Easyriders Reports Results for Three Months Ended June 30, 1999
16 August 1999
Easyriders Reports Results for Three Months Ended June 30, 1999; Strong Performance Across Operating Units, but Litigation Costs and Write-Offs Push EBITDA Negative
AGOURA HILLS, Calif.--Aug. 13, 1999--Easyriders Inc. (AMEX:EZR) Friday announced that for the three-month operating period ended June 30, 1999, the company recorded revenues of $11 million, which generated a loss of $3.6 million, or $0.17 per share, compared with revenues of $0.6 million and a loss of $4 million, or $0.23 per share, during the same period a year earlier.Cash flow as measured by EBITDA was a negative $1.4 million, which was the same amount as for the second quarter of 1998.
For the six-month operating period ended June 30, 1999, the company reported revenues of $22 million, which produced a loss of $5.5 million, or a loss of $0.27 per share, compared with revenues of $0.8 million and a loss of $5.2 million, or $0.30 per share, during the same period a year earlier.
Legal and professional fees aggregated $1.2 million and $1.7 million, respectively, for the three- and six-month operating periods ended June 30, 1999. The company also discontinued certain operations, which resulted in $0.3 million of non-recurring write-offs during the quarter ended June 30, 1999.
"We would have reported a positive EBITDA this quarter had it not been for certain extraordinary expenses," said Bill Prather, president and chief executive officer of Easyriders.
"As it turned out, legal and professional fees, primarily for defending against two litigation matters, were significantly higher than we could have anticipated. It is disappointing to continue incurring expenses in defending against litigation that we believe is without merit, but obviously we have no choice.
"What is most encouraging is the continued strong performance of our core operating units, Paisano Publications, and the El Paso Bar-B-Que restaurant chain, which both exceeded their respective plans for these past six months," added Prather.
The company also noted that it has taken a number of steps recently to further improve the revenue and profitability of these units and the retail and franchising operations.
"We are delighted to see our operational fundamentals continuing to make such strong progress," said John Martin, chairman of Easyriders.
"The non-recurring costs have obviously had a disappointing impact on this quarter, but the real and tangible achievements of our operating units are plain to see and they suggest an even brighter future. Once we get through the present litigation, our performance should be able to impact fully on our bottom line."
About Easyriders
Easyriders is a publicly traded, diversified company with publishing, retail, restaurant and entertainment interests dedicated to serving the independent, free-spirited motorcycling and related lifestyles market.
Easyriders currently publishes more than a dozen popular motorcycle, special-interest and lifestyle magazines, with a total worldwide readership of more than 6 million. The company also owns, operates and franchises Easyriders retail stores throughout the United States, and owns and operates the El Paso Bar-B-Que restaurant chain.
Statements contained in this news release regarding future financial performance and results and other statements that are not historical facts constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
(unaudited) (unaudited)
SALES $ 11,017,265 $ 609,992 $ 22,048,977 $ 824,155
COST OF SALES 8,153,837 322,172 16,174,705 386,964
GROSS MARGIN 2,863,428 287,820 5,874,272 437,191
EXPENSES:
Selling, general, and
administrative 4,119,625 1,093,361 7,456,039 2,047,023
Depreciation and
amortization 782,796 59,665 1,551,945 122,988
Stock issuance expenses 600,000 1,888,867 600,000 1,888,867
Loss on sale of restaurant
to related party -- 631,986 -- 631,986
Total expenses 5,502,421 3,673,879 9,607,984 4,690,864
LOSS FROM OPERATIONS (2,638,993) (3,386,059) (3,733,712) (4,253,673)
OTHER INCOME (EXPENSE) (146,196) -- 21,173 --
INTEREST EXPENSE (861,438) (580,122) (1,772,432) (943,501)
LOSS BEFORE PROVISION
FOR INCOME TAXES (3,646,627) (3,966,181) (5,484,971) (5,197,174)
PROVISION FOR INCOME
TAXES 2,075 -- 4,150 --
NET LOSS $(3,648,702) $(3,966,181) $(5,489,121)$(5,197,174)
COMPREHENSIVE LOSS $(3,648,702) $(3,966,181) $(5,489,121)$(5,197,174)
NET LOSS PER SHARE
-- BASIC AND DILUTED $ (0.17) $ (0.23) $ (0.27) $ (0.30)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING -- BASIC
AND DILUTED 21,845,482 17,545,283 20,577,473 17,401,846
EBITDA $(1,402,393) $(1,437,527) $(1,560,594)$(2,241,818)