"or David Olson of Summit Financial Relations, Inc., 720-489-8873, summitfr@hotmail.com "
Creative Host Services, Inc. Announces Third Quarter Results, Reports Profits of $.03 in 2000 versus 01 During the Like Period 1999
SAN DIEGO, Nov. 15 /PRNewswire/ -- Creative Host Services, Inc.'s (Nasdaq: CHST) today announced its results for the third quarter and nine months ended September 30, 2000. Revenues for the three months ended September 30, 2000 were $5,704,085 compared to $4,875,642 for the three months ended September 30, 1999, an increase of $828,443 or 17%. Net income for the third quarter 2000 were $178,075, or $.03 per share compared to net income of $38,848 or $.01 for the like period in 1999. For the nine months ended September 30, 2000 the Company reported overall sales of $15,220,768 and net income of $253,153 or $.04 per share. This compares to sales of $13,322,078 and a loss of $(84,854) or $(.02) per share for the nine months ended September 30, 1999.
Same store sales for the concession locations that were open for the full nine-month period of both 1999 and 2000 increased 7.1% from $13,333,898 to $14,277,146. The Company realized a decrease in interest expense to $315,210 for the nine months ended September 30, 2000 from $521,893 for the nine months ended September 30, 1999. The decrease in interest expense is related primarily to the conversion of $3,000,000 of notes into common stock. Thus also reducing the Company's overall debt. On an ongoing basis management believes that net income from existing operations should increase commensurate with cost savings that result from economies of scale and efficiencies and sales increases that are obtained as locations opened over the last two years mature. Additionally, the Company has more than $800,000 annualized of equipment leases that will mature in each of the next three years.
For the nine months ended September 30, 2000, EBITDA increased to $1,430,908 from $1,139,365 for the nine months ended September 30, 1999, an increase of 25%. For the third quarter ended September 30, 2000, EBITDA increased to $552,455 from $412,648 for the corresponding period of 1999. The increase in EBITDA is related to corresponding reductions in overall costs of operations. Management anticipates that this trend should continue to improve. For the nine months ended September 30, 2000, Creative Host Services had working capital of $3,230,256 compared to a working capital deficit of $(1,170,367) for the nine months ended September 30, 1999. As of September 30, 2000, the Company has reduced its overall debt from approximately $7,200,000 at January 1, 2000 to approximately $3,600,000. At present Creative Host has increased its overall equity position from approximately $5,200,000 at the end of September 30, 1999, to $12,600,000 currently. The Company has done so by selling equity in several private placements and through the exercise of warrants issued at the Company's initial public offering in July 1997.
In September 2000 Creative Host entered into a purchase agreement with the shareholders of GladCo Enterprises, Inc., and several small affiliated companies that are in the airport concessions industry. Pursuant to the agreement, the Company paid $6,903,638 in cash and common stock and assumed debt in the amount of $96,362 in exchange for all of the outstanding shares of GladCo. The transaction became effective October 8, 2000. The acquisition is expected to increase overall sales to more than $35,000,000 in 2001, and combined, the two companies expect EBITDA of approximately $5,000,000.
Creative Host Services, Inc./GladCo Enterprises, Inc. are engaged in the business of acquiring, managing and operating airport concessions such as food and beverage, news and gift, and other concessions throughout the United States. In addition, the Company also provides in-flight catering to certain national airlines at 9 of its airport locations and also manages Airline Clubs. Six of the Company's operating concessions are food-courts, each consisting of several food and beverage restaurants that are located within each court. If the various food courts were separated and counted as individual concessions, Creative Host/Gladco operate approximately 95 concessions overall. To simplify accounting, the Company counts these food-courts as one concession. Creative Host Services, Inc. enjoys co-branding relationships with several national and regional companies such as Carl's Jr., Schlotzky's Deli, TCBY Yogurt, Samuel Adams Brew Pubs, Mrs. Fields Cookies, Pretzelmaker, Nathan's Famous Hotdogs, and Hot Licks Bar & Grill. GladCo has an agreement with the Nation's oldest brewery, Yuengling Brewery, to be implemented in a future Pennsylvania airport. Interested parties may review disclosure documents filed by the Company at the Securities and Exchange Commission site, freeedgar.com using the symbol CHST.
Statements in this news release that are not descriptions of historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as "expect," "intends," "believes," "plans," anticipates" and "likely" also identify forward-looking statements. All forward-looking statements are based on current facts and analyses. Actual results may differ materially from those currently anticipated due to a number of factors including, but not limited to history of operating losses, anticipated future losses, competition, future capital needs, the need for market acceptance, dependence upon third parties, disruption of vital infrastructure and intellectual property rights. All forward-looking statements are made pursuant to the Securities Litigation Reform Act of 1995. Additional information on factors that may affect the business and financial results of the Company can be found in filings of the Company with the Securities and Exchange Commission.
Please visit us on our Website @ www.creativehostservices.com
For Further Information Contact: Sayed Ali, President/Chairman of the Board of Creative Host Services, Inc., 858-587-7300; or David Olson of Summit Financial Relations, Inc., 720-489-8873, summitfr@hotmail.com
Creative Host Services, Inc.
Financial Summary
(Three and Nine Months Ended September 30, 2000)
3 months 3 months 9 months 9 months
ended ended ended ended
9/30/99 9/30/00 9/30/99 9/30/00
Revenues:
Airport Concessions $4,814,101 $5,630,464 $13,322,078 $15,220,768
Food Preparation
Center Sales 45,306 62,397 160,399 125,966
Franchise Royalties 16,235 11,224 47,967 35,913
Total Revenues $4,875,642 $5,704,085 $13,530,444 $15,382,647
Cost of Goods Sold 1,554,743 1,876,529 4,214,540 4,928,572
Gross Profit $3,320,899 $3,827,556 $9,315,904 $10,454,075
Operating Costs and
Expenses
Payroll and Other
Employee Benefits 1,514,301 1,827,575 4,333,485 4,966,608
Occupancy 769,401 841,789 2,166,565 2,313,786
Depreciation 200,950 319,843 573,996 862,545
Selling Expenses 402,882 427,874 1,212,608 1,147,864
General, Administrative
Expenses 221,667 177,863 591,211 589,078
Total Operating Costs
and Expenses 3,109,201 3,594,944 8,877,865 9,879,881
Income from
Operations $211,698 $232,612 $438,039 $574,194
Interest Expense
- Net $172,850 $54,537 $521,893 $315,210
Other Income 0 0 0 0
Net Income (Loss)
before Taxes $38,848 $178,075 $(83,854) $258,984
Income Taxes 384 0 384 5,831
Provision for Income
Taxes, All Current 0 0 0 0
Net Income (Loss) $38,464 $178,075 $(84,238) $253,153
Net income (loss) per
share, basic and diluted 0.01 0.03 (0.02) 0.04
SOURCE Creative Host Services, Inc.
CO: Creative Host Services, Inc.; GladCo Enterprises, Inc.
ST: California
IN: AIR FOD RST
SU: ERN
11/15/2000 16:46 EST prnewswire.com |
