Earl Scheib Announces Third-Quarter Fiscal 2001 Results
BEVERLY HILLS, Calif.--March 12, 2001--Earl Scheib Inc. (AMEX:ESH) reported its results for the third quarter ended Jan. 31, 2001.Historically, the third quarter has been the most difficult quarter of the company's industry because of adverse winter weather and the holiday season.
Net sales for the third quarter of fiscal 2001 were $10,359,000, a decrease of 1.5 percent from the third quarter of fiscal 2000 net sales of $10,516,000, and same-shop sales decreased 3.6 percent from the prior year.
For the nine months ended Jan. 31, 2001, net sales were $40,683,000, as compared with $41,903,000 for the comparable period in the prior fiscal year, a decrease of 2.9 percent, and same-shop sales decreased 2.6 percent.
The operating loss for the third quarter and nine months of fiscal 2001 was $2,231,000 and $1,873,000, as compared with an operating loss of $2,250,000 and $711,000, respectively, for the same periods of fiscal 2000.
The operating results reflect the impact of decreased same-shop sales and higher operating costs (including those pertaining to the initial fleet and truck center and the commercial coatings operations), which were offset somewhat by a reduction in store- closure costs when compared with the prior fiscal year.
The net loss for the third quarter and nine months of fiscal 2001 was $2,316,000 and $2,027,000, or 53 cents and 47 cents loss per diluted share, respectively, compared with a net loss of $1,953,000 and $1,148,000, or 45 cents and 26 cents loss per diluted share, for the third quarter and nine months of fiscal 2000, respectively.
The company did not recognize any federal income tax benefit for its operating loss in both nine-month periods.
Chris Bement, chief executive officer and president, stated: "The results of the retail paint and body shop business continue to show a decline in same-shop sales.
"Our ongoing evaluation of the performance in this sector has led us to conclude that we are going to concentrate our efforts in those geographic areas where the company has been historically profitable and exit, to the extent it is economically beneficial, from those markets where seasonal weather adversely impacts operating results. This strategy will result in shop closures and planned regional reorganizations."
Bement further stated: "The company's two new business sectors have experienced a longer start-up period than was originally anticipated.
"However, we still believe that they are important elements in enhancing the long-term enterprise value of the company, and we continue our efforts in marketing our low volatile organic compounds (VOC) commercial coatings and related products to industrial users, and have recently committed to opening our second fleet and truck center in Southern California. This second center is scheduled to open in June 2001."
Earl Scheib Inc., founded in 1937, is a nationwide operator of 161 auto paint and body shops located in more than 100 cities throughout the United States.
"Safe-harbor" statement under the Private Securities Litigation Reform Act of 1995: The statements that are not historical facts contained in this news release are forward-looking statements that involve risks and uncertainties, including but not limited to the effect of weather; the effect of economic conditions; the impact of competitive products, services and pricing; capacity and supply constraints or difficulties; changes in laws and regulations applicable to the company; the impact of advertising and promotional activities; the impact of the company's expansion or closing of shops, new-product rollout, fleet operations and commercial coatings business; the potential adverse effects of certain litigation; and the impact of various tax positions taken by the company.
EARL SCHEIB INC.
Condensed Consolidated Statements of Operations
(Unaudited)
Quarter ended Nine months ended
Jan. 31, Jan. 31,
2001 2000 2001 2000
Net sales $10,359,000 $10,516,000 $40,683,000 $41,903,000
Operating loss (2,231,000) (2,250,000) (1,873,000) (711,000)
Loss before income
taxes (2,316,000) (2,423,000) (2,015,000) (1,126,000)
Tax provision
(benefit) -- (470,000) 12,000 22,000
Net loss $(2,316,000) $(1,953,000) $(2,027,000) $(1,148,000)
Basic loss per
share $ (0.53) $ (0.45) $ (0.47) $ (0.26)
Diluted loss per
share $ (0.53) $ (0.45) $ (0.47) $ (0.26)
Weighted average
shares outstanding
-- basic 4,359,000 4,359,000 4,359,000 4,359,000
Weighted average
shares outstanding
-- diluted 4,359,000 4,359,000 4,359,000 4,359,000