Earnings news released Thursday. Significant improvement.
Not much of a reaction to it ... perhaps people are waiting until it gets into the black?
Spiegel, Inc. Reports Substantially Improved First
Quarter
PR Newswire - April 22, 1999 09:15
DOWNERS GROVE, Ill., April 22 /PRNewswire/ -- Spiegel, Inc. (Nasdaq: SPGLA) today
reported a significant improvement in its first quarter financial results. The company recorded a
loss of $10.0 million, or $0.08 per share, for the first quarter ended April 3, 1999, compared
to a loss of $23.1 million, or $0.19 per share, last year.
"This marks our sixth consecutive quarter of improved earnings performance versus the prior
year's quarter. Each of our merchant companies reported better operating results for the
quarter, driven primarily by strong response to merchandise offerings and gross margin growth.
The progress realized in the first quarter moves us closer to our primary objective for 1999:
achieve significant earnings improvement for The Spiegel Group," stated James W. Sievers,
office of the president and CFO of The Spiegel Group.
Total revenue for the quarter was $625.2 million, an increase of 6 percent from $590.6 million
for the first quarter of 1998. The revenue growth was driven by a 6 percent increase in net
sales and a 5 percent increase in total finance revenue.
The net sales increase for the quarter includes a 5 percent gain in total catalog sales and an 8
increase in total retail sales. Retail sales for the quarter include a 4 percent increase in
comparable-store sales for the company's Eddie Bauer division. Stronger customer response
across the merchandise companies and in all marketing channels - retail, catalog and the
Internet - account for the sales growth.
The merchant companies delivered solid margin growth in the quarter. The gross profit margin
as a percent of net sales increased 320 basis points to 31.9 percent and margin dollars rose 18
percent. The favorable margin performance resulted from stronger customer acceptance to the
merchandise offerings and in turn, lower markdowns compared to last year. Total inventories
at quarter-end were down 2 percent compared to last year.
Selling, general and administrative expenses were 39.0 percent of total revenue for the quarter
compared to 39.7 percent last year. Higher levels of productivity on catalog mailings realized
by Eddie Bauer, Newport News and Spiegel Catalog contributed to this improvement. In
addition, stringent cost controls accompanied by sales growth drove the rate down.
Commenting further on the quarter, James W. Sievers, added, "First quarter results reflect our
ongoing efforts to improve margins, boost merchandise productivity and control costs. Key
strategic initiatives implemented by our merchandising businesses are gaining momentum and
resonating with customers."
Operating income from the FCNB bankcard segment declined to $4.6 million from $10.9
million due to noncomparable items that occurred in the first quarter of 1998. Last year's first
quarter included the benefit of approximately $3.0 million due to the sale of receivables. In
addition, the first quarter of 1998 benefited from a new credit program. Excluding the impact
of these noncomparable items from 1998's first quarter results operating income would be flat
this year compared to 1998.
Michael R. Moran, chairman of the office of the president of Spiegel, Inc. and chairman of
First Consumers National Bank, stated, "We experienced exceptional performance in our
bankcard segment throughout 1998. Matching 1998's operating performance this year would
be extraordinary. We are very pleased with the growth and overall productivity of the
bankcard portfolio. The operating yield on total bankcard receivables serviced is well above
industry norms and we expect this performance to continue. Overall, receivables serviced
increased 51 percent in the first quarter of 1999."
Moran concluded, "We are very encouraged by the first quarter results of The Spiegel Group.
We expect each of our merchant companies to build on the solid returns seen from their first
quarter initiatives while continuing to benefit from opportunities to strengthen their businesses,
such as the Internet. Eddie Bauer and Spiegel Catalog experienced strong sales growth from
the Internet this quarter and plan further expansion. Newport News is on schedule to launch
their Internet site in mid-June, benefiting from the expertise of our other merchant companies
and the solid infrastructure of The Spiegel Group. While total Internet sales for The Spiegel
Group are a small percentage of our total sales, they continue to grow significantly -- more
than tripling in the first quarter. Overall, we expect to achieve year-over-year quarterly
improvements throughout 1999."
Spiegel, Inc. is a leading international specialty retailer marketing fashionable apparel and home
furnishings to customers through catalogs, more than 550 specialty retail stores and four
Internet sites (www.eddiebauer.com, www.spiegel.com, www.spiegeltronics.com and
www.ultimate-outlet.com). Spiegel's businesses include Eddie Bauer, Newport News, Spiegel
Catalog and First Consumers National Bank. Spiegel's Class A Non-Voting Common Stock
trades on the Nasdaq National Market System under the ticker symbol: SPGLA.
This press release contains statements that are forward-looking statements within the meaning
of applicable federal securities laws and are based upon Spiegel, Inc.'s current expectations
and assumptions, which are subject to a number of risks and uncertainties that could cause
actual results to differ materially from those anticipated. Potential risks and uncertainties
include, but are not limited to, factors such as the financial strength and performance of the
retail and direct marketing industry, changes in consumer spending patterns, dependence on
the securitization of accounts receivable to fund operations, state and federal laws and
regulations related to offering and extending credit, risks associated with collections on the
company's credit card portfolio, interest rate fluctuations, postal rate increases, paper and
printing costs, the success of planned merchandising, advertising, marketing and promotional
campaigns, and other factors that may be described in the company's filings with the Securities
and Exchange Commission.
Spiegel, Inc. and Subsidiaries
Consolidated Statements of Earnings
($000s omitted, except per share amounts)
(unaudited)
Thirteen Weeks Ended
April 3, April 4,
1999 1998
Net sales and other revenues:
Net sales $564,525 $532,450
Finance revenue 51,458 49,214
Other revenue 9,194 8,889
Total 625,177 590,553
Cost of sales and operating expenses:
Cost of sales, including buying and
occupancy expenses 384,255 379,612
Selling, general and administrative
expenses 243,650 234,704
Total 627,905 614,316
Operating income (loss) (2,728) (23,763)
Interest expense 14,242 16,870
Earnings (loss) before income taxes (16,970) (40,633)
Income tax benefit (6,958) (17,500)
Net earnings (loss) $(10,012) $(23,133)
Net earnings (loss) per common share $(0.08) $(0.19)
Weighted average number of common
shares outstanding 131,788,511 119,484,137
Spiegel, Inc. and Subsidiaries
Business Segment Comparison
($000s omitted)
(unaudited)
Thirteen Weeks Ended
April 3, April 4,
1998 1999
Revenues:
Merchandising $609,428 $573,021
Bankcard 15,749 17,532
Total Revenues $625,177 $590,553
Operating income(loss):
Merchandising $(7,054) $(34,256)
Bankcard 4,564 10,890
Total segment
operating(loss) (2,490) (23,366)
Premium on acquisitions (238) (397)
Total operating income(loss) $(2,728) $(23,763)
Spiegel, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
($000s omitted, except per share amounts)
April 3, 1999 and January 2, 1999
(unaudited)
April 3, January 2,
ASSETS 1999 1999
Current assets:
Receivables, net $555,162 $544,146
Inventories 502,985 490,915
Other current assets 160,777 220,433
Total current assets 1,218,924 1,255,494
Total non-current assets 590,165 601,766
Total assets $1,809,089 $1,857,260
LIABILITIES and STOCKHOLDERS' EQUITY
Total current liabilities $469,889 $663,251
Total long-term liabilities 711,036 556,742
Total liabilities 1,180,925 1,219,993
Total stockholders' equity 628,164 637,267
Total liabilities
and stockholders' equity $1,809,089 $1,857,260
SOURCE Spiegel, Inc.
/CONTACT: Debbie Koopman of Spiegel, Inc., 630-769-2596/
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 121906/
/Web site: spiegeltronics.com
/Web site: eddiebauer.com
/Web site: ultimate-outlet.com
/Web site: spiegel.com
(SPGLA) |
