Weiner's Stores Inc. Reports Second Quarter and First Six Months of 2000 Results of Operations
HOUSTON--(BUSINESS WIRE)--Aug. 17, 2000--Weiner's Stores Inc.
(OTCBB:WEIR) announced a net loss of $5.0 million, or $0.27 per share
of common stock for its second quarter ended July 29, 2000 compared to
net income of $0.5 million, or $0.03 per share of common stock, for
the second quarter of 1999. Net loss for the six months ended July 29,
2000 was $5.2 million, or $0.28 per share of common stock, prior to a
cumulative effect adjustment for a change in accounting compared to
net income of $2.5 million or $0.14 per share of common stock for the
first six months of 1999. Net loss for the first six months of 2000
was $5.5 million or $0.29 per share of common stock including the
cumulative effect adjustment.
Sales for the Company's second quarter and first six months ended
July 29, 2000 decreased 21.6% and 13.7%, respectively, compared to the
same periods last year. Comparable store sales for the second quarter
and first six months ended July 29, 2000 decreased 26.1% and 17.9%,
respectively, compared to the same periods last year.
Mr. Raymond J. Miller, president and chief executive officer,
stated, "We are extremely disappointed with the results for the second
quarter and first six months of fiscal year 2000. Our customers
responded in a favorable manner to Misses' tops and bottoms, Women's
denim jeans, off-price designer fragrances, Bed Bath Etc, toys,
electronics, Men's and Kid's basics and Men's woven shirts.
Unfortunately, these businesses were not able to offset the continued
sales decline in branded athletic shoes, Levi's(R) products, branded
athletic apparel in all genders and the general softness in all
apparel areas, including especially soft sales in Men's and Kids'
classifications. Additionally, we have incurred increased selling and
administrative costs relative to the ten new stores. These stores are
not mature; their contribution to overhead to date therefore is very
low."
Mr. Miller also stated, "In the first six months of fiscal 2000
and in the important back-to-school period of the second quarter, the
Company has de-emphasized the use of 'free layaway' due to both the
change in revenue recognition rules and the high layaway cancellation
rates that we experienced last year. The reduction in layaway
transactions in the second quarter and first half of 2000 as they
relate to the same periods last year, are expected to result in a
higher layaway fulfillment percentage in August thus recording higher
sales as compared to the same period last year."
Mr. Miller further stated, "Due to the SEC's mandated change in
fiscal year 2000 in revenue recognition of layaway sales and leased
department sales, sales and earnings are not comparable to last year.
As of the end of the second quarter and first six months of fiscal
year 2000, the Company has deferred approximately $7.5 million and
$8.3 million in layaway sales, respectively, to future periods and has
not recorded approximately $1.1 million and $2.1 million,
respectively, in leased department sales. Had these changes in revenue
recognition rules not occurred, the sales decrease for the first six
months of fiscal 2000 would have been 6.7%.
Mr. Miller further stated, "The Company expects to return to a
comparable store sales increase in the fall season based on the
deferred layaway sales that are expected to be recorded in the August
period, the expansion of private label products in the Men's, Women's,
and Kids' area that are expected to offer excellent quality at great
prices and the expansion of the Bed Bath Etc departments, a segment of
retailing that continues to experience strong growth."
The Company previously announced that it had amended its $40.0
million Revolving Credit Agreement on July 18, 2000. The amendment,
among other things, revised certain financial covenant tests based on
the sales and EBITDA trend of fiscal 2000. The Company is in full
compliance with the Revolving Credit Agreement, as amended.
Weiner's is a convenient neighborhood family retailer that offers
a complete assortment of branded products for value-conscious
consumers. Currently, approximately 3,700 associates are employed at
the 141 stores that are operated in Texas, Louisiana, Mississippi,
Arkansas and Alabama. Visit our Web site at www.weiners.com.
This press release contains forward-looking statements. Such
statements inherently are subject to a variety of risks and
uncertainties that could cause actual results to differ materially
from those projected. Such risks and uncertainties include, among
others, general economic and business conditions, changes in foreign,
political, social and economic conditions, regulatory initiatives and
compliance with governmental regulations, the ability of the Company
and its competitors to predict fashion trends and customer preferences
and achieve further market penetration and additional customers,
consumer apparel buying patterns, adverse weather conditions,
inventory risks due to shifts in market demand and various other
matters, many of which are beyond the Company's control. These
forward-looking statements speak only as of the date of this press
release. The Company expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any forward-looking
statement contained herein to reflect any change in the Company's
expectations with regard thereto or any change in events, conditions
or circumstances on which such statement is based.
WEINER'S STORES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
Thirteen Thirteen Twenty-six Twenty-six
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
July 29, July 31, July 29, July 31,
2000 1999 2000 1999
Total Net Sales $62,478 $79,533 $128,685 $149,135
Leased Department Revenue 227 -- 442 --
------- ------- -------- --------
Total Revenue 62,705 79,533 129,127 149,135
Cost of good sold 42,007 55,181 84,362 100,361
Gross margin 20,698 24,352 44,765 48,774
Selling, Administrative
and other
operating costs 25,148 23,539 48,984 45,718
Operating (Loss) Income (4,450) 813 (4,219) 3,056
Interest Expense (548) (350) (945) (560)
------- ------- -------- --------
(Loss) Income before
income taxes (4,998) 463 (5,164) 2,496
Income taxes -- -- -- --
------- ------- -------- --------
(Loss) Income before
cumulative effect
adjustment (4,998) 463 (5,164) 2,496
Cumulative effect
adjustment, net of
zero tax -- -- (294) --
------- ------- -------- --------
Net (Loss) Income $(4,998) $463 (5,458) 2,496
Net (Loss) Income Per
Share of Common Stocks $(0.27) $0.11 (0.28) 0.11
Weighted average number
of Shares of Common
Stock outstanding 18,510 18,487 18,510 18,482
WEINER'S STORES INC
CONSOLIDATED CONDENSED BALANCE SHEETS
July 29, Jan. 29, July 31,
2000 2000 1999
(Unaudited) (Unaudited)
(amounts in thousands)
ASSETS
Cash $5,483 $3,336 $8,478
Receivables, net 1,731 1,100 12,530
Merchandise inventories, net 64,716 57,293 58,301
Prepaid expenses and
other assets 2,986 3,287 3,726
Property and equipment, net 23,518 21,046 20,103
Reorganization value in
excess of assets, net 3,468 3,612 3,756
Total assets $101,902 $89,674 $106,894
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and other
current liabilities $33,120 $29,433 $33,024
Other liabilities 397 397 397
Long-term debt 24,000 10,000 18,000
Stockholder's equity 44,385 49,844 55,473
Total liabilities and
stockholder's liabilities $101,902 $89,674 $106,894 |
