Tuesday October 26, 8:11 am Eastern Time
Company Press Release
Sight Resource Reports Third Quarter Results
HOLLISTON, Mass.--(BUSINESS WIRE)--Oct. 26, 1999--Sight Resource Corporation (NASDAQ:VISN - news), a leading provider of primary eye care services and managed vision care programs, today reported financial results for its third quarter and nine months ended September 25, 1999.
Revenue for the third quarter was $18.2 million, an increase of 27 percent from revenue of $14.3 million for the third quarter of 1998. Net income was $3,000, or $0.00 per share, basic and diluted, compared with $143,000, or $0.02 per basic share and $0.01 per diluted share, for the third quarter of 1998. Basic and diluted share calculations for the third quarter of 1999 are based on 9,224,000 and 10,800,000 weighted average shares outstanding, respectively, compared with 8,890,000 and 10,380,000 in the prior year period. EBITDA (earnings before interest, taxes, depreciation and amortization) was $1,145,000 for the three months ended September 25, 1999, compared with $825,000 for the same period in 1998. Third quarter results include the operations of Shawnee Optical, acquired effective January 1, 1999, and Kent Optical, acquired effective April 1, 1999.
For the nine-month period ended September 25, 1999, Sight Resource reported revenue of $51.5 million, an increase of 22 percent from revenue of $42.4 million for the same period in 1998. Net income was $464,000, or $0.05 per basic share and $0.04 per diluted share, compared with $233,000, or $0.03 per basic share and $0.02 per diluted share, for the first nine months of the prior year. EBITDA was $3,912,000 for the nine months ended September 25, 1999, compared with EBITDA of $2,180,000 for the same period in 1998.
Commenting on the results, William T. Sullivan, President and Chief Executive Officer of Sight Resource Corporation, stated ''As we communicated in the previous quarter, substantial softness in sales volumes is being experienced across the optical retail industry this year. While there are many explanations for this softness, we have taken significant steps to better position our company for the current environment. Chief among these is our commitment to substantially expand our laser vision correction services. Through our strategic alliance with Laser Vision Centers, we are better prepared to extract the full value of our traditional retail optical customer base by being a convenient source for quality professional advice on, and access to, laser vision correction services. We also have new initiatives underway in third party contracting and are continuing our operating cost improvement program.''
Mr. Sullivan further stated ''While we are excited by the potential for growth from new initiatives such as laser vision correction, we are nonetheless encouraged by the performance of our core retail optical business in this difficult market environment. Under less than ideal market conditions, Sight Resource continued to realize improvements in our operating performance during the third quarter, as demonstrated by a 39 percent increase in EBITDA compared to the same period last year. For the first nine months of the year EBITDA has increased by 79 percent compared to a year ago. Our newest acquisitions have been accretive to earnings and continue to perform extremely well, generating very positive EBITDA results and reaffirming our acquisition strategy.''
Mr. Sullivan continued ''This has been a difficult year for optical retail chains, as sales softness has heightened the use of promotional efforts to drive sales and impacted profit margins and operating results. In response to the highly promotional environment in which we found ourselves, we increased our marketing investment during the third quarter without achieving a satisfactory sales impact. We believe the marketing increase was important to preserve our long-term customer base and branding in various markets. We also incurred increases in medical insurance costs, as well as increased provisions for bad debts attributable to inefficiencies in our third party claims processing.''
Mr. Sullivan added ''While our third quarter was affected by the issues which I have outlined, our year-to-date results continue to show substantial improvement compared to the same nine-month period in the prior year. Our profit from operations for the nine-month period increased more than five-fold, from $206,000 in 1998 to $1,165,000 in 1999. Having put plans in place to address many of the issues which affected us in the third quarter, we believe that we will continue to see improvements in our operating performance as we move forward.''
Mr. Sullivan concluded ''We believe our laser vision correction strategic alliance, managed care initiatives and continued consolidation of our operations, will result in improved future performance. As part of our ongoing evaluation of our stores we expect to closely evaluate underperforming stores for closure. In addition, by late in the third quarter the installation of our new point-of-sale system was complete at our E.B. Brown Opticians chain and more than $200,000 in annual personnel costs were eliminated as a result of our consolidation efforts. We believe that continued consolidation of back office functions and other operations will allow us to significantly improve our operating performance in 2000.''
Sight Resource provides a complete range of primary eye care products and services through its primary eye care centers, managed care programs, laser vision correction centers and integrated networks of opticians, optometrists and ophthalmologists. The Company's wholly-owned subsidiaries include Cambridge Eye Doctors in Massachusetts and New Hampshire, E.B. Brown Opticians in Ohio and Pennsylvania, Eyeglass Emporium in Indiana, Kent Optical in Michigan, Shawnee Optical in Pennsylvania and Ohio, Vision Plaza in Louisiana and Mississippi, and Vision World in Rhode Island.
''Safe Harbor'' Statement under the Private Securities Litigation Reform Act of 1995: Statements contained in this news release which are not historical fact are forward-looking statements based upon management's current expectations that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and additional factors affecting the Company's business are described in the Company's Form 10-K for the fiscal year ended December 31, 1998 filed with the Securities and Exchange Commission.
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Sight Resource Corporation and Subsidiaries
Selected Financial Information
(In thousands, except per share data)
Three Months Nine Months
Ended September Ended September
1999 1998 1999 1998
Net revenue $ 18,160 $ 14,299 $ 51,506 $ 42,377
Cost of revenue 5,871 4,877 16,711 14,700
Gross margin 12,289 9,422 34,795 27,677
Selling, general and
administrative expense 12,136 9,265 33,630 27,471
Profit from operations 153 157 1,165 206
Interest income 16 34 77 162
Interest expense (203) (45) (447) (141)
Gain on sale of assets 58 0 58 69
Write off of deferred
financing costs 0 0 (323) 0
Total other income (129) (11) (635) 90
Profit before income
tax expense 24 146 530 296
Income tax expense 21 3 66 63
Net income: $ 3 $ 143 $ 464 $ 233
Net earnings per common share:
Basic $ 0.00 $ 0.02 $ 0.05 $ 0.03
Diluted $ 0.00 $ 0.01 $ 0.04 $ 0.02
Weighted avg. number of
common shares outstanding:
Basic 9,224 8,890 9,166 8,853
Diluted 10,800 10,380 10,704 10,352
EBITDA $ 1,145 $ 825 $ 3,912 $ 2,180
Contact:
Sight Resource Corporation
Nils Bonde-Henriksen, 508/429-6916
Manager of Corporate Communications |
