Marketing Services Group Inc. has reported preliminary losses of $35 million associated with the discontinuation of its e-mail marketing company WiredEmpire.
The losses include approximately $17 million from operations for the entire fiscal year, approximately $10 million in asset write-downs and approximately $8 million in losses from operations and shutdown costs from July 1 through the estimated disposition of the entity, the company said in a statement.
Net loss to common shareholders after losses for discontinued operations of WiredEmpire and the losses from write-downs of impaired investments was $59.7 million, or $1.99 per share and $75.7 million, or $2.85 per share for the quarter and year ended June 30, 2000, respectively.
Sources close to WiredEmpire said Tuesday that it planned to continue to maintain its existing client base with a skeleton crew while it searched for a buyer. The company said 53 employees were expected to be laid off.
The company has also taken a fourth quarter charge of $27.2 million, which represents unrealized losses from Internet investments made during the fiscal year. The company said it believes such losses are a result of the Internet sector correction this past spring. It added that it has suspended its Internet investment strategy and will focus all efforts on the profitability of its core direct marketing operations.
Marketing Services Group also reported that revenue for the fourth quarter increased 74% to $45 million compared to $25.9 million last year. The increase marks the 15th consecutive quarter of double-digit growth, the company said. That report represented all MSGi Direct operations excluding WiredEmpire and unrealized losses from Internet investment write-downs and included a net loss of $5.7 million, compared $3.9 million one year ago.
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