MELVILLE, NY--(BUSINESS WIRE)--May 10, 1999--
1999 First Quarter Net Income of $0.03 per Share vs.
1998 First Quarter Loss of $0.08 per Share (excluding charge
for change in accounting principles)
Family Golf Centers, Inc. (NASDAQ, NM: FGCI) today reported total revenue of $35.1 million for the
first quarter of 1999, up 63 percent from 1998's first quarter total revenue of $21.5 million. Total
revenue in the quarter was comprised of $17.3 million in golf operating revenues, $10.0 million in
non-golf operating revenues and $7.8 million in merchandise sales. Total revenue in the
comparable quarter last year was comprised of $11.8 million in golf operating revenues, $4.9
million in non-golf operating revenues and $4.8 million in merchandise sales.
Net income for the first quarter of 1999 was $752,000, or $0.03 per diluted share, as compared to
a net loss of $3.7 million, or $0.18 per diluted share in the first quarter of 1998. Last year's first
quarter results includes a $2.0 million charge representing the cumulative effect of a change in
accounting principles in connection with the company's adoption of Statement of Position 98-5,
Reporting on the Costs of Start-Up Activities. Net loss for 1998's first quarter before the
cumulative effect of the change in accounting principles was $1.7 million, or $0.08 per diluted
share.
For the 52 golf centers that Family Golf owned and operated in both of the first quarters of 1998
and 1999, same-store-sales increased by 5 percent. Same-store-sales performance at the 34
mature golf centers (those with at least two full years of operations) increased 3 percent for the
quarter. Same-store-sales for the 17 golf centers owned by Eagle Quest Golf Centers, Inc. last year
and operated by Family Golf in the most recent quarter declined by 8 percent. Family Golf acquired
Eagle Quest on June 30, 1998 in a merger accounted for as a pooling-of-interests.
"Since the beginning of the first quarter, we have refocused our efforts on operations, preparing all
of our golf centers for the current season, especially those acquired in 1998," commented Dominic
Chang, Chairman and CEO. "With the golf season just underway, we will be in a better position to
evaluate the performance of the newer sites in the second and third quarters to determine if we
have been successful in our integration efforts."
"Our ice skating and family entertainment business helped offset the seasonality of our golf
business. In the first quarter of 1999, our non-golf business contributed $10.7 million, or 30
percent, of total revenue while contributing $2.1 million, or over half of our income from
operations," noted Mr. Chang. Concluding he added, "We experienced tremendous growth in 1998,
which solidified our position as a leader in the golf and ice skating industries. In 1999, we are
committed to delivering better performance from all of our facilities and leveraging our leadership
positions."
Family Golf Centers is the leading operator and consolidator of golf centers in North America. The
company's golf centers provide a wide variety of practice and play opportunities, including
facilities for driving, chipping, putting, pitching and sand play and typically offer full-line pro
shops, golf lessons and other amenities such as miniature golf and snack bars. The company also
operates complementary sports and family entertainment facilities, including ice rinks and Family
Sports Supercenters. Currently, the company owns, operates or has under construction 121 golf
centers and 28 ice rink and family entertainment facilities in 25 states and three Canadian
provinces.
FAMILY GOLF CENTERS, INC. AND SUBSIDIARIES
Financial Highlights
(in thousands, except per share data)
Three months ended
3/31/99 3/31/98
(unaudited)
Operating revenues $ 27,329 $ 16,737
Merchandise sales 7,820 4,760
Total revenue 35,149 21,497
Operating expense 22,203 13,751
Cost of merchandise sold 5,346 3,240
Selling, general & administration 3,591 3,662
Income from operations 4,009 844
Interest expense 3,155 2,629
Other income 378 956
Income (loss) before income
taxes and cumulative effect
of change in accounting principle
1,232 (829)
Income tax expense 480 860
Income (loss) before
cumulative effect of change in
accounting principle 752 (1,689)
Cumulative effect on change
in accounting principle:
Pre-opening expenses (net) -- (2,035)
Net income (loss) $ 752 $ (3,724)
Earnings (loss) before
cumulative effect of a change in $ 0.03 $ (0.08)
accounting principle
per diluted share
Cumulative effect of
change in accounting principle -- (0.10)
Net income (loss) per diluted share $ 0.03 $ (0.18)
Weighted average shares
outstanding - diluted 26,074 20,599
FAMILY GOLF CENTERS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
(in thousands)
March 31, December 31,
1999 1998
---- ----
ASSETS (unaudited)
Current assets:
Cash, cash equivalents
and short-term investments
$ 7,073 $ 21,566
Inventories 25,156 26,220
Prepaid expenses, taxes
and other current assets 16,035 10,277
Total current assets 48,264 58,063
Property, plant and equipment net 462,318 444,280
Other assets 67,776 69,697
Total assets $578,358 $572,040
LIABILITIES
Current liabilities:
Accounts payable, accrued
expenses and other current
liabilities $ 18,157 $ 23,998
Current portion of long-term obligations 4,417 3,950
Total current liabilities 22,574 27,948
Long-term obligations (less current portion) 140,731 130,621
Convertible subordinated debenture 115,000 115,000
Other liabilities 9,275 9,148
Total liabilities 287,580 282,717
Minority interest 40 40
STOCKHOLDERS' EQUITY
Total stockholders' equity 290,738 289,283
Total liabilities and
stockholders' equity $578,358 $572,040
The matters discussed in this news release may be considered "forward-looking" statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Prospective investors are cautioned that any
such forward-looking statements are not guarantees of future performance and involve a number
of risks and uncertainties including those as described in Family Golf Centers, Inc.'s 10K for the
year ended December 31, 1998; actual results could differ materially from those indicated by such
forward-looking statements.
CONTACT: Jeffrey C. Key, Chief Financial Officer
Kerri Swain, Investor Relations Manager
516/694-1666 - Telephone
IR@familygolf.com |
