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The Parts Source, Inc. d/b/a Ace Auto Parts Announces Q2 Results

18 August 1998

The Parts Source, Inc. d/b/a Ace Auto Parts Announces Second Quarter and Six Month Results Along With Joining Auto Value Associates, Inc.

    CLEARWATER, Fla., Aug. 18 -- The Parts Source, Inc. d/b/a Ace
Auto Parts has reported that for the three months ended June
30, 1998 revenues rose 12.4%, to $11.4 million, as compared to $10.2 million
for the same three months of 1997. This increase was due primarily to
$1 million in sales from seven new stores acquired or opened during 1997.
Same-store sales for the three months increased 2.6%. Net earnings for the
three months was $3,219 as compared to net earnings of $23,271 for the same
three-month period of 1997.
    The difference was due primarily to an increase in OSG&A expenses
resulting mainly from a reduction in reimbursements of promotional expenses
received from suppliers in 1998 compared to 1997.
    The Company reported for the six months ended June 30, 1998 revenues rose
11.3% to $22.1 million as compared to $19.9 million for the same six months of
1997. This increase was primarily due to sales from seven new stores acquired
or opened during 1997. Same store sales remained relatively constant. A net
loss of ($24,922) for the six months ending June 30, 1998 was reported as
compared to net earnings of $74,519 for the same six months of 1997. This
resulted in a ($.01) loss per share for the six months as compared to a $.02
diluted earnings per share for the same six months of 1997. The loss was due
in part to an increase in OSG&A expenses resulting primarily from a reduction
in reimbursements of promotional expenses received from suppliers in 1998
compared to 1997, as well as a one-time charge of $80,000 in back compensation
to certain past and present employees.
    The Company also announced it has joined Auto Value Associates, Inc., a
national buying and marketing group, to assist in the Company's negotiations
with manufacturers to buy product direct as well as to provide marketing tools
currently being provided by its main supplier. Auto Value's membership has a
network of more that 1,800 affiliated part stores throughout North America
with annual sales of nearly $1.5 billion.
    Thomas D. Cox, President and Chief Executive Officer, commented, "We are
disappointed in our six months results, however, it is understandable
considering what the Company has been through during the past six months with
its main supplier, A.P.S., filing a petition with the U.S. Bankruptcy Court
seeking reorganization under Chapter 11.
    He continued to say, "The Company's management team has been working
diligently over the past months, in preparing to handle its own distribution
of product, which will thereby enable the Company to improve its acquisition
cost of merchandise. Management operated a warehouse distribution center for
over 20 years in the past, and is extremely excited to enter the distribution
business once again. We fully expect to have a distribution center operational
during the fourth quarter of this year."
    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 operation of the Company.
    Ace Auto Parts is a specialty supplier and retailer of automotive
replacement parts, tools, supplies equipment and accessories to both
professional mechanics and do-it-yourself customers. The Company presently
operates 42 stores in the state of Florida.