Mike 0.41 cents..Scott Results
Eagle Hardware & Garden Reports Record Sales and Net
Income for Fiscal 1997 Second Quarter Eagle Hardware &
Garden Reports Record Sales and Net Income for Fiscal 1997
Second Quarter August 26, 1997 7:34 AM EDT
RENTON, Wash.--(BUSINESS WIRE)--Aug. 26, 1997--
TAKATA NAMED CHIEF EXECUTIVE OFFICER
Eagle Hardware & Garden, Inc. (Nasdaq NM:EAGL) today reported
record sales and earnings for its second fiscal quarter ended August
1, 1997.
For the quarter, sales increased 33% to $278.2 million from $209.1
million in the second quarter of fiscal 1996. Same store sales
increased 12% over the previous year due primarily to an 11%
increase in the number of customer transactions. Net income for the
quarter increased 61% to $13.0 million, or $0.41 per share, fully
diluted, from net income of $8.1 million, or $0.32 per share, fully
diluted, in the same quarter of last year. The Company had 26% more
common shares outstanding during the current quarter primarily as a
result of a 5,750,000 share, $125 million stock offering completed in
September 1996.
For the first half of fiscal 1997, sales increased by 35% to $499.3
million from $370.2 million in the first half of 1996. Net income for the
first six months of fiscal 1997 increased 59% to $17.6 million, or $0.57
per share, fully diluted, from $11.0 million, or $0.46 per share, fully
diluted, for the same period last year. Same store sales improved 14%
for the first half of 1997, due entirely to increased customer
transactions.
Commenting on the Company's results, Eagle President Richard
Takata said, "We are very pleased with our record second quarter
sales and earnings. We achieved outstanding operating results
despite unseasonally poor weather in June and early July. Our
business continues to benefit from strong economic environments in
our primary markets.
"Our expansion plans for this year are currently on schedule. The
Company plans to enter two new states in the fourth quarter of fiscal
1997 with openings in Coeur d'Alene, Idaho and La Quinta,
California. The California market, with over 32 million residents,
affords us numerous future expansion opportunities. We are actively
reviewing store sites in the Southern California area at the present
time," he added.
David J. Heerensperger, Eagle Chairman, Chief Executive Officer and
founder, also announced today that Eagle President Richard T.
Takata, 47, will assume the additional duties of Chief Executive
Officer on September 1, 1997. Heerensperger, 61, will remain
Chairman of the Board and will continue his involvement in store real
estate selection, long-term strategic planning and the development of
new merchandising programs.
Mr. Heerensperger said, "Rich and I have worked together closely for
over 11 years. We share a common vision of providing our customers
a quality shopping experience and the highest level of service in the
industry. Our titles are changing as part of a transition that has taken
place over the past five years. I am extremely confident that Rich's
skills and experience make him the best person to successfully lead
our Company and to continue its growth."
Takata became President and Chief Operating Officer of Eagle
Hardware & Garden in January 1992, when the Company had four
stores. He began his career in the home improvement business in
1975, and held a number of positions, including Executive Vice
President - Merchandising, Vice President - Advertising and Sales
Promotion, Divisional Merchandise Manager, Regional Manager and
Corporate Buyer, with two large home center chains prior to joining
Eagle.
Eagle Hardware & Garden operates 30 warehouse home improvement
centers in Washington, Utah, Colorado, Alaska, Hawaii, Montana
and Oregon. The Company's home centers average 125,000 square
feet of retail selling space and feature over 65,000 products under its
"More of Everything" merchandising philosophy.
(financial statements follow)
CONDENSED CONSOLIDATED BALANCE SHEETS
(000)
(UNAUDITED)
AUGUST 1, JANUARY 31,
1997 1997
----------- ----------
Assets
-----------------------------------
Cash and cash equivalents $58,189 $20,738
Short-term investments 0 31,330
Accounts receivable, net 4,384 4,213
Merchandise inventories 196,559 174,299
Other current assets 7,335 7,489
----------- ----------
Total current assets 266,467 238,069
Property and equipment, net 299,131 277,493
Preopening costs 24 1,468
Other assets 2,829 2,355
----------- ----------
Total assets $568,451 $519,385
=========== ==========
Liabilities & Shareholders' Equity
-----------------------------------
Outstanding checks, not cleared by the bank $13,402 $8,762
Accounts payable 56,450 55,295
Other current liabilities 37,191 30,661
----------- ----------
Total current liabilities 107,043 94,718
Deferred income taxes 9,789 8,314
Other long-term liabilities 3,227 3,094
Long-term debt 124,609 108,416
----------- ----------
Total liabilities 244,668 214,542
Shareholders' equity 323,783 304,843
=========== ==========
Total liabilities & shareholders' equity $568,451 $519,385
=========== ==========
These summary financial statements should be read in conjunction
with the financial statements and accompanying footnotes included in
the Eagle Hardware & Garden, Inc. Annual Report on Form 10-K for the
fiscal year ended January 31, 1997, filed with the Securities and
Exchange Commission.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(000, except store week and per share data)
13 Weeks Ended 26 Weeks Ended
--------------------- --------------------
August 1, July 26, August 1, July 26,
1997 1996 1997 1996
---------- ---------- ---------- ----------
Store weeks in period 390 312 765 624
Net sales $ 278,238 $ 209,078 $ 499,345 $370,184
Cost of sales 199,966 150,739 358,503 266,589
--------- --------- -------- --------
Gross margin 78,272 58,339 140,842 103,595
Operating expenses 56,388 43,471 108,282 81,765
Preopening expenses 0 0 2,089 0
--------- --------- --------- --------
Operating income 21,884 14,868 30,471 21,830
Other income (expense):
Net interest (expense) (1,531) (2,192) (2,950) (4,615)
Other income 80 16 138 145
--------- --------- --------- ---------
Income before tax 20,433 12,692 27,659 17,360
Income tax provision 7,450 4,627 10,088 6,331
========= ========= ========= =========
Net income $ 12,983 $ 8,065 $ 17,571 $ 11,029
========= ========= ========= =========
Net income per share,
primary $ 0.44 $ 0.35 $ 0.60 $ 0.47
Net income per share,
fully diluted $ 0.41 $ 0.32 $ 0.57 $ 0.46
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(000)
26 Weeks Ended
--------------------------
August 1, July 26,
1997 1996
------------- ------------
Operating Activities
--------------------
Net income $ 17,571 $ 11,029
Expenses not requiring use of cash 8,312 4,897
Changes in current assets and current
liabilities, net (10,079) 8,929
Other 133 422
-------- --------
Net cash provided by operating activities 15,937 25,277
-------- --------
Investing Activities
--------------------
Capital expenditures for property and
equipment (28,768) (37,197)
Net sales of short-term investments 31,330 0
Proceeds on sale of assets 0 4,269
-------- ---------
Net cash provided by (used in) investing
activities 2,562 (32,928)
-------- ---------
Financing Activities
---------------------
Advances on note payable to bank, net 0 2,400
Proceeds on long-term borrowings, net 17,584 3,598
Other 1,368 1,004
-------- ---------
Net cash provided by financing
activities 18,952 7,002
======== =========
Increase (decrease) in cash and cash
equivalents $ 37,451 ($ 649)
======== =========
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