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Down to 3 1/2 today. I have no idea why.
Pro-forma net earnings of .54 and 10 P/E gets you close to $6 share price. 52 Week HI of 13 1/2.
RECENT NEWS:
West Coast Reports Increase of 42% Over Prior Year Pro
Forma Earnings Per Share on Annual Pro Forma
Earnings of $.54 Per Share
Company Announces Intent to Acquire 126 Corporate Stores And Two
Additional Franchise Systems
PHILADELPHIA, April 23 /PRNewswire/ -- West Coast Entertainment Corporation
(Nasdaq:WCEC) today announced pro forma earnings of $.54 per share for its fiscal year ended
January 31, 1997, a 42% increase over pro forma earnings of $.38 per share for the prior fiscal year
as reported in the company's initial public offering (IPO) registration statement. This increase is
primarily attributable to acquisitions made by the company since IPO.
Pro forma earnings per share for the quarter ended January 31, 1997, were $.16 per share. This
increase is also primarily attributable to acquisitions made by the company since IPO.
The company's pro forma revenues for the quarter ended January 31, 1997, were $31.7 million, and
pro forma revenues for the fiscal year ended January 31, 1997, were $115.7 million, a 41%
increase vs. pro forma revenues for the prior year for the company at IPO. Again, this increase is
primarily attributable to acquisitions made by the company since IPO.
West Coast's Chief Financial Officer Richard Kelly, said, ``In addition to strong real growth in free
cash flow for the company as a whole, operating economies and efficiencies have resulted in the 172
stores acquired at IPO showing actual free cash flow margin improvements of nearly 30% from the
date of acquisition through January 31, 1997 vs. pro forma free cash flow for the prior year.'' Free
cash flow is defined as EBIDTA less rental purchases.
West Coast also announced today its intent to raise additional debt and bank financing in connection
with the proposed acquisition of an additional 126 corporate stores as well as franchise systems in
Canada and Australia comprising 141 franchise stores. Management anticipates these acquisitions to
occur during the first half of West Coast's second fiscal quarter.
West Coast President and Chief Executive Officer, Kyle Standley, commented that, ``We are very
pleased with our growth and operational performance during our first seven and one-half months as
a public company. We have transformed our franchising business into an area development focus,
and we stand poised to roll out what we consider to be the industry's most innovative and exciting
new store design. During the fiscal year ending January 31, 1998, West Coast will add new store
construction and relocation to its growth mix, with as many as 70 corporate and franchise stores to
be delivered in the fiscal year ahead.''
As a result of acquisitions completed during the fourth quarter, West Coast's store count increased
by 47 corporate stores, raising the total to 264 corporate stores. The total number of franchised
stores at quarter end was 267.
Historic same store sales for the quarter ended January 31, 1997 increased 1.8% over the same
period in the prior year and were up 5.3% for fiscal year ended January 31, 1997 over the prior
year. Pro forma comparable store sales increased by 3% for the fourth quarter ended January 31,
1997, and 1% for the fiscal year ended January 31, 1997. Mr. Kelly, stated that ``because of West
Coast's large percentage of mature stores, we expect our comparable store sales and earnings for
current fiscal year (ending January 31, 1998) to continue to fluctuate on a quarterly basis due to
influences such as the timing and quality of product release and the weather. Despite this, we expect
pro forma comparable store sales growth for this fiscal year to exceed the 1% growth in the year
ended January 31, 1997.''
Historical earnings before extraordinary items were $.35 per share as compared to $.07 per share
for the year ended January 31, 1996, a 400% increase. Revenues increased by $58.6 million to
$73.3 million for year ended January 31, 1997, a 398% increase. Historical earnings per share for
the quarter ended January 31, 1997, were $.14 per share vs. $.03 per share historically for the
quarter ended January 31, 1996.
West Coast owns, operates and franchises 531 stores and had pro forma revenues of $115.7
million for the year ended January 31, 1997 and estimates 12-month system-wide revenues
(including revenues of its 267 franchisees) of approximately $223 million.
Investors are cautioned that the foregoing forward-looking statement concerning the company's
anticipated first quarter results and its long-term prospects are subject to risks and uncertainties that
could cause actual results to differ materially, including the risk factors that are discussed from time
to time in the company's SEC reports, including, but not limited to, the report that will be issued on
Form 10K for the year ended January 31, 1997. In addition, no assurances can be given that the
company's actual results for the first quarter of 1997 will not differ materially from the expected
results discussed above. Forward-looking statements in this release are made under the safe harbor
provisions of the Private Securities Reform Act of 1995.
West Coast Entertainment Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
Unaudited Pro Forma Results
Twelve Months Ended
January 31, Increase/ Percent
1997 1996 (Decrease) Change
Revenue:
Rental revenue $95,745 $88,347 $7,398 8.4%
Merchandise sales 15,552 15,760 (208) -1.3%
Franchise Fees 4,444 5,910 (1,466) -24.8%
Total Revenues 115,741 110,017 5,724 5.2%
Operating costs and expenses 100,688 99,286 1,402 1.4%
Operating Income 15,053 10,731 4,322 40.3%
Other Income (expenses):
Interest expense (2,191) (1,960) 231 11.8%
Other Income 165 964 (799) -82.9%
Income before taxes and
extraordinary item 13,027 9,735 3,292 33.8%
Income taxes (5,539) (4,332) 1,207 27.9%
Net income before
extraordinary item 7,488 5,403 2,085 38.6%
Extraordinary item
(net of tax) (244) -- 244 100.0%
Net income $7,244 $5,403 1,841 34.1%
Net income per share before
extraordinary item $0.54 $0.39 $0.15 38.5%
Net income per share $0.52 $0.39 $0.13 33.3%
Weighted average shares
outstanding 13,966 13,987 1 0.0%
Same store revenue increase 1% 1% -- --
Twelve Months Ended
January 31, Increase/ Percent
1997 1996 (Decrease) Change
Revenue:
Rental revenue $24,673 $21,741 $2,932 13.5%
Merchandise sales 5,481 5,450 31 0.6%
Franchise Fees 1,520 1,572 (52) -3.3%
Total Revenues 31,674 28,763 2,911 10.1%
Operating costs and expenses 27,107 27,747 (640) -2.3%
Operating Income 4,567 1,016 3,551 349.5%
Other Income (expenses):
Interest expense (658) (583) 75 12.9%
Other Income 48 (222) (270) -121.6%
Income before taxes and
extraordinary item 3,957 211 3,746 1775.4%
Income taxes (1,688) (297) 1,391 468.4%
Net income before
extraordinary item 2,269 (86) 2,355 2738.4%
Extraordinary item
(net of tax) -- -- 0 0.0%
Net income $2,269 ($86) 2,355 2738.4%
Net income per share before
extraordinary item $0.16 ($0.01) $0.17 1700.0%
Net income per share $0.16 ($0.01) $0.17 1700.0%
Weighted average shares
outstanding 13,988 13,987 1 0.0%
Same store revenue increase 3% -- -- --
West Coast Entertainment Corporation
Consolidated Balance Sheet
(in thousands, except per par value)
January 31,
1997 1996
ASSETS
Current assets:
Cash and cash equivalents $1,311 $611
Receivables 1,899 1,085
Merchandise inventories 6,333 504
Prepaid expenses and other current assets 2,046 151
Receivable from officers 141 --
Total current assets 11,730 2,351
Videocassettes rental inventory, net 24,598 1,509
Furnishings, equipment and
leasehold improvements, net 11,285 1,235
Other assets 2,998 4,258
Intangible assets, net 109,193 6,967
Deferred tax asset 160 195
Total assets $159,964 $16,515
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $19 $2,091
Accounts payable 12,941 1,327
Accrued expenses 4,647 4,686
Income taxes payable 1,555 760
Advances from shareholders -- 7
Deferred lax liability 566 --
Total current liabilities 19,728 8,871
Long-term debt 32,802 7,101
Other long-term liabilities 299 --
Total liabilities 52,829 15,972
Commitments -- --
Stockholders' equity:
Common stock ($0.01 par value, 13,770 shares
outstanding as of January 31, 1997 and 14,000
shares at January 31, 1996) 138 140
Additional paid in capita1 103,947 819
Retained earnings 3,050 (416)
Total stockholders' equity 107,135 543
Total liabilities and stockholders' equity $159,964 $16,515
West Coast Entertainment Corporation
Consolidated Statements of Operations
(in thousands, except per share data)
ACTUAL RESULTS
Twelve Months Ended
January 31, Increase/ Percent
1997 1996 Decrease Change
Revenue:
Rental revenue $58,728 $9,209 $49,519 537.7%
Merchandise sales 9,795 2,299 7,496 326.1%
Franchise Fees 4,770 3,211 1,559 48.6%
Total Revenues 73,293 14,719 58,574 397.9%
Operating costs
and expenses:
Store operating
expenses 32,880 6,234 26,646 427.4%
Cost of goods sold 6,527 1,384 5,143 371.6%
Amortization of rental
inventory 11,265 1,972 9,293 471.2%
Selling, general and
administrative 11,146 3,659 7,489 204.7%
Amortization of
intangible assets 3,420 254 3,166 1246.5%
Operating Income 8,053 1,216 6,837 562.3%
Other income (expenses):
Interest expense (1,294) (640) 654 102.2%
Other income 178 -- 178 100.0%
Income before taxes
and extraordinary item 6,937 576 6,361 1104.3%
Income taxes (3,227) (242) 2,985 1233.5%
Net income before
extraordinary item 3,710 334 3,376 1010.8%
Extraordinary item
(net of tax) (244) -- 244 100.0%
Net income $3,466 $334 $3,132 937.7%
Net income per share
before extraordinary
item $0.35 $0.07 $0.28 400.0%
Net income per Share $0.33 $0.07 $0.26 371.4%
Weighted average shares
outstanding 10,554 4,756 5,798 121.9%
Store counts:
Owned 264 28 236 --
Franchised 267 304 (37) --
Total 531 332 199 --
Same store revenues
increase 5.3% 4.8% -- --
West Coast Entertainment Corporation
Consolidated Statements of Operations
(in thousands, except per share data)
ACTUAL RESULTS
Three Months Ended
January 31, Increase/ Percent
1997 1996 (Decrease) Change
Revenue:
Rental revenue $24,955 $2,548 $22,407 879.4%
Merchandise sales 4,998 992 4,006 403.8%
Franchise Fees 977 1,419 (442) -31.1%
Total Revenues 30,930 4,959 25,971 523.7%
Operating costs
and expenses:
Store operating
expenses 13,541 1,657 11,884 717.2%
Cost of goods sold 3,394 702 2,692 383.5%
Amortization of rental
inventory 4,864 488 4,376 896.7%
Selling, general and
administrative 3,524 1,483 2,041 137.6%
Amortization of
intangible assets 1,391 116 1,275 1099.1%
Operating Income 4,216 513 3,703 721.8%
Other income (expenses):
Interest expense (564) (253) 311 122.9%
Other income 49 -- 49 100.0%
Income before taxes and
extraordinary item 3,701 260 3,441 1323.5%
Income taxes (1,806) (112) 1,694 1512.5%
Net income before
extraordinary item 1,895 148 1,747 1180.4%
Extraordinary item
(net of tax) -- -- 0 0.0%
Net income $1,895 $148 $1,747 1180.4%
Net income per share
before extraordinary
item $0.14 $0.03 $0.11 366.7%
Net Income per share $0.14 $0.03 $0.11 366.7%
Weighted average shares
outstanding 13,614 4,756 8,858 186.2%
Store counts:
Owned -- -- -- --
Franchised
Total -- -- -- --
Same store revenues
increase 1.8% -- -- -- |
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