Motivational products cataloger Successories will be acquired by S.I. Acquisition LLC and cease being a publicly-traded company. Under the terms of the acquisition, shares of Successories’ common stock not already owned by S.I. Acquisition will be purchased for 30 cents a share, while the company’s preferred stock will be bought for $15 apiece, as well as the value of all uncollected dividends.
John Carroll, the company’s senior vice president, chief operating and financial officer who will act as interim president and chief executive officer, did not return calls at press time. President/CEO Gary Rovansek, also a Successories board member, has resigned.
In announcing the deal, S.I. Acquisition said it won’t fill the vacant board of directors seat previously held by Rovansek, choosing instead to reduce the minimum number of directors from seven to six.
Going private will alleviate the Aurora, IL-based Successories from having to report dismal financial numbers. It reported a net loss of $2.3 million for the quarter ended Aug. 3. That’s an improvement from the $2.8 million the company lost for the second quarter of fiscal 2001.
Net product sales decreased 11%, to $7.2 million from $8.1 million last year. Catalog and Internet sales suffered the smallest sales decline, at less than 2%, following cuts in prospect circulation. Sales to franchises, however, fell 47%, there being 16 fewer franchisee stores in operation than there were a year ago. Sales among the wholesale, joint venture retail, and contract framing divisions tumbled 41% due largely to the company’s decision, made at the end of this year’s first quarter, to discontinue contract framing for third-party products.
For fiscal 2001, Successories suffered a net loss of $10.8 million, compared with net income of $430,000 the previous year. Sales for the year declined 21%, to $43.3 million from $53.3 million. Direct marketing sales fell 18%.