Excellent quarter! And the record audience for the Oscars is encouraging for the next few quarters.
LANGHORNE, PA --April 2, 1998-- West Coast Entertainment Corporation (NASDAQ: WCEC) today reported revenues for the quarter ended January 31, 1998 of $36.9 million compared with $31 million, an increase of $6 million or 19.2 % for the same period in 1997. The Company also reported earnings before interest, taxes, depreciation and amortization ("EBITDA") of $13.9 million and net income of $1.6 million, or $0.12 per share diluted. Same store sales increased 3%.
Kyle Standley, President and Chief Executive Officer, said, "During the fourth quarter, we believe that West Coast attained the highest marginal rate of profitability of any publicly traded video retailer with an EBITDA margin of 37.8% and a net income margin of 4.4%. Our 4Q EPS of $0.12 per share is virtually equal to reported EPS for companies with revenues and stock prices two and three times greater than ours.
"From an internal growth perspective, our 4Q '97 same store sales of 3% makes two successive quarters of very strong internal growth. This performance comes without any influences from maturing new stores or the overstated effect of revenue sharing on comparable store calculations. Our twelve month historical same store sales of 1% gives West Coast its second straight year of positive historical same store sales."
"We credit our tremendous fourth quarter profitability primarily to our cost cutting measures instituted in August of 1997. We successfully trimmed over $7 million from our corporate and store overhead versus our run rate through the first half of 1997."
"Through the end of March, we have seen continued strong performance from our stores. We believe that the title slate through the summer appears generally favorable versus 1997. West Coast is selectively participating in several of the studio's first and second quarter revenue sharing and copy depth programs to counter similar recent trends among competitors. However, having extensive experience with revenue sharing for many years, we view its effectiveness in increasing retailer profitability with great skepticism, and we are somewhat surprised at the current rush to embrace it among retailers and studios."
The Company reported revenues for the year ended January 31, 1998 of $123.7 million compared with $73.3 million for the year ended January 31,1997. The Company reported a net income loss of $3.6 million, or a loss of $0.26 per share, due to a charge for costs associated with a postponed offering and a change in accounting for amortization of rental inventory, as described in previous filings, compared with $3.5 million, or $0.33 per share for the same period in 1997. Same store sales for the year increased 1%, compared with 5.3% for the year ended January 31, 1997.
Commenting Dick Kelly, West Coast Chief Financial Officer, "Carving out our one-time 1997 charge of $5.1 million for a postponed offering and after adjusting for the difference resulting from a change in amortization of our video inventory, any losses for the year would have been eliminated if the previously mentioned cost cutting measures had been fully in place for the entire year."
Investors are cautioned that the foregoing forward-looking statements concerning the Company's fourth 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 issued on Form 10-K for the year ended January 31, 1998. Forward-looking statements in this release are made under the safe harbor provisions of the Private Securities Reform Act of 1995.
Contact: Steven Apple - 800-433-5171 (sapple@moviebuff.com) |
