Aid Auto Stores, Inc. Announces Financial Performance for the Fourth Quarter and Year Ending December 31, 1997
2 April 1998
Aid Auto Stores, Inc. Announces Financial Performance for the Fourth Quarter and Year Ending December 31, 1997
The Retention of Josephthal & Co., Inc. to Assist
in Evaluating Strategic Alternatives
WESTBURY, N.Y., April 1 -- Aid Auto Stores, Inc.
(Nasdaq: AIDA, AIDAW), today announced the results for its fourth quarter and
year-ended December 31, 1997 did not meet the Company's expectations.
Furthermore, it announced that it has retained New York-based Josephthal
& Co., Inc., an investment banking and securities brokerage firm, to assist in
evaluating strategic alternatives for the Company.
The Company has filed Form 12b-25 "Notification of Late Filing" with the
Securities and Exchange Commission as it requires additional time to complete
the audit process. The Company stated that the results for the fourth quarter
and year ending December 31, 1997 were negatively impacted by the unseasonable
winter weather in the Northeast and significant one time charges associated
with the refinancing of its credit facility, the change in method of
accounting for pre-opening costs, and the write-off of intangibles and
inventory.
The Company stated that earnings in the first quarter of 1998 will also be
negatively impacted by the poor winter season, resulting in reduced sales.
The first and fourth quarters are historically the weakest periods with
respect to earnings for the Company.
Frank Mangano, the Company's Chief Financial Officer, explained that
results for the fourth quarter and year ending December 31, 1997 will be
finalized by April 15, 1998. Mr. Mangano further indicated that reduced sales
volume in 1997 due to the adverse winter season as well as to the planned
reduction of the wholesale business, did not allow the Company to sufficiently
leverage its corporate overhead or take advantage of vendor provided volume
purchasing discounts to the extent realized in prior years. This caused both
significantly higher costs of goods sold and operating expenses compared to
revenues.
Commenting on the results, Philip L. Stephen, Chairman and CEO, stated,
"We are extremely disappointed with our results for 1997 and are continuing to
take steps to improve our performance, rationalize our expenses and evaluate
our strategic and financial options. During the first quarter of 1998 we have
reduced compensation expense by over 25% and are implementing a plan to
significantly reduce warehouse and distribution costs. These reductions
relate directly to our plan of de-emphasizing the wholesale segment of the
business. Finally, the Board of Directors has determined that based on the
Company's current performance and overall industry conditions, it is prudent
to evaluate our strategic and financial alternatives in order to maximize
shareholder value. We have retained Josephthal & Co., Inc. to assist in this
process."
Aid Auto Stores is a major New York metropolitan area retailer, wholesaler
and franchisor of automotive parts and accessories, targeting both the
do-it-yourself and commercial markets. Through its wholly owned subsidiary,
Ames Automotive Warehouse, the Company supplies automotive aftermarket
products for resale to major non-automotive chain stores.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995: The statements which are not historical facts contained in this
press release are forward-looking statements that involve risks and
uncertainties including, but not limited to, risks associated with the
Company's future growth and profitability, the ability of the Company to
successfully open new retail stores and integrate acquisitions, the ability of
the Company to sufficiently cut costs and the effects of general economic
conditions and other risks detailed in the Company's Securities and Exchange
Commission filings.
SOURCE Aid Auto Stores, Inc.