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TORONTO, Nov. 18 /PRNewswire-FirstCall/ - Envoy Communications Group
Inc.s (Envoy) preliminary information indicates that results for fiscal 2005
will substantially meet previously announced earnings guidance of $.28 per
share. Fiscal 2005 results will be released in December after approval by
Envoys Board of Directors.
Looking forward, Envoy believes that there are a number of economic
uncertainties, competitive challenges and business risks that will impact the
client spending commitments of its operating companies. As previously
announced with its third quarter results, Envoy is experiencing price pressure
on its roll out production services in both the UK and North America. Envoy
has recently taken certain efficiency related initiatives, including
outsourcing programs to lower cost centres and concluding strategic alliances
and joint venture arrangements with business partners in new geographic
markets.
As a result of these initiatives, Envoys Board of Directors has approved
the immediate implementation of a restructuring plan. Accordingly, Envoy will
incur a restructuring charge of approximately $1.6 million in the first
quarter of the current fiscal year. The annual savings in salaries, benefits
and other expenses associated with this restructuring is approximately
$3.7 million. Management believes that, by implementing the restructuring plan
now, Envoy will be better positioned to remain profitable, if its clients
historical spending patterns do not materialize in the short term. At the same
time, management will be pro-active in implementing other initiatives to
achieve organic sales growth, reduce operating expenses and improve
efficiencies.
Envoy has strengthened its strategic and creative services, which has
resulted in Envoy winning significant consultation assignments with several of
the largest retailers in North America. Although the company will continue to
provide world-class production roll-out services, it will increase its pursuit
of strategic assignments, as such assignments have the potential to increase
Envoys profit margins in the future.
About Envoy
Envoy Communications Group (NASDAQ: ECGI / TSX:ECG) is an international
consumer and retail branding company with offices throughout North America and
Europe. For more information on Envoy visit http://www.envoy.to.
Cautionary Statement
Certain statements contained in this press release may constitute
"forward-looking statements" within the meaning of Section 21E(i)(1) of the
United States Securities Exchange Act of 1934. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may
cause Envoys actual results to be materially different from any future
results expressed or implied by these statements. Such factors include the
following: general economic and business conditions, changes in demand for
Envoys services, changes in competition, the ability of Envoy to integrate
acquisitions or complete future acquisitions, interest rate fluctuations,
currency exchange rate fluctuations, dependence upon and availability of
qualified personnel and changes in government regulation. In light of these
and other uncertainties, the forward-looking statements included in this press
release should not be regarded as a representation by Envoy that Envoys plans
and objectives will be achieved. These forward-looking statements speak only
as of the date of this press release, and we undertake no obligation to update
or revise the statements.
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