NewRoads Reports Record Financial Performance and Customer Growth

Wednesday August 31, 9:39 am ET
Significant Customer Achievements and Third Straight Quarter of Profitability Demonstrate NewRoads' Momentum

HUNTERSVILLE, N.C.--(BUSINESS WIRE)--Aug. 31, 2005-- NewRoads, the market-leading business process outsourcer of direct-to-customer commerce services, today announced significant year-to-date milestones and strong operating momentum as it heads into peak seasonal periods. The milestones include record financial performance, renewals of agreements with major customers as well as new contracts, and continued success of its Lean Six Sigma programs.

At a recent meeting of its Board of Directors and key investors, NewRoads announced its third consecutive quarter of record financial performance and operating cash flow. While NewRoads is held by private equity, and therefore does not publicly issue financial reporting, Chief Executive Officer Hank Reeves provided commentary on the results.

"NewRoads had another strong, profitable quarter and we remain well ahead of our earnings and cash generation targets for the year," said Reeves. "Year-to-date, our earnings are up over last year by more than $11MM and we see these improvements becoming even more dramatic as we head into our peak seasonal periods. We're continuing to see revenue favorability driven by successful new programs and overall growth of direct-to-customer commerce. Our operational performance has also been outstanding as our Lean Six Sigma programs have translated to double digit cost productivity and even better service performance for our customers. Our balance sheet remains strong with no debt and substantial cash reserves available for acquisitions and investments."

As a testament to the strength of the NewRoads offering, 10 customers have recently renewed their contracts, including top brands like Godiva Chocolatier, Bluefly, Jostens, Keurig, Cartoon Network, Art Institute of Chicago and Chico's FAS. The transactions associated with these renewals alone represent over 2.2MM shipments, 900,000 customer call interactions and $160MM of retail sales.

NewRoads has also added four new customers to its list of world-class brands that rely on the company for its service excellence, brand protection and ability to provide a seamless experience to the end customer. Two of these customers, both well-known retail and apparel companies, are experiencing significant growth and have selected NewRoads as their full-service provider for order management, fulfillment, customer care and logistics. Additional customers include a major U.S. financial institution for which NewRoads will be providing support for its customer rewards programs, and a well-known home goods provider for which NewRoads will provide end-to-end direct-to-customer commerce services.

The combination of NewRoads' Lean Six Sigma efforts and the restructuring actions taken in the past year has the company positioned to achieve excellent results in the future. NewRoads' financial performance to date reflects this and the outlook based on new customer signings, existing client renewals and overall operating momentum is very positive.

Lean Six Sigma Process Improvements
Lean Six Sigma is an established leadership methodology that utilizes a disciplined, data-driven approach: it is at the core of NewRoads' operations and is quickly becoming part of the fabric of the company. Utilizing Lean Six Sigma has allowed NewRoads to shave costs, both internally and for its customers, while further improving service quality across its operating centers.
Lean Six Sigma has also provided a common language for the company to use in all of its process and quality improvement initiatives. NewRoads' deployment plan includes the training and testing of every professional in the company to ensure accountability and process excellence across the organization. NewRoads professionals also "learn by doing" through executing functional projects and/or participating in enterprise wide Lean Six Sigma initiatives. The current initiatives include: Enhancing Real-Time Data Access, Streamlined Billing Processes, Returns Processing and Call Center Utilization Modeling.

By bringing these disciplines to a market that has never before seen them, NewRoads has established itself as a truly strategic outsourcing partner, and provided a more efficient manner of serving its customers.

NewRoads now carries its operating momentum into the critical fourth quarter with a heightened focus on growth, pursuing several large-scale client partnerships that leverage its expertise in IT integration, customer care, fulfillment and logistics.

About NewRoads
NewRoads is a market-leading business process outsourcer, providing a complete set of outsourced services that include fulfillment, customer care, leading-edge Web-based services and logistics for direct-to-customer commerce. NewRoads has a proven track record serving some of the world's best known brands such as American Eagle Outfitters, Godiva Chocolatier, Restoration Hardware and many others. The company combines operating scale, functional expertise and Lean Six Sigma process excellence to deliver its clients and their consumers a better brand experience at lower cost. NewRoads has an unparalleled commitment to customer service and focus on brand protection that translates into guaranteed results. For more information, visit www.newroads.com.