APS Holding Reports Second Quarter Results; Loss in Line With Previous Announcement
8 September 1997
APS Holding Reports Second Quarter Results; Loss in Line With Previous Announcement
Company Restructuring Progressing According to Plan
HOUSTON, Sept. 8 -- APS Holding Corporation (APS)
reported today that, consistent with its August 13, 1997,
announcement, its after tax loss for the second quarter ended July 25, 1997
was $1.7 million, or $0.12 per share, before the restructuring charge and
related costs. After the restructuring charge and related expenses of $11.8
million, APS' net loss for the quarter is $9.7 million, or $0.70 per share,
compared to net income of $6.0 million, or $0.43 per share, for the same
period last year.
The company said that while its independently owned Big A(R) store base
has remained steady during the second quarter, sales compared to last year
declined 6 percent from $234.3 million to $220.4 million. Of the $13.9
million sales decline, $8.2 million was related to fewer company-owned stores
in operation as well as a 5.8 percent decline in their comparable store sales.
"On August 13, 1997, the company announced a comprehensive restructuring
program that focuses on a return to profitability," stated Hubbard C. Howe,
Chief Executive Officer. "Major initiatives have been launched, and clear
accountability for each of them resides with various officers of APS. The
headcount reductions and store closures are progressing according to plan, and
we are already seeing the financial benefits from some of these actions.
However, we want to be clear that the financial impact from all of the
company's initiatives will not be fully realized for at least two years," Howe
said.
For the six months ended July 25, 1997, excluding the previously mentioned
charges, the net loss was $2.6 million or $0.19 per share. After giving
effect to these charges, the net loss was $10.6 million, or $0.77 per share,
compared to net income of $7.3 million, or $0.53 per share, for the similar
period last year. Sales for the six month period were $432.1 million, down
4.4 percent from the $451.9 million reported a year ago. As reported for the
second quarter, the majority of the sales decline was attributable to the
company-owned store division where same store sales declined 5.0 percent.
APS Holding Corporation is a nationally recognized distributor of Big A(R)
brand and manufacturers' branded automotive replacement parts, as well as
tools, equipment, supplies and accessories. It sells to approximately 1,750
associated auto parts stores through 28 distribution centers, and after giving
effect to the closures announced August 13, 1997 the company will operate
approximately 280 company-owned Big A stores and 210 Installers' Service
Warehouse units.
This news release contains forward-looking statements that involve risks
and uncertainties. Actual results, events and performance could differ
materially from those contemplated by these forward-looking statements. Among
the factors that could cause actual results, events and performance to differ
materially are the risks and uncertainties discussed in this news release and
those detailed from time to time in the company's filings with the Securities
and Exchange Commission, including the company's annual report on Form 10-K
for the fiscal year ended January 25, 1997, and to the company's quarterly
report on Form 10-Q for the quarterly period ended April 25, 1997, and in the
company's other public reports and statements.
APS Holding Corporation
Consolidated Statements of Operations
(UNAUDITED)
In Thousands Except Per Share Amounts
For the Periods Ended July 25, 1997 and 1996
Six Months Ended Three Months Ended
July 25, July 25, July 25, July 25,
1997 1996 1997 1996
Net Sales $432,134 $451,871 $220,391 $234,305
Cost of Goods Sold 290,755 299,440 150,755 155,248
Gross Profit 141,379 152,431 69,636 79,057
Selling, General &
Administrative Expense 135,893 130,253 68,618 64,430
Restructuring and asset
impairment charges 8,726 0 8,726 0
Operating Income (Loss) (3,240) 22,178 (7,708) 14,627
Interest Income 2,523 2,812 1,258 1,449
Other Income 100 323 50 50
Earnings (Loss) Before
Interest & Taxes (617) 25,313 (6,400) 16,126
Interest Expense 15,064 13,683 7,747 6,682
Earnings (Loss) Before Taxes (15,681) 11,630 (14,147) 9,444
Income Tax Provision (Benefit) (5,095) 4,312 (4,497) 3,481
Net Income (Loss) ($10,586) $7,318 ($9,650) $5,963
Earnings (Loss) Per Share ($0.77) $0.53 ($0.70) $0.43
Average Shares Outstanding 13,775 13,902 13,780 13,920
Note: Certain reclassifications have been made to prior year financial
statements to conform to current year presentation.
* Results for the six months and three months ended July 25, 1997 include
a pre-tax restructuring charge of approximately $8.7 million. In addition,
Cost of Goods Sold for the six and three months ended July 25, 1997 includes a
pre-tax charge of approximately $1.3 million for inventory losses expected in
connection with facility closures included in such restructuring reserve and
Selling, General and Administrative Expenses for the same periods include a
provision for bad debt of approximately $1.8 million related to such facility
closures. Excluding such pre-tax charges, aggregating approximately $11.8
million, net loss for the six months and three months ended July 25, 1997
would have been $2.6 million ($0.19 per share, after tax) and $1.7 million
($0.12 per share after tax), respectively.
SOURCE APS Holding Corporation