Earl Scheib Announces Third-Quarter Fiscal 2000 Results
13 March 2000
Earl Scheib Announces Third-Quarter Fiscal 2000 Results
BEVERLY HILLS, Calif.--March 13, 2000--Earl Scheib Inc. (AMEX:ESH) reported its results for the third quarter ended Jan. 31, 2000.Historically, the third quarter has always been the company's most difficult quarter because of adverse winter weather and the holiday season.
Net sales for the third quarter of fiscal 2000 were $10,516,000, an increase of 6.3 percent from the third quarter of fiscal 1999 net sales of $9,895,000, and same shop sales increased 2.8 percent from the prior year.
For the nine months ended Jan. 31, 2000, net sales were $41,903,000, as compared with $40,563,000 for the comparable period in the prior fiscal year, an increase of 3.3 percent.
However, same shop sales decreased 2.4 percent from the same period in the prior year.
The operating loss for the third quarter and nine months of fiscal 2000 was $2,250,000 and $711,000, as compared with an operating loss of $1,768,000 and operating income of $825,000, respectively, for the same periods of fiscal 1999.
The deterioration in the third-quarter operating results was primarily due to increased production expenses and incurred costs totaling $656,000 related to both the closure of nine shops and an additional reserve requirement for workers' compensation claims filed prior to August 1998.
The net loss for the third quarter and nine months of fiscal 2000 was $1,953,000 and $1,148,000, or 45 cents and 26 cents loss per diluted share, respectively, compared with a net loss of $1,193,000 and net income of $400,000, or 27 cents loss and 9 cents earnings per diluted share, for the third quarter and nine months of fiscal 1999, respectively.
The company was not able to recognize approximately $450,000 of income tax benefit for its operating loss in the third quarter of fiscal 2000 since the realization is not assured.
Chris Bement, chief executive officer and president, stated that "The adverse effect in the third quarter of nine shops being closed and the additional reserve for workers' compensation claims masked what would have been improved operating results from the third quarter in the prior year.
"Our continuing evaluation of the performance of existing retail shops will most likely entail additional shop closures, which would impact future results. We intend to concentrate our efforts in those geographic areas where the company has been historically profitable. During the current fiscal year, through Jan. 31, 2000, we have opened five new retail shops and plan to open three more by April 30, 2000."
Bement further stated, "Even more significantly, we believe that the key to increasing the value of the company for our shareholders is to focus on growing our fleet sales and commercial coatings business."
Earl Scheib, founded in 1937, is a nationwide operator of 170 auto paint and body shops located in approximately 140 cities throughout the United States.
"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 or closing of shops, new product roll-out, fleet operations and commercial coatings business, the potential adverse effects of certain litigation, and the impact of various tax positions taken by the company. -0-
EARL SCHEIB INC.
Condensed Consolidated Statements of Operations
For the Quarter For the Nine Months
Ended Jan. 31, Ended Jan. 31,
2000 1999 2000 1999
Net sales $10,516,000 $9,895,000 $41,903,000 $40,563,000
Operating income
(loss) (2,250,000) (1,768,000) (711,000) 825,000
Income (loss)
before tax (2,423,000) (1,959,000) (1,126,000) 619,000
Tax Provision
(benefit) (470,000) (766,000) 22,000 219,000
Net income (loss) $(1,953,000) $(1,193,000) $(1,148,000) $400,000
Basic earnings
(loss) per share $(0.45) $(0.27) $(0.26) $0.09
Diluted earnings
(loss) per share $(0.45) $(0.27) $(0.26) $0.09
Weighted Average
Shares Outstanding
-- Basic 4,359,000 4,359,000 4,359,000 4,483,000
Weighted Average
Shares Outstanding
-- Diluted 4,359,000 4,359,000 4,359,000 4,581,000