GenesisIntermedia Inc., a direct marketing company whose main business lines are direct sales and marketing of consumer products, said yesterday that it is evaluating several potential acquisitions after securing a $100 million conditional credit commitment from financier Carl Icahn's Riverdale LLC in early July.
“We are seeking to acquire businesses that build upon our core competencies, strengthen our business mix and enhance our objectives of profitability and value building,'” chairman Ramy El-Batrawi said in a letter issued yesterday to shareholders. No more specifics about the types of companies were discussed.
El-Batrawi said he recently bought an additional 1.3 million of the company's shares on the open market, bringing his stake to about 10.4 million shares, or slightly more than half of those outstanding.
In late June, GenesisIntermedia, Los Angeles, said it issued warrants to acquire 4 million common shares, and El-Batrawi granted Riverdale options to acquire 1.5 million.
Riverdale, which agreed to provide investment banking services to the company, would hold a 20 percent stake if it exercises all warrants and options.
In the letter El-Batrawi also reported a 69 percent increase in revenues for the second quarter over second-quarter 2000 for GenesisIntermedia and that the company is working to continue cutting operating losses.
“For the second-quarter 2001, we cut losses from operations by 32 percent over second-quarter 2000,” El-Batrawi said. “Our loss from operations for the second-quarter 2001 were also 28 percent lower than our first-quarter 2001 loss from operations, and our first-quarter 2001 loss was 54 percent less than that of the prior quarter. We have every reason to believe that these trends will continue.”
