Safelite Glass Corp. Reports Quarter Ended January 1, 2000 Results
16 February 2000
Safelite Glass Corp. Reports Quarter Ended January 1, 2000 Results
COLUMBUS, Ohio, Feb. 14 -- Safelite Glass Corp., the leader
in the automotive glass replacement and repair industry, reported today the
results for its fiscal quarter ended January 1, 2000.
Quarter Ended January 1, 2000 Results
The Company reported total sales of $182.3 million for its fiscal third
quarter ended January 1, 2000, a 2% decrease from $186.0 million in the
quarter ended January 2, 1999. Installation and related services sales of
$172.6 million declined 1% compared with the third quarter of the prior year,
as a result of lower replacement unit sales volume and lower industry pricing,
offset partially by increased repair unit volumes. Overall, market conditions
in the auto glass replacement industry remained soft during the quarter as
market unit volumes were down from the prior year. Wholesale revenues for the
quarter fell approximately $1.1 million to $9.7 million mainly as a result of
lower unit sales.
Safelite's fiscal third quarter earnings before interest, taxes,
depreciation, amortization, restructuring and other one-time charges
("Adjusted EBITDA") was a loss of $2.3 million, compared with earnings of
$0.4 million in the quarter ended January 2, 1999. Adjusted EBITDA was
adversely impacted by the lower industry-wide pricing levels described above,
and a higher mix of network business which carries lower profit margins
compared with work performed at Company owned service centers. Selling,
general and administrative expenses declined 1.2% from the prior year period
as a result of cost reductions implemented in response to market conditions.
The third quarter operating loss was $32.2 million, compared to an operating
loss of $5.2 million for the same quarter of the prior year. Included in this
quarter's operating loss was $24.2 million of restructuring costs related to
the closing of 164 service centers and one national call center, as well as
for reductions in field and corporate administrative activities. Net loss for
the fiscal third quarter was $27.5 million, a $16.3 million increase over the
prior year net loss of $11.2 million.
For the nine months ended January 1, 2000, total sales were
$662.8 million, an increase of $3.7 million or 0.6% over the nine months ended
January 2, 1999. Adjusted EBITDA for the nine months ended January 1, 2000
was $38.2 million, compared to $47.0 million for the nine months ended
January 2, 1999. Net loss for the nine months ended January 1, 2000 was
$25.6 million, an increase in net loss of $15.5 million from the nine months
ended January 2, 1999.
"Third quarter results were disappointing and reconfirm the
appropriateness of our recent restructuring activities," said John F. Barlow,
Safelite's Chief Executive Officer. "While we believe the substantial part of
our restructuring actions are complete, we will continue to evaluate cost
savings opportunities and ways to adapt our business to the challenging market
conditions."
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
January 1, 2000 January 2, 1999
Sales $182.3 $186.0
Cost of sales 146.0 146.2
Gross profit 36.3 39.8
Selling, general &
administrative expenses 44.3 44.9
Restructuring 24.2 --
Operating loss (32.2) (5.1)
Interest expense (11.7) (11.8)
Interest income -- 0.1
Loss before income taxes (43.9) (16.8)
Income tax provision 16.4 5.6
Net loss $ (27.5) $ (11.2)
Depreciation and amortization $ 5.7 $ 5.5
Capital expenditures $ 5.4 $ 7.8
Adjusted EBITDA $ (2.3) $ 0.4
SAFELITE GLASS CORP.
STATEMENTS OF INCOME
($ IN MILLIONS)
Nine Months Ended
January 1, 2000 January 2, 1999
Sales $662.8 $659.1
Cost of sales 497.7 488.6
Gross profit 165.1 170.5
Selling, general &
administrative expenses 144.2 140.7
Other operating expenses (a) -- 3.6
Restructuring 24.2 4.2
Operating income (loss) (3.3) 22.0
Interest expense (34.7) (34.3)
Interest income 0.2 0.4
Income before income taxes (37.8) (11.9)
Income tax benefit 12.2 1.8
Net loss $ (25.6) $ (10.1)
Depreciation and amortization $ 17.4 $ 17.2
Capital expenditures $ 15.0 $ 17.1
Adjusted EBITDA $ 38.2 $ 47.0
(a) Other operating expenses consist of one-time integration costs
associated with the Vistar Merger.
SAFELITE GLASS CORP.
BALANCE SHEETS
($ IN MILLIONS)
January 1, 2000 April 3, 1999
ASSETS
CURRENT ASSETS:
Cash and short term investments $ 0.3 $ 2.9
Accounts receivable, net 54.4 70.3
Inventories 55.3 50.4
Other 17.8 20.0
Total 127.8 143.6
PROPERTY, PLANT AND EQUIPMENT, NET 66.0 64.1
INTANGIBLE ASSETS, NET 273.4 280.8
OTHER 91.9 85.3
TOTAL ASSETS $559.1 $573.8
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 60.9 $ 50.3
Accrued expenses 41.9 36.1
Current portion of long-term debt 5.6 4.5
Total 108.4 90.9
LONG-TERM DEBT, less current portion 469.3 482.8
OTHER LONG TERM LIABILITIES 13.6 6.6
STOCKHOLDERS' EQUITY (DEFICIT) (32.2) (6.5)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $559.1 $573.8