Aid Auto Stores Announces Q2 Results
24 August 1998
Aid Auto Stores Announces Second Quarter Results
WESTBURY, N.Y.--Aug. 21, 1998--Aid Auto Stores Inc. today announced the financial results for the three and six month periods ended June 30, 1998.Revenues were $4,160,593 for the quarter ended June 30, 1998 as compared to $6,221,392 for the quarter ended June 30, 1997. Net loss for the quarter was $759,537 or $0.19 per share, compared to net income of $68,315 or $0.02 per share for the comparable year ago period.
Revenues for the six months ended June 30, 1998 were $8,673,032 compared to $12,313,990 for the comparable period in 1997. Net loss for the period was $1,745,945 or $0.44 per share as compared to net income of $10,329 or $0.00 per share for the comparable period in 1997.
The decline in revenues was attributed to several factors. These factors consisted of the lower than anticipated level of retail sales due to the reduction in advertising expenditures and inventory purchase levels due to working capital constraints. In addition, the recent industry-wide softness and the warmest winter weather since records have been kept, also contributed to the decline in retail revenues. Revenues were further impacted by the company's continued de-emphasis of its wholesale business. Through termination or non-renewal of franchise agreements, the number of franchised stores has decreased since the end of the second quarter of 1997 from 34 to 20. Wholesale sales declined $2.3 million from $3.7 million for the six month period ended June 30, 1997 to $1.4 million for the six month period ended June 30, 1998, which is consistent with the company's strategy to de-emphasize its wholesale business.
Commenting on the results, Philip L. Stephen, chairman and CEO, stated, "We are extremely disappointed with our results for the first half of 1998 and are continuing to take steps to improve our performance, rationalize our expenses and evaluate our strategic and financial options. We have also begun to aggressively pursue our goal to substantially increase our commercial business during the balance of 1998. We believe there is significant opportunity in this area. We are convinced that the initiatives taken will ultimately enhance the company's performance, its balance sheet and returns."
Stephen further stated, "Despite the overall performance of the company, the 22 company-owned stores had earnings before interest, taxes and depreciation of approximately $416,000. These earnings at the store level would be significantly higher if not for the cash constraints which have put severe limits on our inventory mix and our ability to advertise. Since the inception of the Superstore growth program, the company-owned stores have had positive store level EBITDA margins. We believe that this clearly demonstrates our performance as a company in transition from a wholesaler to a retailer. As previously announced, the company has retained Josephthal & Co. Inc. to assist it in exploring strategic alternatives, which may include, among other things, a significant merger/acquisition of the company. We are currently involved in discussions with several interested parties with respect to a significant transaction."
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.
AID AUTO STORES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Revenues $4,160,593 $6,221,392 $8,673,032 $12,313,990
Cost of sales 2,330,777 3,311,616 4,811,110 6,854,435
Selling, general
and
administrative 2,248,081 2,566,496 4,911,348 4,911,337
Total costs and
expenses 4,578,858 5,878,112 9,722,458 11,765,772
(Loss) income
from operations (418,265) 343,280 (1,049,426) 548,218
(Loss) income before
income taxes (759,537) 68,315 (1,745,945) 10,329
Provision for income
taxes -- -- -- --
Net (loss) income $(759,537) $ 68,315 $(1,745,945) $ 10,329
(Loss) income per
common share
(Loss) income
before income
taxes $(.19) $ .02 $(.44) $ --
Net (loss) income
per common share $(.19) $ .02 $(.44) $ --
Weighted average
common shares
outstanding 3,957,596 3,957,596 3,957,596 3,957,596