Aid Auto Stores, Inc. Announces Q4 Financial Results
16 April 1998
Aid Auto Stores, Inc. Announces Financial Results for the Fourth Quarter and Year Ended December 31, 1997
WESTBURY, N.Y., April 16 -- Aid Auto Stores, Inc.,
today announced the financial results for its fourth quarter
and year ended December 31, 1997.
Revenues for the year ended December 31, 1997 were $24,595,789 compared to
$27,393,678 reported in 1996. For the year ended December 31, 1997, the
Company reported a net loss of $4,290,772 or $1.08 per share compared to net
income recorded in 1996 of $30,341 or $0.01 per share.
Revenues for the fourth quarter ended December 31, 1997 were $5,535,165
compared to $6,848,386 reported for the same period a year ago. The net loss
for the quarter was $4,342,128 or $1.10 per share compared to a net loss of
$69,344 or $0.02 per share for the fourth quarter ended December 31, 1996.
Frank Mangano, the Company's Chief Financial Officer, stated that,
"Results for the fourth quarter and year ending December 31, 1997 were
negatively impacted by several factors. These factors consisted of the lower
than anticipated level of retail sales due to the unseasonably mild weather
experienced in the northeast during the 1997/98 winter season. The reduced
sales volume resulting from the weather and planned reduction of our 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
rates of cost of goods sold and operating expenses compared to revenues.
Furthermore, during the fourth quarter the Company incurred approximately
$1.4 million in one time charges associated with the refinancing of its credit
facility, the change in method of accounting for pre-opening costs, the
write-off of inventory associated with the implementation of the Company's
perpetual inventory monitoring system at its Company-owned locations and the
write-off of deferred tax assets."
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.
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
taken steps to improve the financial results of the Company. These steps
include the reduction of our corporate workforce which has resulted in savings
of over 25%, the restructuring and reduction of our warehouse operations to
reflect the Company's current business needs."
Mr. Stephen further stated, "Despite the overall performance of the
Company, the 22 Company-owned stores had earnings before interest, taxes and
depreciation of approximately $735,000. As previously announced, the Board of
Directors has determined that based on the Company's current performance and
industry conditions, that the Company pursue strategic and financial
alternatives in order to maximize shareholder value for the Company. We have
retained Josephthal & Co. Inc. to assist in this process.
Aid Auto Stores is a major New York metropolitan area retailer, wholesaler
and franchiser 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.
AID AUTO STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
(Unaudited)
Year Ended Three Months Ended
December 31, December 31,
1997 1996 1997 1996
Net Sales $24,595,789 $27,393,678 $5,535,165 $6,848,386
Cost of Sales 15,147,158 16,133,042 4,323,041 3,899,943
Selling, General &
Administrative 12,249,643 10,592,189 4,893,968 2,819,625
Income (Loss) Before
Income Taxes (3,922,772) 30,364 (3,974,128) (102,423)
Net Income (Loss) $(4,290,772) $30,364 $(4,342,128) $(69,344)
Net Income (Loss)
per share $(1.08) $0.01 $(1.10) $(0.02)
Weighted average
number of shares
outstanding 3,957,596 3,957,596 3,957,596 3,957,596
Consolidated Balance Sheet Data:
December 31,
1997 1996
Working Capital $372,072 $5,213,339
Total Assets 23,400,650 25,525,128
Long-term Debt 3,662,578 3,305,695
Stockholder's Equity 4,778,293 9,069,065
SOURCE Aid Auto Stores, Inc.