SOURCE: Marketing Worldwide Corporation

August 22, 2007 05:00 ET

Marketing Worldwide Reports Financial Performance, Impact of Funding and Acquisition for Third Quarter of 2007

HOWELL, MI--(Marketwire - August 22, 2007) - Marketing Worldwide Corporation (MWW) (OTCBB: MWWC), a leader in car customization programs for major auto manufacturers, today announced that it filed with the SEC its report for the Third Quarter of 2007, which ended June 30, 2007.

The Company is reporting an extraordinary financial quarter in which it concluded a $3.5 million Series A Preferred Stock financing and the acquisition of Colortek, a "Class A" painting facility in Baroda, Michigan. Accordingly, the company recorded larger than normal non-cash and cash expenses and an additional one-time non-cash impairment charge impacting its balance sheet and income statement. Based on these extraordinary charges, net income was reduced by $5,197,641.

"This third quarter of 2007 has been a significant and extraordinary quarter for us," said Michael Winzkowski, President, MWW. "Our financials reflect several large non-cash charges and other one-time increases in expenses that are key investments in expediting MWW's plan to expand our business and produce greater value for our shareholders.

"As announced on April 26, 2007, we concluded a Private Placement for $3.5 million in the form of a Series A Preferred Stock, providing the Company with the required cash to advance the expansion plan for our business.

"In June 2007, in accordance with our strategy for vertical integration, we successfully completed the acquisition of Colortek Inc., a 'Class A' automotive painting facility. The acquisition of Colortek secures one of the most crucial segments in our supply chain and allows us to address additional large OE customers that require strong vertical integration in their certified suppliers. Colortek is already a certified supplier for Ford, Chrysler and GM, and MWW expects that Colortek will add significant additional revenue to MWW in the short and mid term."

The majority of the Company's decrease ($3,500,000) was a non-cash expense associated with the private placement financing and the associated costs for warrants and dividends attached to this financing. The Company recognized an imbedded beneficial conversion feature present in the Convertible Series A Preferred Stock and allocated a portion of the proceeds equal to the fair value of that feature to additional paid-in capital. The Company recognized and measured an aggregate of $3,500,000 of the proceeds, which is equal to the intrinsic value of the imbedded beneficial conversion feature, to additional paid-in capital and a charge against current earnings. The fair value of the warrants was determined using the Black-Scholes Option Pricing Model. In the quarter we also recorded additional expenses, such as placement agent and other professional fees, and an increase in associated legal, auditing and consulting fees in connection with the financing and the acquisition.

As a result of the acquisition of Colortek, management also recorded a non-cash impairment charge of $955,897, net of tax, or $0.08 per share during the three months ended June 30, 2007 to reduce the carrying value of the goodwill to $0. (For more detail, please see our Form 10QSB for the period ended June 30, 2007, filed with the SEC.)

A smaller portion of the decrease resulted from lower sales due to delays in several customer program launches as well as an increase in cost for professional consulting services representing a non-cash expense, and higher selling, general and administrative expenses. These were offset by improvements in gross margins from 27% to 33%.

Mr. Winzkowski concluded, "MWW's strong cash position provides the required capital to execute our business plan and accordingly, we continue to expand our management team and product roster. We have acquired large new customers such as KIA Motors USA and we're aggressively pursuing others. Several new products have been presented for upcoming Toyota model launches and we expect our customers to approve these programs shortly. We believe that the investments of the past quarter position MWW for greater market share in our industry and greater long-term value for our shareholders."

The Company's largest customers are Southeast Toyota, Gulf States Toyota, Toyota Canada International and Toyota Motor Manufacturing Company in Canada. MWW has also begun delivering first products to KIA Motors USA and has been awarded an excellence award for "Most Valuable Supplier" by KIA.

About Marketing Worldwide Corporation

Founded in 1999, MWW is a high quality, full-service OEM supplier for the automotive industry. MWW designs, develops and manufactures high quality (OE-grade) automotive accessory components for high-volume sales directly to the major automobile processing centers at their US entry ports and in Canada, for installation as either Port Installed Options (PIO) or Dealer Installed Options (DIO) programs. The majority of MWW's products are currently being designed and manufactured by MWW for Toyota and KIA passenger cars, SUVs and light trucks. MWW's corporate headquarters is in Howell, Michigan with support teams and satellite offices operating from different parts of the US and Germany. Please visit www.marketingworldwide.us (under construction) to see the latest company news and filings and subscribe to the MWW newsletter, or e-mail your questions to investorrelations@marketingworldwide.us.

                  MARKETING WORLDWIDE CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF INCOME
             FOR THE THREE MONTHS AND NINE MONTHS ENDED
                   JUNE 30, 2007 AND 2006 FOLLOW


                       Three months ended           Nine months ended
                            June 30,                     June 30,
                       2007          2006           2007          2006
                   ------------  ------------   ------------  ------------
Sales, net         $  1,556,379  $  2,381,587   $  5,959,328  $  6,595,329

Cost of sales         1,030,643     1,737,907      4,113,799     4,887,855
                   ------------  ------------   ------------  ------------

Gross profit            525,736       643,680      1,845,529     1,707,474

Operating
 expenses:
Selling, general
 and
 administrative
 expenses             1,125,375       494,532      2,274,386     1,411,144
Financial
 expenses             3,566,167        42,327      3,661,412       106,306
Impairment loss         955,897            --        955,897            --
                   ------------  ------------   ------------  ------------

Total operating
 expenses             5,647,440       536,859      6,891,695     1,517,450

Income (loss)
 from operations     (5,121,703)      106,821     (5,046,166)      190,024

Other income
 (expense), net         (10,795)      (10,736)        (9,558)      (10,332)
                   ------------  ------------   ------------  ------------

Income (loss)
 before provision
 for income taxes    (5,132,498)       96,085     (5,055,724)      179,692

Provision for
 income taxes                --        32,300         12,000        52,430
                   ------------  ------------   ------------  ------------

Income (loss)
 before minority
 interest            (5,132,498)       63,785     (5,067,724)      127,262

Income (loss)
 from minority
 interest                (6,542)       (5,184)       (17,321)      (34,898)
                   ------------  ------------   ------------  ------------

NET INCOME (LOSS)  $ (5,139,040) $     58,601   $ (5,085,045) $     92,364
                   ============  ============   ============  ============

Income (loss) per
 share, basic      $      (0.45) $       0.01   $      (0.45) $       0.01
                   ============  ============   ============  ============

Income (loss) per
 share, fully
 diluted           $      (0.45) $       0.00   $      (0.45) $       0.01
                   ============  ============   ============  ============

Weighted average
 common stock
 outstanding
    Basic            11,363,097    11,051,995     11,358,328    11,051,995
                   ============  ============   ============  ============
    Fully Diluted    11,363,097    12,301,995     11,358,328    12,301,995
                   ============  ============   ============  ============

See the accompanying notes to the unaudited condensed consolidated
financial statements

Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "anticipate," "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to the Company's ability to: (i) obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission, which are available for review at www.sec.gov under "Search for Company Filings."

Pursuant to a September 15, 2006 agreement, Consulting For Strategic Growth1, Ltd. ("CFSG1") provides Marketing Worldwide Corporation with consulting, business advisory, investor relations, public relations and corporate development services. Independent of CFSG1's receipt of cash compensation from MWW, CFSG1 may choose to purchase the company's common stock and thereafter liquidate those securities at any time it deems appropriate to do so.

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