Wednesday August 14, 4:11 pm Eastern
Time
Press Release
SOURCE: Janel World Trade, Ltd.
Janel World Trade, Ltd. Announces
Its Third Quarter Financial Results, Projects Significant Revenue Growth
in Fiscal 2003
JAMAICA, N.Y.--(BUSINESS WIRE)--Aug.
14, 2002--Janel World Trade, Ltd., (Nasdaq OTCBB: JLWT - News) today reported
financial results for its fiscal third quarter and nine months ended June
30, 2002. In addition, the company's chief executive officer outlined Janel's
growth strategy and revenue expectations for fiscal 2003.
Highlights:
-
As previously reported, the company
completed its reverse merger transaction with Wine Systems Design, Inc.,
whereby the new entity formally changed its name to Janel World Trade,
Ltd. and commenced trading on the Nasdaq Bulletin Board under the symbol
"JLWT."
-
Net income of $43,412 in Q3 2002 was
up 159% from $16,766 in Q3 2001.
-
Income before taxes in Q3 2002 rose
160% to $66,912 from $25,766 in Q3 2001. This represented a year-over-year
increase of 325 basis points in the company's pretax profit margin on net
revenue (total revenues less forwarding expenses).
-
Total company SG&A as a percentage
of sales declined by 125 basis points year-over-year to 11.20% in 3Q 2002
versus 12.45% in 3Q 2001.
-
The company projected revenues of $42-$44
million for its fiscal year 2002 ending September 30th.
The company discussed specific elements
of its growth strategy for next year and beyond, the successful execution
of which would be expected to produce significantly higher gross revenues
that may approximate $80 million in 2003.
Third Quarter Results
Janel World Trade, Ltd. reported
net income of $43,412 for its fiscal third quarter ended June 30, 2002,
a jump of 159% as compared to net earnings of $16,766 earned by the company
in the third quarter of fiscal 2001. In addition, the most recent quarter's
net income reflects an increase in Janel's net profit margin (net income
as a percent of net revenues) of 211 basis points to 3.21% from 1.10% in
the third quarter of fiscal 2001. The company achieved the increase in
earnings and profit margin despite the fact that its total revenues for
the 2002 third quarter fell year-over-year by $522,300, or 4.4%, to $11,457,309.
The lower revenues were primarily due to the general decline in international
trade following the events of September 11, 2001.
For the 2002 third quarter, forwarding
expenses decreased by $351,123, or 3.4%, to $10,103,182 as compared to
$10,454,305 a year earlier. The decline was consistent with the lower level
of forwarding revenues year-over-year. Forwarding expenses consist primarily
of the fees paid by Janel directly to cargo carriers to transport its freight
shipments between terminal points on behalf of its customers, and also
includes any duties and/or trucking charges related to the shipments. The
company's profitability was additionally enhanced by a lower level of SG&A
expenses, which fell year-over-year by $205,467, or 14.5%, to $1,209,427
in 3Q 2002. As a percentage of revenues, quarterly SG&A expense in
the third quarter of fiscal 2002 declined 125 basis points to 11.20% as
compared to 12.45% in 2001.
Primarily as a result of the proportionately
greater year-over-year declines in forwarding and SG&A expenses relative
to the decline in revenues, Janel's income before taxes rose 160% to $66,912
in the third quarter of fiscal 2002 from $25,766 a year earlier. Despite
the modest decline in third quarter revenues, the company's pretax profit
margin on net revenue (total revenues less forwarding expenses) increased
by 325 basis points to 4.94% in third quarter fiscal 2002 from 1.69% in
the 2001 period.
Nine Months Results
Total nine-month gross revenues declined
13.4% year-over-year to $31,008,594 mainly due to an industrywide slowdown
in the wake of the events of September 11, 2001. Despite the fall-off in
revenues, Janel's year-to-date 2002 net earnings rose slightly to $64,350
versus $63,179 in 2001, and the company's net profit margin increased by
15 basis points to 1.58% in the current year from 1.43% in 2001.
As in the third quarter, year-over-year
declines for the nine months in both forwarding expenses and SG&A by
14.1% and 8.3%, respectively, more than offset the effect of lower gross
revenues. As a result, income before taxes actually rose 1.7% to $98,850
in 2002 as compared to $97,179 in the first nine months of fiscal 2001.
The slightly higher net earnings also represented an increase in the company's
nine-month pretax profit margin (as a percentage of net revenue) by 24
basis points from 2.19% in 2001 to 2.43% in 2002.
Review and Outlook
James N. Jannello, the company's
executive vice president and chief executive officer, stated, "Given the
overall relative softness of the freight industry in the wake of last September
11th, we are quite pleased to be able to show significant increases in
our third quarter and year-to-date bottom-line results as part of our first-ever
earnings release as a newly public company. We plan to continue building
on this strong beginning for the rest of this current fiscal year and as
we look ahead to fiscal 2003 as well. Combined with our results for the
first nine months, we expect a profitable fourth quarter with our full-year
fiscal 2002 revenues up to the $42-$44 million range."
Jannello continued, "More importantly,
however, we are moving ahead with the ambitious long-range strategy that
we have mapped out for growing the company's revenues and profitability.
To be more specific, we have plans for additional branch offices both domestically
and in Southeast Asia; additional revenue streams for our headquarters
and existing branch locations; discussions and due diligence with privately
held transportation-related firms which may ultimately lead to their acquisition
by the company; expansion of our existing sales force by hiring additional
commission-only sales representatives with established customer bases;
increasing our focus on growing revenues related to export activities;
initiating work within the next six months on a substantial telecom transportation
project to Southeast Asia for which Janel has been designated the exclusive
freight forwarder; evaluating direct entry into the trucking and warehouse
distribution business as a complement to the services we already provide
to existing customers; and continuing to reduce our overhead and operating
expenses, particularly with regard to the integration of any additional
offices or acquisitions. Assuming successful execution of substantial elements
of our strategy, we project that Janel's gross revenues for fiscal 2003
will be significantly greater than projected gross revenues for fiscal
2002, and may approximate $80 million for the year."
Jannello concluded, "Clearly we believe
that there are substantial opportunities available for Janel World Trade
to move ahead. The company is led by a stable, highly experienced and motivated
management team that has produced a track record of growth over the past
27 years. We are committed to continuing as we have begun and are very
enthusiastic over the prospects we see for the company going forward."
About Janel World Trade, Ltd.
Janel World Trade, Ltd. (OTCBB: JLWT
- News) is a global provider of integrated logistics services, including
domestic and international freight forwarding via multi-modal carriers,
customs brokerage, warehousing and distribution and other transportation-related
services. Additional information on Janel World Trade is available on the
Internet at www.janelgroup.com or www.janelgroup.net.
Forward-Looking Statements
The statements contained in this
release that are not historical facts are forward-looking statements (as
such term is defined in the Private Securities Litigation Act of 1995).
Actual results may differ materially from those anticipated or implied
in the forward-looking statements. These forward-looking statements involve
risks and uncertainties, including competitive factors and pricing and
supply pressures; the Company's dependence upon conditions in the air,
ocean and land-based freight forwarding industry; the size and resources
of many of the Company's competitors; and the need for the Company to effectively
integrate acquired businesses and to successfully deliver its primary services.
Additional information with respect to these and other factors that could
materially affect the Company is included in the Company's filings with
the Securities and Exchange Commission, including its most recent Form
8-K/A and Form 10-Q filings.
JANEL WORLD TRADE, LTD.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Nine months ended Three months ended
June 30,
June 30,
------------------ ------------------
2002 2001
2002 2001
------ ------
------ ------
Revenues:
Forwarding revenue
$30,999,567 $35,755,567 $11,456,431 $11,972,445
Interest and dividends
9,027 33,399
878 7,164
---------- ---------- ---------- ----------
31,008,594 35,788,966 11,457,309 11,979,609
Costs and expenses:
Forwarding expenses
26,940,160 31,356,924 10,103,182 10,454,305
Selling, general and
administrative
expenses 3,953,251 4,309,262 1,283,417
1,491,234
Interest
16,333 25,601
3,798 8,304
---------- ---------- ---------- ----------
Total costs and
expenses
30,909,744 35,691,787 11,390,397 11,953,843
Income before income
taxes
98,850 97,179
66,912 25,766
Income taxes
34,500 34,000
23,500 9,000
---------- ---------- ---------- ----------
Net income
$ 64,350 $ 63,179 $ 43,412
$ 16,766
========== ========== ========== ==========
Other comprehensive
income (loss),
net
of tax
$ 1,322 $ (18,933) $ (3,064)
$ 3,059
---------- ---------- ---------- ----------
Basic and diluted
earnings per share
$ .00429 N/A
$ .00289 N/A
==========
==========
Weighted number of
shares outstanding(a)
15,000,000 N/A 15,000,000
N/A
==========
==========
(a) Assumes all
shares were outstanding for the entire periods
JANEL WORLD TRADE, LTD.
CONSOLIDATED BALANCE SHEETS
June 30, 2002 September 30, 2001
------------- ------------------
(Unaudited)
(Audited)
ASSETS
Current Assets:
Cash
$ 950,008 $1,429,082
Accounts receivable
3,262,190 2,738,513
Marketable securities
39,536
37,592
Loans receivable - officers
192,766
138,837
- other
10,858
20,682
Prepaid expenses and
other
188,865
108,739
--------- ---------
Total
Current Assets
4,644,223 4,473,445
--------- ---------
Property and equipment,
net 126,123
165,805
--------- ---------
Other Assets:
Cash surrender value
of life
insurance
44,469
44,469
Security deposits
48,458
48,651
--------- ---------
Total
Other Assets
92,927
93,120
--------- ---------
Total
Assets
$4,863,273 $4,732,370
========= =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Note payable - bank
$ 300,000 $
325,000
Accounts payable
2,036,191 1,833,782
Accrued expenses and
taxes payable 128,232
169,234
Current portion of long-term
debt 28,457
80,924
--------- ---------
Total
Current Liabilities 2,492,880
2,408,940
--------- ---------
Other Liabilities:
Deferred compensation
123,037
123,037
Long-term debt
11,873
30,582
--------- ---------
Total
Other Liabilities
134,910
153,619
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, $.001
par value,
225,000,000 shares
authorized;
15,000,000 shares
issued and
outstanding at
June 30, 2002 15,000
3,200
Additional paid-in capital
217,087
228,887
Retained earnings
2,003,396 1,937,724
--------- ---------
Total
Stockholders' Equity 2,235,483
2,169,811
--------- ---------
Total
Liabilities and
Stockholders' Equity $4,863,273
$4,732,370
==========
==========
--------------------------------------------------------------------------------
Contact:
Janel World
Trade, Ltd.
Jay Jacobson,
914/722-2737
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