MWW Automotive Reports Financial Performance, Funding and Acquisitions for Fiscal Year 2007
Market Wire, January, 2008
Marketing Worldwide Corporation (OTCBB: MWWC) ("MWW"), d/b/a/ MWW Automotive , a leader in the design and manufacturing of car customization programs for major auto manufacturers, today announced that it filed with the SEC its annual report for the fiscal year that ended September 30, 2007.
MWW Automotive is reporting an extraordinary year, in which it concluded:
-- The acquisition of Colortek, Inc., a "Class A" painting facility in
Baroda, Michigan.
-- A $3.5 million Series A Preferred Stock financing with Vision Capital
Partners in New York.
-- Receipt of an additional $2 million through the exercise of warrants
by Vision.
-- The opening of a new "Class A" Painting facility serving the
recreational industry in Elkhart, Indiana.
-- The acquisition of Modelworxx GmbH, a leading edge design and
engineering firm, providing design services to BMW in Munich, Germany.
-- The development of several new accessories for our largest customers,
South East Toyota and Gulf States Toyota in the US, Toyota Canada and
Toyota Germany.
-- The development of several programs for KIA USA/Mobis.
These are all major milestones in MWW Automotive's growth strategy. Accordingly, the Company recorded significant one-time non-cash and cash expenses and non-cash impairment charges related to the acquisitions and funding. Based on these extraordinary charges and recognized development cost for four new programs, net loss for the year was $6,896,847 on net sales of $7,454,053, compared to a net income of $305,950 in 2006. However, management improved its gross profit margin from 27% in 2006 to 33% in 2007. This resulted from a greater percentage of sales of higher margin spoiler products in 2007, as well as the Company's ongoing efforts to reduce manufacturing costs.
"The third and fourth quarters of 2007 mark a significant and extraordinary time period in the development of our company," said Michael Winzkowski, President of MWW Automotive. "Based on the unique acquisition opportunities that we took advantage of during 2007 and the non-cash charges associated with our sale of Series A Convertible Preferred Stock, our balance sheet and income statement reflect significant one-time expenses and write-downs. We believe that these actions considerably improved the competitive position of the company in the global marketplace. We have created a solid base of operational capacity and secured the cash required for exceptional future growth that our shareholders expect from us. Management regards the one-time non-cash expenses from the acquisitions and financing as key investments on our path to accelerated business expansion. Moreover, these steps have dramatically improved vertical integration. We believe that our cash position is sufficient for the next twelve months and expect the 2007 acquisitions to have a positive impact on our revenues and cash flow in future periods. The results of these decisions by management are expected to appear in the financial statements beginning with the second quarter of our current fiscal year 2008."
Strong Cash Position
During 2007, MWW concluded a Private Placement for $3.5 million in the form of a Series A Preferred Stock at a fixed price, providing the Company with the required cash to advance the company's expansion plan and provide the cash for additionally required investments into the newly acquired companies. In October of 2007 Vision Capital, the original investor of the Series A Preferred Shares, exercised warrants for $2 Million as part of its original investment, to accommodate any cash expenses associated with the acquisitions and business expansion.
Improving Vertical Integration
-- In June 2007, in accordance with our strategy for improved vertical
integration, we successfully completed the acquisition of Colortek, Inc., a
"Class A" automotive painting facility. This acquisition secured one of the
most crucial and rare segments in our supply chain, allowing us to address
additional large OE customers that require deep vertical integration for
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 midterm.
-- In September of 2007 we began preparations for the opening of our new
Class A painting facility in Elkhart, Indiana, serving a $15 Billion
Recreational Vehicle industry. Subsequent to the release of our annual
report, AutoFX commenced operations and is beginning to generate revenue.
Major Acquisition Expands Market Share
We ended our fiscal year of 2007 with the acquisition of Modelworxx, a leading edge design and engineering company based in Munich, Germany that supplies design services for BMW models and develops and manufactures innovative and high quality accessories for BMW and other European automobile manufacturers. The acquisition of Modelworxx immediately provides MWW with the status of a truly global design and manufacturing firm with deep designing and engineering capabilities and immediate access to profitable North American and European markets. Products designed by Modelworxx will also be sold in the North American markets, while MWW Automotive's US designed products will now have access to the European markets and will be sold through Modelworxx. Modelworxx has already made first shipments to Toyota Germany.
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