In a conference call with Wall Street analysts regarding second-quarter results, Advanced Marketing Services chairman Charles Tillinghast and president Mike Nicita made it clear that international expansion is one of their top priorities. Tillinghast noted that AMS is aiming to become "the preferred distributor of midsize book publishers worldwide." And both Tillinghast and Nicita said AMS is looking for acquisitions abroad. Nicita, however, had no comment about rumors that the company is planning to acquire Airlift, a U.K. book distributor that represents independent presses, including a number of PGW clients. AMS's holdings in the U.K. include Aspen Book Marketing, Aura Books and Metrastock, as well as a 25% stake in the publisher and packager Templar.
To help coordinate its international expansion, AMS has promoted Mike Kidd to v-p of international. Kidd, who had been managing director of AMS's U.K. operations, will now be responsible for all of AMS's international operations. International markets represented 7% of AMS's total revenue in fiscal 2002, and the segment is off to a good start in fiscal 2003, with sales to the U.K. up 14% in the second quarter and up 34% in Australia.
In the U.S., Nicita said that AMS expects to assume distribution of all mass market paperbacks to the Borders Group's superstores by the end of the fiscal year. The company already distributes paperbacks to Borders's Waldenbooks division, making the bookstore chain AMS's third largest customer; in fiscal 2002, Borders accounted for 8% ($60 million) of the company's revenue.
Neither Nicita nor Tillinghast were willing to predict how the holiday season will be. Nicita noted that in the second quarter, AMS saw "mixed results" among bestsellers, with some bestselling authors not performing as well as expected. For the holiday season, Nicita said he believes that "on balance," the bestseller category will do at least as well as in 2001. The company has been monitoring the West Coast dock lockout, but doesn't think the brief work stoppage will affect the company's holiday sales. Tillinghast added, however, that AMS was developing alternative shipping and printing options should the lockout resume after the 80-day cooling-off period.
