Earl Scheib Announces Fiscal Year 1999 Results
30 July 1999
Earl Scheib Announces Fiscal Year 1999 Results
BEVERLY HILLS, Calif.--July 28, 1999--Earl Scheib Inc. (AMEX:ESH) Wednesday announced financial results for the year ended April 30, 1999 ("fiscal 1999").Sales for fiscal 1999 reached $55 million, an increase of $4,174,000, or 8.2 percent. Same-shop sales, defined as those shops open for more than one year, increased by 3.1 percent.
During fiscal 1999, the company commenced operations in 19 new shops and closed six existing shops, resulting in a year-end operating total of 174 Earl Scheib paint shops.
Despite the growth in sales during fiscal 1999, earnings were only slightly better than break-even.
One of the chief reasons for this poor earnings performance was that the year was burdened by approximately $900,000 of expenses that the company believes are mostly nonrecurring, including an additional reserve for workers' compensation claims and legal costs for defending against a lawsuit that has since been settled.
Largely as a result of these expenses, operating income for fiscal 1999 decreased $623,000 from an operating income of $1,021,000 in the year ended April 30, 1998 ("fiscal 1998"), to an operating income of $398,000 for fiscal 1999. Operating income excludes interest income and expenses, gains and losses from the sale of real estate and fixed assets, and income taxes.
Net income was $56,000, or 1 cent per share, for fiscal 1999, compared with net income of $1,064,000, or 22 cents per diluted share, for fiscal 1998.
Chris Bement, chief executive officer and president of Earl Scheib, said: "We are disappointed with the slowdown in estimates and jobs completed during the past six months. We are implementing new programs, evaluating our advertising focus and reducing costs wherever possible to reverse this trend, while continuing programs such as fleet work and new-shop expansion to ensure the future growth of the company."
Earl Scheib Inc., founded in 1937, is a nationwide operator of 174 auto paint and body shops located in 145 cities throughout the United States.
Safe-harbor statement under the Private Securities Litigation Reform Act of 1995: The statements that are not historical facts contained in this earnings 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 impact of the company's expansion and fleet sales, the potential adverse effects of certain litigation, and the impact of various tax positions taken by the company.