Earl Scheib Announces Improved Operating Results for the Fourth Quarter and Fiscal Year 2005
SHERMAN OAKS, Calif.--July 27, 2005--Earl Scheib, Inc. (Pink Sheets: ESHB) reported its results for the fourth quarter and fiscal year ended April 30, 2005.Net sales for the fourth quarter of fiscal 2005 were $13,643,000, an increase of 7.2% from the fourth quarter of fiscal 2004 net sales of $12,724,000, despite the Company operating six fewer retail paint and body shops at April 30, 2005 versus 2004. The Company had one less sales day in the fourth quarter of fiscal 2005 versus fiscal 2004. On a same-day basis, same-shop sales increased by 11.2%. Additionally, the combined sales from the Company's fleet and truck center and commercial coatings operations increased by $203,000 in the fourth quarter of fiscal 2005 from the fourth quarter of fiscal 2004.
Net sales for fiscal 2005 were $48,514,000, as compared to $47,839,000 for fiscal 2004, an increase of 1.4 percent with two less sales days and a weighted-average seven fewer shops from the prior fiscal year. However, on a same-day basis, same-shop sales increased by 4.6% and the combined sales in the Company's fleet and truck center and commercial coatings operations increased by $602,000 in fiscal 2005 from fiscal 2004.
Operating income for the fourth quarter of fiscal 2005 was $655,000 which is a significant improvement of $798,000 over the 2004 fourth quarter loss of $143,000. The improved operating results in the fourth quarter of the current fiscal year were primarily due to the same-shop sales increase, greater efficiency in the retail paint and body shops which resulted in an improved gross margin, and a $313,000 improvement in the combined results from the Company's fleet and truck center and commercial coatings operations.
The operating income for fiscal 2005 of $566,000 compares very favorably and represents a significant improvement from the $1,862,000 operating loss in fiscal 2004. The turnaround in fiscal 2005 from fiscal 2004 was primarily due to the increased same-shop, same-day sales, greater efficiency in the retail paint and body shops (primarily as a result of reduced insurance costs) which resulted in an improved gross margin, and a $518,000 improvement in the combined results of the Company's fleet and truck center and commercial coatings operations.
Overall, the fourth quarter of fiscal 2005 earned net income of $452,000, or $0.10 per diluted share, compared to net income of $921,000, or $0.21 per diluted share, for the fourth quarter of fiscal 2004. The fourth quarter of fiscal 2004 included a one-time, pre-tax benefit of $1,272,000, or $0.29 per diluted share, for the reversal of previously accrued interest expense resulting from a favorable settlement with the Internal Revenue Service of a net operating loss carryback.
For fiscal 2005, the net loss was $236,000, or $0.05 per diluted share, compared to a net loss of $1,336,000, or $0.31 per diluted share, for fiscal 2004. Fiscal 2004 included a one-time, pre-tax benefit of $1,272,000,or $0.29 per diluted share, for the reversal of previously accrued interest expense resulting from a favorable settlement with the Internal Revenue Service of a net operating loss carryback.
Chris Bement, Chief Executive Officer and President, stated that, "I am pleased to report that we continued to make substantial improvements in our operating results. Including the fourth quarter of fiscal 2004, we have attained same-shop, same-day sales increases for the past eight straight quarters. And, the sales increases continued into May and June (fiscal 2006), resulting in sales increases for 24 out of the past 26 months.
"In light of our continued sales increases and improved operating profits, we will be opening, in the Fall of 2005, our first new retail paint and body shop since November of 2000. This shop will be located in San Jose, CA. We are also looking for additional new retail paint and body shops in Southern California and in Las Vegas, NV.
"The Company withdrew its listing with the American Stock Exchange and is now traded on the Pink Sheets, with the symbol ESHB, and filed a Form 15 to voluntarily deregister its securities with the Securities and Exchange Commission ("SEC"). As a result, the Company no longer has an obligation to file current and periodic reports with the SEC, such as Forms 10-K, 10-Q and 8-K. The deregistration of its securities became effective (although the reporting requirements were suspended immediately upon filing of the Form 15) on July 6, 2005. However, we do intend to continue to, among other things, report quarterly and annual financial results in news releases, engage an independent accounting firm to perform an annual audit of our financial statements and maintain many of the corporate governance improvements we have made in recent years. We plan to make our audited financial statements available on the Company's website by September 1, 2005."
Earl Scheib, Inc., founded in 1937, is a nationwide operator of 107 auto paint and body shops located in approximately 100 cities throughout the United States. In addition, through a wholly-owned subsidiary, Earl Scheib, Inc. manufactures paint coating systems that are used not only by its paint and body shops, but are also sold to original equipment manufacturers. For more information, visit Earl Scheib on the web at www.earlscheib.com.
EARL SCHEIB, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For The Quarter For The Fiscal Year
Ended April 30, Ended April 30,
2005 2004 2005 2004
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Net Sales $13,643,000 $12,724,000 $48,514,000 $47,839,000
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Operating Income
(Loss) 655,000 (143,000) 566,000 (1,862,000)
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Gain on Sales of Real
Property -- -- 15,000 --
Interest Income
(Expense), net (203,000) 1,096,000 (747,000) 610,000
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Income (Loss) Before
Tax 452,000 953,000 (166,000) (1,252,000)
Tax Provision -- 32,000 70,000 84,000
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Net Income (Loss) $452,000 $921,000 $(236,000) $(1,336,000)
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Basic Income (Loss)
Per Share $0.10 $0.21 $(0.05) $(0.31)
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Diluted Income (Loss)
Per Share $0.10 $0.21 $(0.05) $(0.31)
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Weighted Average
Shares Outstanding -
Basic 4,390,000 4,380,000 4,384,000 4,380,000
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Weighted Average
Shares Outstanding -
Diluted 4,410,000 4,391,000 4,384,000 4,380,000
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