SOURCE: MERISEL, INC.

Merisel, Inc.

November 16, 2009 16:36 ET

Merisel, Inc. Announces Third Quarter 2009 Results

(In Thousands Except per Share Amounts)

NEW YORK, NY--(Marketwire - November 16, 2009) - Merisel, Inc. (PINKSHEETS: MSEL), a leading provider of visual communications and brand imaging solutions to the consumer products, retail, advertising and entertainment industries, today reported financial results for the third quarter ended September 30, 2009.

The Company reported a loss available to common shareholders of $(2,573) or $(0.36) per share and $(6,411) or $(0.89) per share for the three and nine month periods ended September, 30, 2009, respectively, as compared to a loss of $(424) or $(0.05) per share and $(3,196) or $(0.41) per share for the three and nine month periods ended September 30, 2008, respectively. Revenues for the three and nine months ended September 30, 2009, were $14,921 and $44,400, respectively, as compared to $21,607 and $63,301 for the three and nine months ended September 30, 2008.

Although the recession continues to affect Merisel's revenues and profitability, third quarter revenue of $14,921 was an improvement of $2,544 or 20.6% as compared to revenues of $12,377 in the second quarter. Additionally, the loss available to common shareholders of $(2,573) in the third quarter compares favorably to the second quarter loss of $(3,346), an improvement of $773 or 23.1%.

"The 21% improvement in sequential revenues recognized in the current quarter is a clear indicator that our clients are beginning to re-focus on marketing their brands," stated Mr. Donald R. Uzzi, Chairman and Chief Executive Officer. "While revenues have remained soft, we are seeing indications from our clients that increased spending will continue into the fourth quarter."

Mr. Uzzi further noted that during the third quarter the Company:

--  Successfully entered into a new Credit Agreement with Amalgamated
    Bank, which extended the maturity of its existing credit agreement to
    August 31, 2011.
    
--  Reduced its bank debt by $1,715 and reported a working capital balance
    (current assets less current liabilities) of $15,438 and a current ratio
    (current assets divided by current liabilities) of more than 2.6 to 1.0.
    
--  Implemented the technology plan announced in August 2009, and began
    the upgrade of Merisel's primary production equipment portfolio;
    maintaining its state of the art status.  The upgrade will increase
    production capacity while generating higher quality for our client
    companies.
    
--  Continued to focus on eliminating waste and simplifying production.
    The Company's cost of sales and SG&A expenses both declined as a percentage
    of revenues in the third quarter compared to the second quarter.
    Additionally Merisel will continue to focus on process improvement and cost
    reduction as market conditions continue to improve.
    

Mr. Uzzi noted that the Merisel team has worked diligently to strengthen the Company during this difficult time. "The extension of the bank facility at a time where capital is very tight, coupled with the commitment made to capital equipment this year, positions the Company for sustainable growth as the economy improves. Merisel continues to add to its product offerings and remains receptive to strategic consolidation opportunities as the economy threatens the competition's long term viability."

About Merisel

Merisel, headquartered in New York, N.Y., is a leading visual communications and brand imaging solutions provider to its clients. Merisel provides a broad portfolio of digital and graphic services to clients in the retail, manufacturing, beverage, cosmetic, advertising, entertainment and consumer packaged goods industries. These solutions are delivered to clients through its portfolio companies: ColorEdge, Crush Creative, Comp 24, Dennis Curtin Studios, AdProps, and Fuel Digital. Merisel has sales offices in New York City, Atlanta, Los Angeles and Portland, Oregon, and production facilities in New York, New Jersey, Atlanta and Los Angeles to ensure the highest quality solutions and services to its clients. Learn more at www.merisel.com.

Cautionary Statement

This press release contains forward-looking statements that involve risks and uncertainties concerning Merisel's expectations for future performance (including without limitation the quotations from management in this press release). In this context, forward-looking statements often address Merisel's expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," or "will." Any such forward-looking statements are inherently speculative and are based on currently available information, operating plans and projections about future events and trends. As such, these statements are subject to numerous risks and uncertainties that include, among others, the impact of management and organizational changes, the implementation of ongoing strategic and cost initiatives, changes in and a dependence on key personnel, the outcome of pending legal proceedings, the severity and duration of the current economic conditions and changes in economic conditions. These uncertainties may cause Merisel's actual future results to be materially different than those expressed in such forward-looking statements. All information set forth in this press release is as of November 16, 2009. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of the press release. The Company undertakes no obligation to update any such forward-looking statements. More information about the potential factors that could affect Merisel's business and financial results is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2008 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, which are on file with the SEC and available on the SEC's website at www.sec.gov.

                      MERISEL, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)
                                (Unaudited)



                                    Three Months Ended  Nine Months Ended
                                      September 30,       September 30,
                                    ------------------  ------------------
                                      2009      2008      2009      2008
                                    --------  --------  --------  --------

Net sales                           $ 14,921  $ 21,607  $ 44,400  $ 63,301

Cost of sales                         10,321    11,942    30,159    35,642

                                    --------  --------  --------  --------
Gross profit                           4,600     9,665    14,241    27,659

Selling, general & administrative
 expenses                              7,918     9,359    22,092    30,246

                                    --------  --------  --------  --------
Operating (loss) income               (3,318)      306    (7,851)   (2,587)

Interest expense, net                    105        53       194        78

                                    --------  --------  --------  --------
(Loss) income before (benefit)
 provision for income tax             (3,423)      253    (8,045)   (2,665)

Income tax (benefit) provision        (1,465)      109    (3,443)   (1,140)

                                    --------  --------  --------  --------
Net (loss) income                     (1,958)      144    (4,602)   (1,525)

Preferred stock dividends                615       568     1,809     1,671
                                    --------  --------  --------  --------
Loss available to common
 stockholders                       $ (2,573) $   (424) $ (6,411) $ (3,196)
                                    ========  ========  ========  ========

Loss per share (basic and diluted):
Net loss available to common
 stockholders                       $  (0.36) $  (0.05) $  (0.89) $  (0.41)
Weighted average number of shares
  Basic                                7,186     7,838     7,205     7,865
  Diluted                              7,186     7,987     7,205     7,865

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