Online Marketing
How we helped a leading Online Marketing provider strengthen its market position and attract strategic interest from the investment community.
Company Background
The “Company” was a pioneer in providing media products, lead generation services, and online marketing tools to their client partners. It also offered membership loyalty, consumer marketing data management, affiliate list management, printing and fulfillment, web/data hosting, and software development services.
Challenge
The Company generated an annual net loss of $4.6 million on revenue of $7.3 million and needed assistance to fully restructure and recapitalize. Its share price was $0.18, market capitalization was approximately $8 million and had negative shareholder equity of ($2.9 million).
The project required:
- A strategic turnaround plan to develop a more efficient operational structure and targeted business focus.
- A new communications strategy to help create awareness and increase shareholder value and share price.
Contributions
- Initiated ‘Company Performance Assessment’ to review and assess all aspects of operations.
- Assisted with development of a strategic turnaround plan by focusing on the Company’s core competency and shedding non-core assets.
- A strategic turnaround plan to develop a more efficient operational structure and targeted business focus.
- Procured new enterprise relationships that directly generated over $600,000 in annual revenue in the first year.
- Initiated discussions that led to outsourcing of the Company’s call center operations, resulting in significant annual cost savings.
- Procured a strategic partnership with a global leader in IT distribution and solutions, considerably expanding the Company’s customer offerings and revenue streams.
- Developed a new communications strategy and renewed investment thesis.
Conclusion
Within one year, the Company’s revenue increased by approximately 300% to over $27.5 million, with net income of $8.7 million. The share price increased to approximately $2.00 per share and market cap of $100 million (and greater the following year). Further, the Company was able to eliminate $3.1 million in debt and increase its shareholder equity to a positive $7.2 million.
Michael Novielli: mnovielli@dutchesscapital.com