Eagle Hardware & Garden Reports Record Sales and Earnings
for Fiscal 1998 Second Quarter;
Diluted Net Income Per Share $0.48; Same Store Sales Increase Six Percent
Business Wire - August 20, 1998 07:46
RENTON, Wash.--(BUSINESS WIRE)--Aug. 20, 1998--Eagle Hardware &
Garden, Inc. (Nasdaq NM:EAGL) today reported record sales and
earnings for its second fiscal quarter ended July 31, 1998.
For the quarter, sales increased 11% to $308.0 million from $278.2
million in the second quarter of fiscal 1997. Same store sales
increased 6% over the previous year. Net income for the quarter
increased 18% to $15.4 million, or $0.48 per share, diluted, from
$13.0 million, or $0.41 per share, diluted, in the same quarter of last year.
For the first half of fiscal 1998, sales increased by 12% to $558.2
million from $499.3 million in the first half of 1997. Net income
for the first six months of fiscal 1998 increased 23% to $21.6
million, or $0.69 per share, diluted, from $17.6 million, or $0.57
per share, diluted, for the same period last year. Same store sales
increased 6% for the first half of fiscal 1998.
Commenting on the Company's second quarter results, Eagle President
Richard Takata said, "Our second quarter results represented the best
quarterly sales and earnings performance in our Company's history.
We achieved these record results and a 6% increase in same store
sales despite some sales cannibalization and increased competition."
"We look forward to introducing the Eagle concept to several new
markets in the coming months. Our expansion plans currently include
the opening of four to six new stores by the end of fiscal 1998,
including three in southern California. In fiscal 1999, our goal is
to open 10 to 12 new stores, with at least six of those in
California," Takata added.
Eagle Hardware & Garden operates 32 warehouse home improvement
centers in Washington, Colorado, Utah, Hawaii, Alaska, California,
Idaho, Montana and Oregon. The Company's home centers average
128,000 square feet of retail selling space and feature over 65,000
products under its "More of Everything"(R) merchandising philosophy.
Some of the information in this press release constitutes forward
-looking statements. These statements are subject to a number of
risks and uncertainties that might cause actual results to differ
materially from stated expectations. These risks include, among
others, the highly competitive environment in the retail home
improvement industry, the effect of general economic conditions and
weather in the Company's markets and the Company's ability to
achieve its expansion plans and successfully manage growth. These
risks are described in detail in the Company's Annual Report on Form
10-K and other SEC filings.
(financial statements follow)
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(UNAUDITED)
July 31, January 30,
1998 1998
Assets
Cash and cash equivalents $90,140 $63,557
Accounts receivable, net 2,224 4,463
Merchandise inventories 213,773 202,833
Other current assets 7,941 6,791
Total current assets 314,078 277,644
Property and equipment, net 358,364 316,133
Preopening costs 231 1,055
Other assets 11,628 6,823
Total assets $684,301 $601,655
Liabilities & Shareholders'
Equity
Outstanding checks, not
cleared by the bank $16,055 $11,008
Accounts payable 70,170 55,097
Other current liabilities 51,282 38,934
Total current liabilities 137,507 105,039
Deferred income taxes 12,737 11,084
Other long-term liabilities 3,516 3,159
Long-term debt 171,806 145,836
Total liabilities 325,566 265,118
Shareholders' equity 358,735 336,537
Total liabilities &
shareholders' equity $684,301 $601,655
These condensed 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 30, 1998, filed with the
Securities and Exchange Commission.
Eagle Hardware & Garden, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
13 Weeks Ended 26 Weeks Ended
July 31, August 1, July 31, August 1,
1998 1997 1998 1997
Net sales $307,957 $278,238 $558,196 $499,345
Cost of sales 221,331 199,966 401,325 358,503
Gross margin 86,626 78,272 156,871 140,842
Operating expenses 60,927 56,388 118,362 108,282
Preopening expenses 0 0 1,030 2,089
Operating income 25,699 21,884 37,479 30,471
Other income (expense):
Net interest (expense) (1,563) (1,531) (3,539) (2,950)
Other income 71 80 128 138
Income before tax 24,207 20,433 34,068 27,659
Income tax provision 8,836 7,450 12,435 10,088
Net income $15,371 $12,983 $21,633 $17,571
Net income per share,
basic $0.53 $0.45 $0.74 $0.61
Net income per share,
diluted $0.48 $0.41 $0.69 $0.57
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
26 Weeks Ended
July 31, August 1,
1998 1997
Operating Activities
Net income $21,633 $17,571
Expenses not requiring use of cash 8,403 8,312
Changes in current assets and
current liabilities, net 21,754 (10,079)
Other (3,624) 133
Net cash provided by operating
activities 48,166 15,937
Investing Activities
Capital expenditures for property
and equipment (50,529) (28,768)
Net sales of short-term investments 0 31,330
Net cash (used in) provided by
investing activities (50,529) 2,562
Financing Activities
Proceeds on long-term borrowings, net 32,000 17,584
Other (3,054) 1,368
Net cash provided by financing
activities 28,946 18,952
Increase in cash and cash equivalents $26,583 $37,451
CONTACT: Eagle Hardware & Garden
Richard T. Takata, President & CEO
Ronald P. Maccarone, Chief Financial Officer
425/227-5740
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