Source Signs Rite Aid to Interactive Communications Network and Front-End Management Contract; Company Closes Aaron Wire & Metal Products Acquisition|
PR Newswire - July 15, 1999 07:17
ST. LOUIS, July 15 /PRNewswire/ -- The Source Information Management Company (Nasdaq: SORC) announced today it has signed a contract with Rite Aid Corporation to use its proprietary Interactive Communications Network (ICN), and to be the exclusive manufacturer and manager of front-end check-out displays for Rite Aid's current front-end display program. Rite Aid is one of the nation's largest retail pharmacy chains with approximately 3,900 drugstores in 30 states and the District of Columbia.
With the signing, the company said it will maintain proprietary data access to approximately 95 percent of the drug-store market, enabling Source to provide valuable detailed sales and marketing data to retailers and their front-end vendors on a chain-by-chain basis.
In addition, the company said the contract stipulates that Source will provide Advance Pay rebate collection and Retail Display Allowance (RDA) consulting to Rite Aid.
Through ICN, magazine publishers, confectionery and general merchandise vendors are able to communicate with retailers on-line, check the status and anticipated renewal dates of check-out fixture programs, obtain detailed and updated store lists, monitor the status of fixture shipments, and observe counts of checkout fixtures by retail chains at store level.
Source Chairman Leslie Flegel said, "This contract exemplifies the wide array of services we offer to our customers. Rite Aid, as a confectionery, mass merchandise and magazine retailer, will integrate products and services from our original base business of display rack manufacturing and front-end management to the internet company we are today through ICN."
"This contract further enhances our ICN customer database that currently includes more than 15 publishing companies covering approximately 1200 magazine titles as well as 150 retailers, including other pharmacies such as Eckerd's and CVS," Flegel said. "Our full-service approach to gather, format and then instantly communicate critical information throughout all phases of front-end marketing and manufacturing makes Source the provider of choice for the nation's top companies seeking optimal sales from the checkout area."
Separately, Source announced it completed the acquisition of Aaron Wire & Metal Products Ltd., a manufacturer of front-end display racks in Richmond, British Columbia, Canada. It signed a letter of intent March 29, 1999. Aaron agreed to be acquired for $2,400,000 Canadian dollars. Source said it anticipates the acquisition will be accretive to earnings in the current fiscal year, ending January 31, 2000.
Last month, Source completed an offering of 4,600,000 shares of common stock, including 1,600,000 shares by selling stockholders, at a price of $13. Net proceeds to the Source have been and will be used to repay outstanding indebtedness, fund the Company's Advance Pay Program and for general corporate purposes, including possible acquisitions. The Company did not receive any proceeds from the sale of 1,600,000 shares of stock by selling stockholders.
Source is a leading provider of information and management services for retail magazine sales to U.S. and Canadian retailers and magazine publishers. Source is also a leading manufacturer of display racks used by retailers at check-out counters. From its base businesses, industry knowledge and relationships with retailers and publishers, Source has developed its ICN website which gives retailers and publishers a forum for communication and e-commerce.
The information contained in this release includes statements regarding matters which are not historical facts (including statements regarding the plans, beliefs or expectations of The Source Information Management Company) which are forward-looking statements within the meaning of the federal securities laws. When used in this press release, the words "believes," "anticipates," "intends," "expects" and similar expressions are intended to identify forward-looking statements. Because such forward-looking statements involve certain risks and uncertainties, the Company's actual results and the timing of certain events could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to the Company's dependence on the marketing and distribution strategies of publishers and other vendors; the Company's ability to access check-out area information; risks associated with the Company's Advance Pay Program, including problems collecting incentive payments from publishers; demand for display racks; the Company's ability to successfully implement its growth strategy; competition; the Company's ability to effectively manage its expansion; and general economic and business conditions nationally, in the Company's markets and its industry. Investors are also directed to consider other risks and uncertainties discussed in other reports previously and subsequently filed by the Company with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
SOURCE Source Information Management Company
/CONTACT: Todd Fromer, IR, or Stan Froelich, Media, both of Stern & Co.,
212-888-0044, for Source Information Management Company/