,620



592,731



730,526

Share based compensation expense


89,744



110,855



287,746



336,584

Modified EBITDA

$

1,165,130


$

1,642,922


$

2,783,051


$

5,029,375

 

 

©2012 PR Newswire. All Rights Reserved.

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