Easyriders Reports Results for Q4 and Fiscal Year Ended Dec 31, 1998
16 April 1999
Easyriders Reports Results for Fourth Quarter and Fiscal Year Ended December 31, 1998
AGOURA HILLS, Calif.--April 16, 1999-- Easyriders, Inc. (AMEX:EZR) announced today that for the three month operating period ended December 31, 1998, the Company recorded revenues of $11.5 million which generated a loss of $5.0 million, or $0.26 per share, compared to revenues of $0.5 million which produced a loss of $0.39 per share during the same period a year earlier.For the twelve months ended December 31, 1998, the Company reported revenues of $13.8 million and a loss of $12.1 million, or a net loss of $1.04 per share, compared to revenues of $2.9 million and a loss of $4.8 million, or $0.57 per share in the same twelve months a year earlier.
On September 23, 1998, the Company consummated a series of transactions (the "Reorganization") including: (i) the acquisition of all of the outstanding common stock of Paisano Publications, Inc. and certain affiliated corporations (the "Paisano Companies"); (ii) the acquisition of all the outstanding equity interests in M&B Restaurants, L.C. (the "El Paso Bar-B-Que Company"); and, (iii) the merger of a subsidiary of the Company into Newriders, Inc. ("Newriders"). As a result of the merger, Newriders, the Paisano Companies and El Paso Bar-B-Que Company became subsidiaries of the Company and the stockholders of Newriders became shareholders of the Company.
The acquisitions of the Paisano Companies and El Paso Bar-B-Que Company were treated under the purchase method of accounting. Therefore, the revenue and net loss amounts stated above, and the historical financial statements presented below, for the three and twelve month operating periods ended December 31, 1997 include only the results of operations for new riders. The corresponding periods in fiscal year 1998 include the results of operations for the Paisano Companies and El Paso Bar-B-Que Company only from the date of the Reorganization to December 31, 1998.
"The fourth quarter and accompanying full year results should not be considered a benchmark of the future operating results of this Company and its subsidiaries. There have been significant, one-time expenses incurred during this operating period relative to our Reorganization, and we have taken other write-downs where appropriate. Additionally, it should be noted that we are now a reconstituted public company with well performing operating subsidiaries which have only been reporting results for the ninety-nine days since the Reorganization," said Bill Prather, President and CEO of the Company.
"Easyriders magazine publishing continues to achieve positive results, including improvement in newsstand sales, especially through maturing relationships with leading retailers like W.H. Smith, WalMart and K-Mart that were established only last quarter. Moreover, our internal budgets continue to be based on an average price for paper per pound that is higher than the actual cost of goods, which provides continued cost savings and is contributing positively to our bottom line. Our agreement with Dennis Publishing, the leading magazine publisher in the U.K., that allows us to produce and distribute the leading heavy metal music magazine Metal Hammer without incurring overhead and other expenses associated with editorial development for the magazine, also directly benefits our bottom line," said Prather.
"We have taken numerous steps to enhance the revenues and profitability of Easyriders franchising. El Paso Bar-B-Que continues to show strong performance, with sales up 22 percent over the last year and same store sales up 3.9 percent. In addition our margins in the El Paso restaurant business continue to improve based on ongoing low pork prices compared with previous quarters. El Paso has also recently received $6.7 million in financing from three leading development financing companies and will be aggressively rolling out new units in the coming year," said Prather.
"The company has also benefited from the recent purchase of stock by John Martin, who bought an additional $1.5 million in common stock at a discount to market, and the forgiving by Joe Teresi of $75,000 of interest and $1.4 million of debt, which has been converted to equity. This demonstrates the high degree of confidence our two major shareholders have in the future of our company," said Prather.
Easyriders, Inc. is a magazine publishing and retail company providing products and services to consumers in the motorcycle market. Easyriders also owns the El Paso Bar-B-Que Company restaurants.
Statements contained in this press release regarding future financial performance and results and other statements that are not historical facts are forward-looking statements. The forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties include, without limitation, risks associated with: future capital needs, management of growth, availability of adequate financing, integration of business operations, concentration of stock ownership, restrictions imposed on the Company by lenders, the magazine publishing and restaurant businesses, paper, pork and other raw materials prices, and other factors discussed in the Company's prospectus/Proxy Statement on Form S-4 dated Sept. 8, 1998.
Easyriders Inc. and Subsidiaries
For the Three For the Twelve
Months Ended Months Ended
Dec. 31 Dec. 31
1998 1997 1998 1997
(Unaudited) (Unaudited) (Audited) (Audited)
Sales $11,519,600 $506,124 $13,760,318 $2,932,708
Cost of Sales 9,238,270 574,919 10,457,224 1,670,146
Gross Margin 2,281,330 (68,795) 3,303,094 1,262,562
Expenses
Selling,
General and
Administrative 6,237,341 2,755,134 8,721,497 4,457,017
Stock Issuance
Expenses 332,332 2,504,867 1,244,000
Loss on Sale of
Restaurant to
Related Party 1,099,760
Write-off of Stock
Subscription
Receivable 750,000
Total Expenses 6,237,341 3,087,466 13,076,124 5,701,017
Profit (Loss)
from Operations (3,956,011) (3,156,261) (9,773,030) (4,438,455)
Other Income
(Expenses)
Other Income
(Expense) 175,808 182,078
Interest
Expense (1,354,656) (96,078) (1,476,099) (338,419)
Interest Expense
Non Cash 146,333 (1,056,538)
Total Other Income
(Expense) (1,032,515) (96,078) (2,350,559) (338,419)
Net Profit (Loss)
Before Income
Taxes (4,988,526) (3,252,339) (12,123,589) (4,776,874)
Provision of
Income Taxes 8,300 8,300
Net Profit
(Loss) ($4,996,826) ($3,252,339) ($12,131,889) ($4,776,874)
Comprehensive
Profit (Loss) ($4,996,826) ($3,252,339) ($12,131,889) ($4,776,874)
Net Profit (Loss)
per Share ($0.26) ($0.39) ($1.04) ($0.57)
Weighted Average
Number of Shares
Outstanding
Basic 19,234,071 8,659,846 11,686,551 8,317,533