Lucor, Inc. Reports Results for Third Quarter
24 November 1997Lucor, Inc. Reports Results for Third Quarter
RALEIGH, N.C., Nov. 24 -- Lucor, Inc. , the largest Jiffy Lube franchisee in the United States, today announced a net loss of $199,358, or $0.08 per share, on net sales of $11.0 million in the third quarter of 1997. This compares with a net loss of $190,490, or $0.08 per share, and net sales of $10.1 million a year earlier. Stephen Conway, chairman and chief executive officer, noted that the nine per cent increase in third quarter 1997 sales compared to a year earlier was lower than the percentage increase in the number of Lucor service centers in operation. This occurred in part because new centers generally have lower sales during their first two years of operations, Mr. Conway said, and 37 of the service centers in operation on September 30, 1997 had been open less than 24 months. Another factor is that most of the 16 service centers in currently being operated by Lucor in Sears Auto Service Centers have been significant contributors to the company's losses in 1997. "Though Lucor is under no obligation to continue our Sears operations, we believe that they have the potential to contribute significantly to our profitability over the longer term," Mr. Conway said. "We are improving their operations in an effort to fulfill that potential, and those improvements are part of our reason for expecting a return to profitability in 1998." Marketing costs declined from the third quarter of 1996 as promotional spending in support of recently opened service centers leveled off. Selling, general and administrative costs were $1.5 million in this year's third quarter, essentially unchanged from the comparable period of 1996. Interest expense was $369,031 in the third quarter of 1997, compared with $346,352 a year earlier. Nine-month results In the first nine months of 1997, Lucor had a net loss of $729,336, or $0.29 cents per share, and net sales of $31.8 million. This compares with a net loss of $538,594, or $0.26 per share, and net sales of $27.4 million in the nine months ended on September 30, 1996. Mr. Conway said the company's losses in 1997 and last year are a result of an expansion that began in 1995. As part of that expansion, Lucor has grown from 60 service centers in operation on January 1, 1996 to 100 at the end of this year's third quarter. "We believe that the difficulties associated with such rapid expansion are now mostly behind us, and that we will return to profitability in 1998," he said. "National trends point to continued significant growth in the auto aftermarket -- oil changes in particular." The net loss from operations increased to $99,523 in this year's first nine months, compared with $84,286 a year earlier. Though operating costs rose as a result of the increased number of service centers in operation, a 16 per cent increase in net sales contributed to an overall decline in operating costs as a per cent of sales. Selling, general and administrative expense increased by 10 per cent from the first nine months of 1996 to this year's comparable period, but SG&A declined both as a percentage of sales and on per-car-serviced basis. Full service sales increased in the first nine months of 1997, up 17.7% from last year's comparable period. A full service sale includes a customized Jiffy Lube oil change and fluid maintenance service. Mr. Conway said that Lucor's plans for the future are focused on the active pursuit of acquisitions, increasing the liquidity of the stock, and improving earnings. "We believe that everything is in place for us to reap the benefits of our two-year expansion program," he said. He added that the company's management and Board of Directors do not believe that the current price of the company's stock reflects the true value of Lucor, and that possible ways of addressing that situation are being considered. Lucor, Inc., is the first public and the largest franchisee of Jiffy Lube International. Under the name Jiffy Lube, Lucor operates a growing chain of automotive fast oil change, fluid maintenance and lubrication centers. The company operates service centers in North Carolina, Ohio, Pennsylvania, Michigan, Kentucky and Tennessee. To receive additional information on Lucor, Inc., via fax, at no charge, dial 1-800-PRO-INFO and enter code LUCR. LUCOR, INC. Consolidated Statements of Income (Unaudited) Three Months Nine Months Ended Ended September 30, September 30, 1997 1996 1997 1996 Net sales $11,004,719 $10,054,582 $31,800,784 $27,365,035 Cost of sales 2,564,277 2,352,430 7,405,525 6,469,390 Gross profit 8,440,442 7,702,152 24,395,259 20,895,645 Costs and expenses: Direct 4,373,477 3,622,898 12,173,403 10,069,171 Operating 1,996,786 2,057,736 6,329,092 5,755,386 Depreciation 507,402 431,630 1,633,414 1,185,829 Selling, general, administrative 1,534,034 1,549,031 4,358,873 3,969,545 8,411,699 7,661,295 24,494,782 20,979,931 Income from operations 28,743 40,857 (99,523) (84,286) Interest expense (369,031) (346,352) (1,093,175) (820,511) Other income 23,167 26,638 47,487 124,367 Income (loss) before provision for income taxes (317,121) (278,857) (1,145,211) (780,430) Provision for income taxes (117,763) (88,367) (415,875) (241,836) Net income (loss) (199,358) (190,490) (729,336) (538,594) Preferred dividend paid/accrued (35,000) (28,287) (105,000) (98,287) Net income available for common shareholders $(234,358) $(218,777) $(834,336) $(636,881) Average number of common shares outstanding 2,846,888 2,800,888 2,841,888 2,430,676 Net income (loss) per common share outstanding ($0.08) ($0.08) ($0.29) ($0.26) SOURCE Lucor, Inc.