Hi-Lo Automotive Announces Fourth Quarter and Annual Results
15 January 1998
Hi-Lo Automotive Announces Fourth Quarter and Annual Results
HOUSTON, Jan. 15 -- Hi-Lo Automotive, Inc. today
announced results for its fourth quarter and year ended December 31, 1997.
Sales for the fourth quarter ended December 31, 1997 were $53.8 million
compared to $56.3 million for the fourth quarter of 1996, a 4.5% decrease.
Same store sales for the fourth quarter decreased 3.2%. Net loss for the
quarter was $2.3 million, including a $4.0 million pre-tax charge for costs
related to the Company's termination of its previously announced merger
agreement with Discount Auto Parts, Inc. A net loss of $1.8 million was
recorded in the fourth quarter of 1996. Loss per share for the quarter was
$0.21, compared to a loss per share of $.17 for the fourth quarter of the
previous year.
During the fourth quarter of 1997 the Company and O'Reilly Automotive,
Inc. entered into a merger agreement in which O'Reilly agreed to acquire all
of the outstanding shares of Hi/LO for $4.35 per share in cash. The agreement
to acquire Hi/L0 was signed after Hi/LO terminated its merger agreement with
Discount Auto Parts, Inc. and paid the required termination fee of
$4.0 million. The termination fee is recorded as an operating cost in the
fourth quarter financial statements.
Sales for the twelve months ended December 31, 1997 were $238.3 million
compared to $248.6 million for the same period of 1996, a 4.1% decrease. Same
store sales for the twelve months decreased 2.8%. Net loss for the year,
after giving effect to the charges described above, was $0.4 million compared
to a net loss of $53.7 million in 1996. The 1996 loss included pre-tax
charges of $59.4 million, primarily cost in excess of net assets acquired
(goodwill) as well as certain other costs. Net loss per share for the year
was $0.03 compared to a net loss of $4.99 in l996.
Some of the information in this press release constitutes forward-looking
information based on current information and expectations of the Company that
involve a number of uncertainties. Among the factors that could materially
affect the validity of the forward-looking information are the following:
changes in current industry trends, changes in competitive factors, changes in
the economic environment in which the Company has its operations, and other
factors which would generally affect the operations of the Company.
Hi-Lo Automotive, Inc. sells automotive aftermarket parts, products and
accessories to retail and commercial customers through its 189 stores in
Texas, Louisiana and California.
Hi-LO AUTOMOTIVE, INC.
INCOME STATEMENT
(In thousands, except share data)
(Unaudited)
Quarter Ended Twelve Months Ended
December 31, December 31,
1997(A) 1996 1997(A) 1996(B)
Sales $ 53,761 $ 56,276 $ 238,320 $ 248,599
Operating Income (loss) (2,726) (1,775) 3,618 (59,316)
Loss before benefit
on loss (3,591) (2,639) (621) (64,055)
Net loss $ (2,293) $ (1,818) $ (361) $ (53,723)
Net lose per common share
and per common and common
equivalent share $ (0.21) $ (0.17) $ (0.03) $ (4.99)
Weighted average common
and weighted average
common and common
equivalent shares
outstanding 10,775,000 10,756,000 10,775,000 10,756,000
(A) During the fourth quarter of 1997, O'Reilly Automotive, Inc. agreed
to acquire all of the outstanding shares of Hi/LO for $4.35 per
share in cash. The agreement to acquire Hi/LO was made after Hi/LO
terminated its previously announced merger with Discount Auto Parts,
Inc. and paid the required termination fee of $4.0 million. The
termination fee and certain related transaction costs are recorded
as operating costs in the fourth quarter financial statements.
(B) During 1996, the Company recorded pre-tax charges of $59.4 million.
This included a charge of $3.7 million to cost of goods sold as a
result of valuing certain inventories at their realizable values
which were less than original costs. Also included in the pre-tax
charge was $4.3 million of operating, selling, general and
administrative expenses, primarily related to store occupancy costs.
The remaining $51.4 million provision for asset impairment and store
closings includes $37.7 million of intangibles, primarily cost in
excess of net assets acquired (goodwill), and $13.7 million for
store closings and liquidation of real estate previously acquired
for future expansion. Based on current industry trends and the
Company's operating environment, the Company does not anticipate
future charges of this nature.
SOURCE Hi-Lo Automotive, Inc.