Cyrk, Inc. (Nasdaq: CYRK), a global leader in the promotion industry, today announced results for the first quarter ended March 31, 2000 and a restructuring of the Company's promotional product business.

Revenues for the first quarter of 2000 increased 11 percent to $177.3 million from $159.1 million for the same period a year ago. First quarter 2000 net loss available to common stockholders was $918,000, or $(0.06) per diluted share, compared with a net loss available to common stockholders of $3.2 million, or $(0.21) per diluted share for the first quarter of 1999. The Company noted that the first quarter net loss includes a gain of $3.2 million, or $0.11 per diluted share, attributable to the sale of an investment in Exchange Applications (Nasdaq:EXAP).

Additionally, the Company announced that, pursuant to a plan approved by its Board of Directors, it would take a second quarter pre-tax charge estimated to be in the range of $7 million to $9 million for restructuring and nonrecurring expenses. The costs relate principally to involuntary termination costs, the settlement of lease obligations and asset write-downs. The Company plans to eliminate approximately 175 positions, or 15 percent of its domestic workforce. The restructuring plan is anticipated to be substantially complete by the end of the current fiscal year, and is expected to yield annualized savings of $12 million to $15 million.

Commenting on the restructuring plan, Allan Brown, co-chief executive officer of Cyrk, said, "We have responded aggressively to our business challenges by completing an in-depth review of our operations. We have concluded that an integration of our operations will result in greater efficiencies and enhanced customer delivery. We strongly believe that by quickly implementing cost reductions and process improvements, Cyrk will be better positioned to excel in an increasingly competitive marketplace." Last month Mr. Brown assumed responsibility of the global operations of Cyrk's promotional products divisions in addition to his ongoing management oversight of the Company's successful Simon Marketing subsidiary. The realignment was instituted to integrate and streamline the multi-divisional operations of the Company's promotional products business, and to enable the Company to optimize its Internet opportunities.

Commenting on the first quarter results, Nick Mammola, Cyrk's chief financial officer, said, "First quarter results are attributable to the absence of custom product programs such as the Ty business. Our previous guidance on the first quarter was in anticipation of this situation and, accordingly, the results are in line with our expectations. The contribution of Ty business last year was a major driver of our profitability. In light of the uncertainty in 2000 surrounding the overall volume of our custom products business, we have responded by intensifying our focus on our predictable and replicable lines of business and our proprietary offerings in the Internet space."

Patrick D. Brady, co-chief executive officer of Cyrk and head of Cyrk's Internet subsidiary, said, "For four years Cyrk has quietly satisfied our clients' Internet marketing needs. Having implemented online loyalty as far back as 1996, and having produced dozens of online corporate catalogs, the enterprise value of Cyrk's Internet business is substantial, and has gone previously unrealized. Our recent restructuring and refocusing has increased the trajectory of Cyrk's e-business. We are currently taking to market an integrated suite of online marketing technology which offers every major brand, Web merchant, portal or community a better way to attract and retain customers, increase e-commerce and build brand value online."

About Cyrk, Inc.:

Cyrk is a full-service, diversified promotional marketing company specializing in the design and development of innovative, high-impact promotional products and programs. The Company works with some of the largest and best-known brands in the world and has been involved with some of the most successful consumer promotional campaigns in history. Through its wholly-owned subsidiary, Simon Marketing, Inc., the Company is one of the world's largest creators, developers and producers of toys, premiums, promotional print packaging, and games and sweepstakes. Simon is also a leader in the development of integrated marketing solutions including loyalty, licensing, market research and manufacturing. Cyrk's e-business subsidiary creates online loyalty and promotional solutions for its clients; enhances B2B and B2C e-business services in the promotional marketing supply chain; and makes venture and strategic investments and alliances with relevant Internet companies and technologies. Founded in 1976, Cyrk is a worldwide company with offices throughout North America, Europe and Asia. More information about Cyrk can be accessed on the World Wide Web at

This press release contains forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995). These statements include statements regarding intent, belief or current expectations of the Company and its management. You are cautioned that any such forward-looking statements are not guarantees of future performances and involve risks and uncertainties that may cause the Company's actual results to differ materially from the Company's expectations. Factors that could cause actual results to differ materially are discussed in Exhibit 99.1 to the Company's First Quarter 1999 Report on Form 10-Q. Reference to this Cautionary Statement or Exhibit 99.1 in the context of a forward-looking statement or statements shall be deemed to be a statement that any one or more of these factors may cause actual results to differ materially from those anticipated in such forward-looking statement or statements.

This release is available on the KCSA Public Relations Worldwide website at


(In thousands)

ASSETS March 31, March 31,
2000 1999

Current assets:
Cash and cash equivalents $ 86,774 $ 58,179
Investment -- 3,769
Receivables, net 84,253 82,727
Inventories 43,698 68,266
Prepaid expenses and other current assets 19,215 18,241

Total current assets 233,940 231,182

Property and equipment, net 13,148 13,022
Excess of cost over net assets acquired, net 73,273 81,933
Other assets 22,557 9,044
$342,918 $335,181

Current liabilities:
Short-term borrowings $ 6,604 $ 16,509
Accounts payable and accrued expenses 118,084 131,334

Total current liabilities 124,688 147,843

Long-term liabilities 8,992 12,421

Total liabilities 133,680 160,264

Mandatorily redeemable preferred stock 20,553 --

Stockholders' equity 188,685 174,917
$342,918 $335,181


(In thousands, except per share data)

Three Months Ended
March 31,
2000 1999

Net sales $ 177,303 $ 159,077
Cost of sales 144,369 129,323

Gross profit 32,934 29,754
Selling, general and administrative
expenses 37,185 33,864
Goodwill amortization expense 881 870

Operating loss (5,132) (4,980)

Interest income (1,037) (637)
Interest expense 364 616
Other, net (3,245) --

Loss before income taxes (1,214) (4,959)
Income tax benefit (546) (1,736)

Net loss (668) (3,223)

Preferred stock dividends 250 --

Net loss available to
common stockholders $ (918) $ (3,223)

Loss per common share -
Basic and Diluted $ (0.06) $ (0.21)

Weighted average shares outstanding -
Basic and Diluted 15,778 15,485