Earl Scheib Announces First Quarter Fiscal 2001 Results
11 September 2000
Earl Scheib Announces First Quarter Fiscal 2001 Results
BEVERLY HILLS, Calif.--Sept. 11, 2000--Earl Scheib, Inc. (AMEX:ESH) reported its results for the quarter ended July 31, 2000, the first quarter of fiscal year 2001.Net sales for the first quarter of fiscal 2001 were $15,536,000, a decrease of 1.4% from the first quarter of fiscal 2000 net sales of $15,759,000. Same shop sales decreased slightly less than one percent and the Company operated with six fewer shops than during the first quarter of the prior fiscal year.
Operating income for the first quarter of fiscal 2001 was $546,000, a decrease of $130,000 from $676,000 in the first quarter of fiscal 2000. This decrease was primarily due to the adverse effect of the same shop sales decrease and additional administrative costs related to the establishment of the infrastructure for the Company's initial fleet and truck center (which opened in July 2000) and the Company's new commercial coatings business, partially offset by certain administrative cost reductions.
During the first quarter of fiscal 2001, the Company closed two of its retail automotive paint and body shops, and sold two parcels of real estate for a net gain of $186,000.
Net Income for the first quarter of fiscal 2001 was $606,000, or $0.14 per diluted share, compared to $345,000, or $0.08 per diluted share, for the first quarter of fiscal 2000. During the first quarter of fiscal 2001, the Company utilized a portion of its net operating loss carryforward available for financial statement purposes to offset federal income taxes otherwise payable.
Chris Bement, Chief Executive Officer and President, stated that, "During the first quarter of the current fiscal year, we opened our initial fleet and truck center in Los Angeles. While we have undergone the operational issues typical in any start-up of a new facility, we have gained invaluable experience to apply to future fleet and truck centers and we will continue to improve our processes and become more efficient. Most important is the very favorable market acceptance of this first center. We are pleased with this initial market reaction and we currently anticipate opening two more centers during the current fiscal year.
"Also, during the first quarter, we increased our efforts in the marketing of our high quality, low VOC commercial coatings to industrial users. This line of coatings is manufactured at our Springfield, Missouri plant. While revenues from this new business segment have been minimal to-date, our marketing efforts have generated a significant number of potential customers. We will continue to strengthen our ability to reach this market in order to capitalize on what we believe is a significant opportunity for the Company.
"The quarterly results for the retail automotive paint and body shops were disappointing, as same shop sales continued their decline. We continually evaluate the way we do business in this sector in order to achieve the right formula for success. For example, we intend to provide more collision repair and spot jobs in our existing retail shops in order to adapt to the retail automotive paint market's gradual shift away from total paint jobs. While we believe that there will always be a demand for a total paint job, the original Earl Scheib niche, we need to adjust to the changing market.
"We look forward to reporting the results of our efforts to you in the future."
EARL SCHEIB, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For The Quarter
Ended
July 31,
2000 1999
Net Sales $15,536,000 $15,759,000
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Operating Income 546,000 676,000
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Income Before Income Taxes 627,000 557,000
Provision For Income Taxes 21,000 212,000
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Net Income $ 606,000 $ 345,000
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Basic Earnings Per Share $ 0.14 $ 0.08
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Diluted Earnings Per Share $ 0.14 $ 0.08
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Weighted Average Shares
Outstanding - Basic 4,359,000 4,359,000
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Weighted Average Shares
Outstanding - Diluted 4,359,000 4,360,000
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