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Earl Scheib Announces First Quarter Fiscal 2000 Results

13 September 1999

Earl Scheib Announces First Quarter Fiscal 2000 Results

    BEVERLY HILLS, Calif.--Sept. 13, 1999--Earl Scheib, Inc. (AMEX:ESH) reported its results for the first quarter ended July 31, 1999. Net sales for the first quarter of fiscal 2000 were $15,759,000, a slight decrease from the first quarter of fiscal 1999 net sales of $15,903,000. However, same shop sales decreased $1,034,000, or 6.7%, from the prior year.
    Operating income for the first quarter of fiscal 2000 was $676,000, a decrease from $1,616,000 in the first quarter of fiscal 1999, primarily due to the adverse effect of the same shop sales decrease, increased material costs and administrative expenses associated with our fleet sales and new-shop expansion activities.
    Net Income for the first quarter of fiscal 2000 was $345,000, or $0.08 cents per diluted share, compared to $1,006,000, or $0.21 per diluted share, for the first quarter of fiscal 1999.
    Chris Bement, Chief Executive Officer and President, stated that "While we are certainly disappointed with the poor results of the quarter, we have implemented new cost control programs and changed our advertising focus in the marketplace. It appears this new focus is helping as same shop sales have increased during August. This is the first time we've seen same shop sales increases since March 1999. We are cautiously optimistic that this revised sales trend, combined with expense reduction measures taken by the Company, will result in improved profitability."
    Earl Scheib, Inc., founded in 1937, is a nationwide operator of 177 auto paint and body shops located in approximately 150 cities throughout the United States.

                          EARL SCHEIB, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Unaudited)

                                       For The Quarter
                                           Ended
                                           July 31,
                                   1999               1998

Net Sales                    $  15,759,000     $  15,903,000
Operating Income                   676,000         1,616,000
Income Before Income Tax           557,000         1,621,000
Income Tax Expense                 212,000           615,000
Net Income                   $     345,000     $   1,006,000
Basic Earnings Per Share     $        0.08     $        0.22
Diluted Earnings Per Share   $        0.08     $        0.21
Weighted Average Shares
  Outstanding -- Basic           4,359,000         4,659,000
Weighted Average Shares
  Outstanding  -- Diluted        4,360,000         4,777,000

    "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 Euro-Paint(R), the impact of advertising and promotional activities, the impact of the Company's expansion, new product roll-out and fleet sales, the potential adverse effects of certain litigation, and the impact of various tax positions taken by the Company.