SOURCE: Synergy Brands, Inc.

August 15, 2005 08:35 ET

Synergy Brands Reports Second Quarter Results

Revenues Increased 24% to $15. 9 Million; Operating Profit Increased 137% to $132,000

SYOSSET, NY -- (MARKET WIRE) -- August 15, 2005 -- Synergy Brands, Inc. (NASDAQ: SYBR) today announced it achieved an operating profit of $131,723 in the second quarter of 2005. For the quarter the Company reported net sales of $15,890,490 a 24% increase as compared to net sales of $12,860,329 for the prior period. The Company's B2B (PHS Group) segment generated an operating profit of $456,000 on $14.8 million in sales as compared to $11,000 of operating profit on $11.25 million in sales for the prior period. The Company reduced its net loss to $280,870 or $.08 per share compared to a net loss of $700,008 or $.34 for the prior period.

For the six months ending June 30, 2005 the Company reported net sales of $30,824,844, a 17.8% increase as compared to net sales of $26,167,512 for the prior period. The Company's B2B segment reported an operating profit of $654,000 on $29.2 million in sales for the six months ended June 30, 2005 as compared to a $220,000 operating profit on $23.4 million of net sales for the prior period. The Company achieved a reduction in the net loss to $973,017 or $.29 per share as compared to $1,157,982 or $.57 per share for the prior period.

The Company continues to improve its operations as it seeks options to optimize its segments. The Company's B2B operation continues to expand its vendor relationships and enter into strategic supply agreements with its customers. The Company's goal is to continue to expand its Metro NY wholesale business through merchandising opportunities that are available through its vendors. The Company's B2C operation plans to open its new facility on September 1, 2005 in Miami, Florida. Through its Cigars Around the World segment, the Company's operation in South Florida hopes to become a retail presence and a destination for cigar lovers. Proset has secured several opportunities that it's building upon in the Salon Hair care and luxury merchandise category for distribution in the United States.

Mair Faibish, president of Synergy Brands, stated that, "Our growth has been controlled by our leverage and we continue to seek opportunities to increase margins in our business segments. At the same time management is seeking strategic opportunities to optimize its shareholder value in its business segments. Our operating segments generated an operating profit of $304,948 before regulatory and corporate expenses for the three months ended June 30, 2005. The Company has invested required compliance costs that are proportionally higher than larger public corporations experience. We will be looking forward to highlight the value of our segments including our 22% stake in Interline Vacations."

The table below highlight's the Company's operating performance for the three months and six months ended June 30, 2005 and June 30, 2004. For full detail please go the Company's filed 10Q.


                              TOTAL                   TOTAL
                            OPERATING     CHANGE  CONSOLIDATED     CHANGE
  6months ended 6/30/05
Revenue                    $30,824,844    17.80%   $30,824,844     17.80%
Gross Profit                $1,987,774    31.14%    $1,987,774     31.14%
SG&A                        $1,554,328    14.94%    $1,843,663      8.52%
Operating Profit
 (loss)                       $258,656  7394.30%     ($103,311)    80.44%
Per Share                        $0.07  4333.08%        ($0.03)    88.65%
Depreciation and
 Amortization                                         $247,422
Net loss                     ($426,594)   31.50%     ($973,017)    15.97%
Per Share                       ($0.12)   60.47%        ($0.29)    49.12%
Interest and
 financing expenses          $670,444      9.23%      $746,412     14.87%
Adjusted Operating
 Income***                                            $144,111    178.64%
Per Share                                                $0.04    145.64%

  6months ended 6/30/04
Revenue                    $26,167,512             $26,167,512
Gross Profit                $1,515,729              $1,515,729
SG&A                        $1,352,309              $1,698,980
Operating Profit (loss)        ($3,546)              ($528,214)
Per Share                       ($0.00)                 ($0.26)
Depreciation and
 Amortization                                         $344,963
Net Profit (loss)            ($622,723)            ($1,157,982)
Per Share                       ($0.30)                 ($0.57)
Interest and
 financing expenses           $613,779                $649,766
Adjusted Operating
 Income (loss)                                       ($183,251)
Per Share                                               ($0.09)


                              TOTAL                   TOTAL
                            OPERATING     CHANGE   CONSOLIDATED    CHANGE
  3months ended 6/30/05
Revenue                    $15,890,490     23.56%  $15,890,490     23.56%
Gross Profit                $1,182,574     69.37%   $1,182,574     69.37%
SG&A                          $791,123      9.93%     $928,032      8.27%
Operating Profit (loss)       $304,948    390.60%     $131,723    136.78%
Per Share                        $0.08    263.88%        $0.04    120.74%
Depreciation and
 Amortization                                      $122,819.00
Net loss                      ($55,984)    87.31%    ($280,870)    59.88%
Per Share                       ($0.01)    95.24%       ($0.08)    76.77%
Interest and
 financing expenses           $353,681      6.74%     $390,101      6.23%
Adjusted Operating
 Income                                               $254,542    260.14%
Per Share                                                $0.07    190.31%

  3months ended 6/30/04
Revenue                    $12,860,329             $12,860,329
Gross Profit                  $698,205                $698,205
SG&A                          $719,661                $857,150
Operating Profit (loss)      ($104,939)              ($358,121)
Per Share                       ($0.05)                 ($0.18)
Depreciation and
 Amortization                                         $199,176
Net Profit (loss)            ($441,182)              ($700,008)
Per Share                       ($0.21)                 ($0.34)
Interest and
 financing expenses           $331,339                $367,221
Adjusted Operating
 Income (loss)                                       ($158,945)
Per Share                                               ($0.08)

   *** Adjusted  operating  income equals operating income added to
 Depreciation and amortization.


Liquidity and Capital Resources

6 months June 30,                  2005          2004

Working Capital                 $3,684,557   $1,922,759     91.63%
Assets                         $18,261,630  $13,041,973     40.02%
Liabilities                    $11,505,957  $10,333,831     11.34%
Equity                           6,755,673   $2,708,142    149.46%
Book Value per share                 $2.01        $1.33     51.04%
Credit Facility                 $5,515,213   $6,196,183    -10.99%

About Synergy Brands

Synergy Brands, Inc. is a holding Company that operates in the wholesale and online distribution of groceries and health and beauty aids (HBA) as well as wholesale and online distribution of premium cigars and salon products through three business segments. It principally focuses on the sale of nationally known brand name consumer products manufactured by major U.S. manufacturers. The consumer products are concentrated within the Grocery and Health & Beauty Aids (HBA industries) as well as the premium cigar business. The Company uses logistics web based programs to optimize its distribution costs on both wholesale and retail levels.

The Company also owns 22 percent of the outstanding common stock of Interline Travel and Tours, Inc. (aka:PERX). PERX provides cruise and resort hotel packages through a proprietary reservation system to airline employees and their retirees. PERX is believed to be the largest Company in this sector of the travel industry. Information on PERX can be found at www.perx.com. The Company believes that its capital investment in this unique travel Company could provide for material future capital appreciation. Synergy Brands does not manage PERX's day-to-day operations. Synergy and PERX have been exploring several opportunities to optimize shareholder value of both companies.

FORWARD LOOKING STATEMENTS

This press release and Company review and assumptions made regarding the financial figures and other information, referenced and presented, state and reflect assumptions, expectations, projections, intentions and/or beliefs about past and future events that are intended as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate to historical or current facts. They use words such as "anticipate," "estimate," "project" "forecast," "may," "will," "should," "expect," "assume," and other deviations thereof and other words of similar meaning. In particular these include, but are not limited to, statements reflecting the projected revenues, earnings, profit and loss of the Company and associated costs. Any or all of the Company's forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. For a description of many of these risks and uncertainties, please refer to the Company's filings with the U.S. Securities & Exchange Commission (www.sec.gov) including Forms 10K and 10Q.

Contact Information

  • Contact:
    Beverly Jedynak
    Martin E. Janis & Company, Inc.
    312-943-1100 ext. 12
    Email Contact

    Amy Ruffalo
    Martin E. Janis & Co., Inc.
    312-943-1100, ext. 15
    Email Contact