Adsouth Partners (PK) (USOTC:ASPR)
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Full-Year 2005 Revenue Exceeds Guidance of $12 Million;
First Quarter 2006 Revenue Will Exceed $5.5 Million;
Adsouth Launches New Subsidiary - Genco Power Solutions
Adsouth Partners, Inc. (OTCBB:ASPR), Chief Executive Officer, John
Cammarano today provided a business update and revenue guidance for
the first quarter 2006.
Since mid 2005, Adsouth has made meaningful progress and our
efforts to refocus the Company are delivering tangible results. Not
only did we deliver significant year over year revenue growth in both
our advertising and product businesses, but we were able to build
scale and reduce the risk or dependencies on any single product or
client. Revenue for full-year 2005 will exceeded our previously
provided guidance of $12 million, compared to revenue of approximately
$3.25 million for full-year 2004. We will report our fourth quarter
and full-year 2005 financial results on March 20, 2006.
As we begin 2006, we are encouraged by our new product
introductions, recent new customers business wins and our commitment
to maintaining our financial discipline. But we continue to be focused
on being a more performance driven, profit driven and efficient
organization in all areas of our business - creative, product
development, financial and operational. We have transitioned the
company from a solid story with a proven business model to a business
that continues to demonstrate growth from year to year, as well as
profitability.
Adsouth has been very active over the last eight months in
developing, pursuing and finalizing numerous new product introductions
and business-building opportunities that we believe will set the
foundation for 2006. Recently, we finalized and are executing some key
product and business introductions and advertising campaigns that have
positioned Adsouth well for future growth.
Adsouth Launches New Subsidiary
Recently, Adsouth formed a new majority-owned subsidiary to enable
Adsouth to enter its first consumer durable product category, power
generation systems. Adsouth will market, sell, install and service
integrated power generator systems to residential homeowners and
commercial business throughout Florida. We are very excited about this
opportunity because it continues to diversify our product portfolio
and leverages Adsouth's direct response advertising, creative
marketing and productions capabilities.
According to the agreement, Adsouth will own 66% of the new
subsidiary and it will operate under the name Genco Power Solutions
(Genco). Genco is currently operating with an experienced team of two
vice presidents, a general manager, 12 sales professionals, as well as
a staff of customer service representatives. The new subsidiary,
Genco, has entered into a non-exclusive distribution agreement with
Wisconsin based Guardian, who will provide the generators.
In just over 10 days of radio advertising Genco has generated more
than 1,000 leads and has booked 12 orders which will begin shipping in
May 2006. We project an average order of $18,500.00 per install with
commercial installations already coming on line. We believe by
integrating Adsouth's direct to consumer and direct response
advertising expertise, with the new team's experience in engineering,
permitting and installation of power generator systems, the Company
can quickly expand this business by meeting the rapidly growing demand
for power generator systems particularly in regions associated with
hurricanes and other severe weather conditions that result in power
outages in Florida.
Advertising Developments
As of today, we are working with several clients on various
campaigns with the goal of building brand awareness and converting
that awareness into acceptance for our client's products or product
line.
After our initial campaign launch in the summer of 2005, our work
with Stacker 2 continues very strong in the first quarter 2006. We
just completed new spots for Stacker 2 products and have launched them
nationally. We use this account as a benchmark for demonstrational
purposes describing how our advertising sector operates. We provide
services over and above traditional advertising firms by analyzing
drug and mass retail sell through data, as well as Wal-Mart retail
link data, to track product sell through. In addition, we build
back-end revenue streams that derive directly from advertising
expenditures, as well as consulting with our clients on how to reach
more consumers through a direct-response marketing platform. Our
marketing strategy is to enable our clients to use direct-response
marketing to effectively reduce their overall advertising expenditure
while reaching more consumers.
We continue to capitalize on the many synergies that are
maintained between our advertising and products sector. On several
occasions Adsouth will cooperate with a client on an even deeper
level. Many companies that have a product or products and originally
come to us as an advertising consulting deal will be funneled to our
products division. These companies may not have the ability to
penetrate the market due to capital restraints, infrastructure issues,
and/or lack of expertise. However, if the product meets the criteria
that we have established in order to build a direct response and
retail campaign, we may obtain marketing rights for the product.
Specific products that have been presented and rolled-out under this
model have been Simon Solutions (Pam Anderson Lip Solution), E70 and
StarMaker Products (Pearl). We are currently negotiating four new
products under this model, although we cannot give assurances that we
will be able to obtain the rights to these products.
Products Developments
Today, Adsouth has twenty proprietary products being marketed and
sold under our master brand DermaFresh, versus only three at the start
of 2005. The company currently distributes products to Wal-Mart, CVS,
Walgreens, Eckerds/Brooks, BJ's, GNC, Ulta, Duane Rheade, Bed Bath,
Linens, Kerr Drug, Kinney Drug, as well as several catalogs and
assorted distributors.
In January 2006, we entered a new fast growing consumer category,
the feminine hygiene category, with the introduction of our Mitsu
Products product line. The Mitsu line, which has been trademarked, was
conceived and created internally by Adsouth and will be marketed and
distributed utilizing the company's existing channels of distribution
under the DermaFresh brand to maximize the opportunity in the
marketplace. This is an emerging category within the mass-market and
since the middle of 2005 has gained a higher level of acceptance at
such outlets as Wal-Mart, CVS, and Walgreens. We believe we can
capitalize on our marketing and merchandising expertise to secure
brand awareness for Mitsu this year. We intend to market this line
aggressively and advertising has already begun with full page print
ads in such trade publications as MMR. The Mitsu products will be
available for shipment in 60 days.
In November, we announced the signing of an exclusive two year
promotional agreement with StarMaker Products, a joint effort between
director and former Happy Days star, Anson Williams and renowned
makeup artist and product developer JoAnna Connell. The agreement
covers a select number of StarMaker's products to be distributed
domestically and internationally under Adsouth's DermaFresh brand. In
early February 2006, it was announced that we secured retail placement
in no less than four major U.S. retailers for StarMaker's first
product Pearl Anti-Wrinkle Moisturizing Mist. We are excited about the
national launch of Pearl Anti-Wrinkle Moisturizing Mist into
approximately 15,000 retail locations throughout the country. Our
relationship with StarMaker Products clearly demonstrates how a full
cycled campaign can successfully work together to drive brand
awareness, while leveraging Adsouth's international retail
distribution infrastructure to increase retail acceptance of this and
other key DermaFresh products. The national advertising campaign has
already initiated with combined Print and TV. The TV spot can be
viewed at http://www.dermafresh.com .
Operational Developments
From an operational perspective, at the end of the third quarter
2005, Adsouth moved into a new facility with over 23,000 square feet
of floor space. The company has just taken additional space next door
to its current facility in order to house the expanded 20 team members
for Genco Power Solutions. This new facility offers Adsouth the
capability to offer complete in-house order fulfillment which now
allows us to modify product configurations via packaging and assemble.
In addition, the new facility gives us the potential to increase the
number of products we can offer and creates new channels of
distribution services. Finally, we now have a full in-house production
capability which will help us manage our production costs in a more
efficient manner.
Financial Developments
In the summer of 2005 we restructured the company in order to
provide Adsouth the financial flexibility needed to execute our growth
strategy. We completed a $2.6 million private placement and eliminated
the unfavorable convertible and long-term debt. As we move into 2006,
we are maintaining our strong financial discipline.
Growth Strategy
Our goal is to build Adsouth into a leader in our business
segments by executing our growth strategy. Adsouth's growth strategy
is to: 1) Increase predictability by building scale, creating new
revenue streams, diversifying the product and client base, expanding
retail shelf space and generate consistent reorder patterns; 2) Expand
product and advertising opportunities by increasing current suite of
DermaFresh Products, developing direct response marketing programs for
new product offerings, acquiring distribution rights for products with
national appeal and winning new and larger national advertising
accounts; and 3) Leverage the company's national retail distribution
infrastructure by utilizing our new fulfillment facility and expanding
retail distribution channels.
First Quarter 2006 Revenue Guidance
At this point, Adsouth believes revenue for the first quarter 2006
will be in excess of $5.5 million compared to $1.7 million in the
first quarter 2005. At this time, this guidance does not reflect any
contribution during the first quarter 2006 from our newly established
subsidiary Genco Power Solutions.
Over the last few quarters we have asked a great deal from our
employees and they have delivered. But there is still work ahead.
However, our team is more committed than ever to being the most
creative, most customer-orientated and most aggressive company in our
industry.
About Adsouth Partners, Inc.
Adsouth Partners is a vertically integrated direct response
marketing company that generates revenues from the placement of
advertising, the production of advertisements, creative advertising
and public relations consulting services. Since mid 2004, it has
expanded its activities as it obtained the rights to products that it
markets and sells to retail outlets. Adsouth Partners, through its
product division DermaFresh, has previously announced shipments to
several of the largest retailers in the country. A complete list is
available on our website at http://www.adsouthinc.com and a preview of
the products offered is available at http://www.dermafresh.com.
Information on our websites and any other websites do not constitute a
part of this press release.
Certain statements in this news release may contain
forward-looking information within the meaning of Rule 175 under the
Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act
of 1934, and are subject to the Safe Harbor created by those rules.
All statements, other than statements of fact, included in this
release, including, without limitation, statements regarding potential
future plans and objectives of the company, are forward-looking
statements that involve risks and uncertainties. There can be no
assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those
anticipated in such statements. Events that may arise could prevent
the implementation of any strategically significant plan(s) outlined
above. The Company cautions that these forward-looking statements are
further qualified by other factors including, but not limited to,
those set forth in the Company's Form 10-KSB filing, its registration
statements and other filings with the United States Securities and
Exchange Commission (available at www.sec.gov). The Company undertakes
no obligation to publicly update or revise any statements in this
release, whether as a result of new information, future events or
otherwise.