Earl Scheib Announces Q1 Fiscal 1999 Results
14 September 1998
Earl Scheib Announces First-Quarter Fiscal 1999 Results
BEVERLY HILLS, Calif.--Sept. 14, 1998--Earl Scheib Inc. (AMEX:ESH) Monday announced results for the first quarter ended July 31, 1998.
Operating income was $1,616,000 in the first quarter of fiscal 1999 compared with operating income of $1,746,000 for the same quarter in fiscal 1998. Operating income excludes interest income, gains and losses from the sale of fixed assets and income taxes.
Net income was $1,006,000, or 21 cents per diluted share, for the quarter ended July 31, 1998, compared with net income of $1,461,000, or 31 cents per diluted share, for the comparable quarter of the previous year.
Net income for the first quarter of 1999 was fully taxable for federal income tax purposes compared with the first quarter of fiscal 1998, which was only partially taxed for federal income tax purposes due to the utilization of net operating loss carryforwards from prior years.
Comparable shop sales for the first quarter of fiscal 1999 were up 4.3 percent compared with the same quarter last year. Total sales were up 7.8 percent in the quarter ended July 31, 1998, compared with the July 31, 1997, quarter.
Dan Seigel, the chief executive officer and president of Earl Scheib, said: "Our results were impacted in the first part of May by unusually wet and cold weather in some of our key marketing areas. In addition, an aggressive sales promotion had an unexpectantly large negative impact on the average revenue per car during the first half of the quarter.
"Both sales and revenue per car improved above the prior-year levels in the last half of the quarter. Unfortunately, the subsequent improvement in revenue per car was not sufficient to offset the decrease in the first half of the quarter. The decrease in revenue per car for the quarter hurt both sales and gross margins.
"Notwithstanding the comparatively flat performance during our first quarter, we believe the company is on the right track with our store growth plans, expansion into the fleet business and our underlying strategy of increasing same-store sales and reducing expenses while giving our customers an exceptional value in paint and body work."
Earl Scheib Inc., founded in 1937, is a nationwide operator of 164 auto paint and body shops located in 141 cities throughout the United States.
The statements which are not historical facts contained in this news release are forward-looking statements that involve risks and uncertainties, including, but not limited to, the effect of weather; the effect of economic conditions; the impact of competitive products, services and pricing; capacity and supply constraints or difficulties; changes in laws and regulations applicable to the company; the impact of year 2000 hardships; the impact of the company's new Europaint(R); the impact of advertising and promotional activities; the potential adverse effects of certain litigation; and the impact of the company's new outside sales force.
EARL SCHEIB INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Quarter
Ended July 31,
1998 1997
Net Sales $ 15,903,000 $ 14,755,000
Operating Income 1,616,000 1,746,000
Income Before Tax 1,621,000 1,718,000
Income Tax Expense 615,000 257,000
Net Income $ 1,006,000 $ 1,461,000
Basic Earnings Per Share $ 0.22 $ 0.32
Diluted Earnings Per Share $ 0.21 $ 0.31
Weighted Average Shares Outstanding -
Basic 4,659,000 4,590,000
Weighted Average Shares Outstanding -
Diluted 4,777,000 4,653,000
EARL SCHEIB INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
As of July 31,
1998 1997
ASSETS
Cash and Marketable Securities $ 3,543,000 $ 4,944,000
Other Current Assets 5,000,000 4,050,000
Total current assets 8,543,000 8,994,000
Property and Equipment, net 19,674,000 18,232,000
Deferred Income Taxes 1,877,000 1,898,000
Other Assets 1,899,000 1,900,000
Total assets $ 31,993,000 $ 31,024,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $ 7,057,000 $ 6,611,000
Deferred Management Compensation 3,350,000 3,365,000
Capitalized Leases 216,000 327,000
Shareholders' Equity 21,370,000 20,721,000
Total liabilities and shareholder's
equity $ 31,993,000 $ 31,024,000