Easyriders Reports Results for Three Months Ended Sept. 30, 1999
16 November 1999
Easyriders Reports Results for Three Months Ended Sept. 30, 1999; Continuing Strong Performance Across Operating Units; However, Extraordinary Costs Push EBITDA Negative
AGOURA HILLS, Calif.--Nov. 15, 1999--Easyriders Inc. (AMEX:EZR) Monday announced that for the three-month operating period ended Sept. 30, 1999, the company recorded revenues of $11.6 million, which generated a loss of $3.3 million, or $0.15 per share, compared with revenues of $1.4 million and a loss of $1.9 million, or $0.19 per share, during the same period a year earlier.Cash flow as measured by EBITDA was a negative $1.5 million, which was the same amount as for the third quarter of 1998.
For the nine-month operating period ended Sept. 30, 1999, the company reported revenues of $33.7 million, which produced a loss of $8.8 million, or a loss of $0.41 per share, compared with revenues of $2.2 million and a loss of $7.1 million, or $0.78 per share, during the same period a year earlier.
EBITDA was a negative $3.1 million compared with a negative $3.7 million reported for the same period a year earlier. Professional and legal fees, along with other non-recurring costs, aggregated $1.6 million and $3.3 million, respectively, for the three- and nine-month operating periods ended Sept. 30, 1999.
"Had it not been for certain extraordinary expenses we would have reported a positive EBITDA this quarter, and for the nine-month operating period," said Bill Prather, president and chief executive officer of Easyriders.
"The principal contributions to our negative operating results continue to be legal and professional fees, primarily for defending against two previously reported litigation matters, and also other unusual, one-time charges such as pre-opening expenses for the El Paso Bar-B-Que in Tulsa, Okla., business unit restructuring costs and personnel reduction expenses.
"We continue to have strong performance of our core operating units, Paisano Publications, and the El Paso Bar-B-Que restaurant chain, where same-store sales increased 5.8 percent for the quarter and 5.4 percent year-to-date," said Prather. "We are also encouraged that EPS continues its improving trend. Additionally, recent actions have been taken which we believe will result in further revenue and profitability improvements in the months ahead."
"Extraordinary and unexpected expenses have prevented our company from realizing its full potential this quarter. However, several new strategies will soon be announced which we believe will have positive near-term impact, and litigation expenses are not expected to be nearly as heavy in the months ahead," said John Martin, chairman of Easyriders.
"Consequently, we remain confident that the key elements of our business -- which include a strong publishing foundation, several powerful brands, an exciting restaurant concept, and a growing network of retail distribution points -- will soon begin producing the results anticipated when Easyriders Inc. came into existence just over a year ago."
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 Nine Months
Ended Sept. 30, Ended Sept. 30,
1999 1998 1999 1998
(unaudited) (unaudited)
Sales $ 11,643,932 $ 1,416,563 $ 33,692,909 $ 2,240,718
Cost of Sales 9,613,755 831,990 26,981,972 1,218,954
Gross Margin 2,030,177 584,573 6,710,937 1,021,764
Expenses:
Selling, general
and
administrative 3,740,591 1,570,602 9,957,553 3,617,625
Depreciation and
amortization 796,660 109,543 2,348,605 232,531
Stock Issuance
Expenses 100,000 -- 700,000 1,888,867
Loss on Sale of
Restaurant to
Related Party -- 467,774 -- 1,099,760
Total Expenses 4,637,251 2,147,919 13,006,158 6,838,783
Loss from
Operations (2,607,074) (1,563,346) (6,295,221) (5,817,019)
Other Income
(Expense) 208,835 6,269 184,443 6,269
Interest Expense (906,891) (380,812) (2,679,323) (1,324,313)
Loss Before
Provision for
Income Taxes (3,305,130) (1,937,889) (8,790,101) (7,135,063)
Provision for
Income Taxes 2,075 -- 6,225 --
Net Loss $(3,307,205) $(1,937,889) $(8,796,326) $(7,135,063)
Comprehensive
Loss $(3,307,205) $(1,937,889) $(8,796,326) $(7,135,063)
Net Loss Per
Share --
Basic and
Diluted $(0.15) $(0.19) $(0.41) $(0.78)
Weighted Average
Number of Shares
Outstanding --
Basic And
Diluted 22,521,173 10,012,929 21,232,493 9,143,064
EBITDA $(1,501,579) $(1,447,534) $(3,062,173) $(3,689,352)