Safelite Glass Corp. Reports Quarter Ended July 3, 1999 Results
30 July 1999
Safelite Glass Corp. Reports Quarter Ended July 3, 1999 Results
COLUMBUS, Ohio, July 28 -- Safelite Glass Corp., the leader
in the automotive glass replacement and repair industry, reported today the
results for its fiscal quarter ended July 3, 1999.
Quarter Ended July 3, 1999 Results
The Company reported total sales of $239.1 million for its fiscal first
quarter ended July 3, 1999, a 1% decrease from $241.2 million in the quarter
ended July 4, 1998. Installation and related services sales of $227.9 million
were essentially flat for the first quarter as replacement unit volume gains
of approximately 8% were offset by lower overall industry pricing levels as
compared to the fiscal first quarter of 1999, when there was a significant
industry-wide price increase which subsequently dissipated. Wholesale
revenues fell approximately $2.9 million to $11.2 million as a result of lower
unit sales, reflecting a strategic decision by Safelite away from less
profitable truckload sales and a shift towards greater use of Safelite
manufactured product in service center locations.
Safelite's fiscal first quarter earnings before interest, taxes,
depreciation, amortization, restructuring and other one-time charges
("Adjusted EBITDA") were $23.0 million, a decrease of $6.0 million over the
quarter ended July 4, 1998. Adjusted EBITDA was adversely impacted by the
lower industry-wide pricing levels described above, a higher mix of network
business which carries lower profit margins compared with work performed at
company-owned service centers and increased selling, general and
administrative expenses attributable primarily to investment in higher
advertising costs and increased staffing in the Company's national call
centers to support recent Master Provider contract awards. Lower product
costs and increased service center productivity levels offset a portion of
these adverse effects. Operating income of $17.2 million was $1.3 million
lower than the prior year's period. Prior year operating income was
negatively impacted by $4.5 million of restructuring and other one-time
charges associated with Safelite's merger with Vistar, Inc. Net income for
the fiscal first quarter was $2.4 million, or $1.0 million less than the prior
year.
"First quarter results were in line with our expectations" said John F.
Barlow, Safelite's Chief Executive Officer. "Our operating efficiencies have
improved significantly over a year ago and we are achieving solid installation
and related services unit growth. Safelite is continuing to gain market
share, largely through our ability to capture new programs with major
insurers, such as our recent agreement with American Family Insurance."
Cautionary Statement
Readers are cautioned that there are statements contained in this document
which are "forward-looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking
statements include statements which are predictive in nature, which depend
upon or refer to future events or conditions, which include words such as
"expects", "anticipates", "intends", "plans", "believes", "estimates", or
similar expressions. In addition, any statements concerning future financial
performance (including future revenues, earnings or growth rates), ongoing
business strategies or prospects, and possible future Company actions, which
may be provided by management are also forward-looking statements as defined
by the Act. Forward-looking statements are based on current expectations and
projections about future events and are subject to risks, uncertainties, and
assumptions about the Company, economic and market factors and the industries
in which Safelite does business, among other things. These statements are not
guaranties of future performance and Safelite has no specific intention to
update these statements.
These forward-looking statements, like any forward-looking statements,
involve risks and uncertainties that could cause actual results to differ
materially from those projected or anticipated. The risks and uncertainties
include product demand, regulatory uncertainties, the effect of economic
conditions, the impact of competitive products and pricing, changes in
customers' ordering patterns and costs and expenses associated with any Year
2000 issues associated with Safelite, including updating software and hardware
and potential system interruptions. This list should not be construed as
exhaustive.
SAFELITE GLASS CORP.
STATEMENTS OF INCOME
($ IN MILLIONS)
Quarter Ended
July 3, 1999 July 4, 1998
Sales $239.1 $241.2
Cost of sales 172.7 170.7
Gross profit 66.4 70.5
Selling, general & administrative expenses 49.2 47.5
Other operating expenses (a) -- 1.0
Restructuring -- 3.5
Operating income 17.2 18.5
Interest expense (11.5) (11.2)
Interest income 0.1 0.1
Income before income taxes 5.8 7.4
Income tax provision (3.4) (4.0)
Net income $2.4 $3.4
Depreciation and amortization $5.8 $6.0
Capital expenditures $3.6 $4.3
Adjusted EBITDA $23.0 $29.0
(a) Other operating expenses consist of one-time integration costs
associated with the Vistar Merger.
SAFELITE GLASS CORP.
BALANCE SHEETS
($ IN MILLIONS)
July 3, 1999 April 3, 1999
ASSETS
CURRENT ASSETS:
Cash and short term investments $1.6 $2.9
Accounts receivable, net 76.9 70.3
Inventories 55.0 50.4
Other 17.5 20.0
Total 151.0 143.6
PROPERTY, PLANT AND EQUIPMENT, NET 64.0 64.1
INTANGIBLE ASSETS, NET 278.3 280.8
OTHER 82.4 85.3
TOTAL ASSETS $575.7 $573.8
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $61.0 $50.3
Accrued expenses 32.3 36.1
Current portion of long-term debt 3.5 4.5
Total 96.8 90.9
LONG-TERM DEBT, less current portion 476.4 482.8
OTHER LONG TERM LIABILITIES 6.7 6.6
STOCKHOLDERS' EQUITY (DEFICIT) (4.2) (6.5)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $575.7 $573.8