On Dec. 23, Concepts Direct announced that it would begin soliciting buyers for the company, most likely beginning shortly after New Year’s. The decision came just four days after chairman/president/CEO Philip Wiland and his wife submitted an offer to the board of directors to buy the company for $0.68 per share. Longmont, CO-based Concepts Direct mails the Colorful Images, Linda Anderson, Linda Anderson’s Collectibles, Snoopy etc., The Music Stand, and Garfield gifts and stationery catalogs.
The Wilands, according to a company release, “have been invited to participate in the bidding process.” New York-based investment bank Gruppo, Levely & Co. is advising Concepts Direct.
In their letter of intent, the Wilands indicated that they or their affiliates would pay approximately approximately $2.1 million in cash for the roughly 3.1 million shares of Concepts Direct owned by investors. The Wilands already have a 41% stake in the company.
At closing, the Wilands would pay off the principal balance of a promissory note of approximately $1.3 million, plus all accrued interest. A committee is evaluating this offer as part of its evaluation of strategic alternatives for the company.
This has not been a booming year for Concepts Direct. The cataloger has trimmed circulation by more than 10% and faces potential delisting from Nasdaq. In July, it cut 27% of its work force, about 100 employees, because of lower-than-expected sales and higher costs.
Sales for the quarter ended Sept. 30 (its most recent reported) were $10.6 million, down 6% from $11.2 million for the third quarter of year. Worse, the company’s net loss climbed from $856,000 for the third quarter of 2001 to $2.5 million for the third quarter of 2002.