Organic Growth and Strategic Acquisitions Expected to Drive 2006 Growth
SPRINGFIELD, TN – April 4, 2006 – Datrek Miller International, Inc. ("DMI") (OTCBB: DMLL), a leading supplier of products and value-added services to the golf industry, reported its year-end results for fiscal 2005.
Revenues for the year ended December 31, 2005 were $26.6 million compared to $9.3 million reported for 2004. The revenue increase in 2005 was due to the integration of the Datrek Professional Bags ("Datrek"), which was acquired in October 2004, into three selling channels, which include Off-Course, On-Course and Premium International OEM. Pro forma revenue for 2005, assuming Datrek was acquired on January 1, 2004, would have been $26.0 million.
Gross profit margin for 2005 was 25.3%, or $6.7 million, as compared to 15.1%, or $1.4 million, in 2004. The gross profit margin improvement in 2005 was due to sale of higher margin products, lower overhead costs as a percentage of revenues, and higher volume across all three sales channels. DMI’s net loss in 2005 was $6.9 million, or $1.21 loss per share, compared to $6.2 million, or $2.86 loss per share, in 2004.
"We worked diligently in 2005 to improve the quality of service we provided our customers by expanding our sales and customer service organizations. We also formed process improvement teams to strengthen our operational infrastructure," said Michael Hedge, Chairman of the Board and Chief Executive Officer of DMI. "We are very optimistic about 2006 and believe that we can continue to expand our sales through our current product lines within new and existing distribution channels. Our management team and systems infrastructure is now robust enough to support strategic acquisitions as the right opportunities present themselves."
"I am pleased with the operational improvements implemented during the latter half of 2005 and continuing into 2006," commented Randy Frapart, DMI’s Chief Financial Officer. "During the first quarter of 2006, we successfully restructured our revolving credit facility, which greatly improved our available credit while lowering our borrowing costs. Our principal shareholder, Stanford International Bank, Ltd., has also made available the framework to increase our equity base in conjunction with acquisitions."
Recent Highlights
During the past year, DMI realized several significant accomplishments in its efforts to execute strategic growth objectives including:
â?¢ The completion of the integration of Miller Golf’s Rockland, Massachusetts-based operation into the Datrek operations located in Springfield, Tennessee.
â?¢ The recruitment and relocation of four new members of DMI’s executive management team including the COO, CFO, and divisional Vice Presidents for the On Course and the Premium International OEM channels.
â?¢ The closing of a transaction establishing a new business venture between DMI and Chatham Plastic Ventures, Inc., DMI’s largest provider of plastic bag tags and accessories. This vertical integration effort will help to ensure the continuing availability of key product components.
â?¢ The creation of a strategic alliance with world-renowned PGA teaching Professional Rob Akins to serve as a spokesperson for the Company and develop a line of golf training aids. This effort will increase product offerings and create further sales channel expansion.
â?¢ The restructuring of the Company’s revolving credit facility, expanding its borrowing base and lowering interest costs.
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Business Outlook
DMI is building a successful business comprised of long standing and loyal customers, top-notch management, and high-quality products and services, and expects to leverage all of these components to become a leader in the golf industry. To achieve its goals in 2006, DMI plans to continue to:
â?¢ Enhance its sales and marketing processes and grow current and future product lines within existing and new customer channels.
â?¢ Increase product offerings through strategic acquisitions and/or alliances.
â?¢ Leverage operational expertise over a broader product offering.
â?¢ Develop a golf events division to gain a portion of the tournament and events market.
â?¢ Make further investments in information technology in order to provide customers, vendors and employees as close to real-time information as possible on a 24 by 7 basis.
The Company believes it is now poised to take advantage of the opportunities and present market conditions within the golf industry to deliver its shareholders considerable financial improvement over the next eighteen months.
About Datrek Miller International, Inc.
Datrek Miller International, Inc. (DMI) is a leading supplier of products and value-added services to the golf industry. For over 50 years, the Company has a history and reputation for designing, manufacturing, marketing, and supplying premium golf accessories including golf bags, travel covers, bag tags, head covers, towels, luggage, and a wide assortment of gifts and awards. DMI services over 7000 points of sale through multiple distribution channels with a wide selection of products and value-added services representing multiple brands within the golf industry.
Contact:
Randall J. Frapart, EVP/CFO
Datrek Miller International
(615) 384-1286
Howard Gostfrand, President
American Capital Ventures, Inc.
305-918-7000
