Check this out.... HDS:NYSE
Hills Department Stores $3.50 on the New York stock exchange.
Look at the press release below. Great turn around story.
They earned $1.84 this quarter, they have a book value of about
$20 per share, thats right, $20 per share. The balance sheet
acutally looks good. What is wrong here? This has got to go up.
-----------------------------------------------------------
CANTON, Mass., March 11 /PRNewswire/ -- Hills Stores Company (NYSE:HDS)
announced its fourth quarter and annual financial results for the period ended
January 31, 1998.
The Company reported net earnings for its fourth fiscal quarter ended
January 31, 1998 of $20.9 million, or $2.00 per basic share, compared with a
net loss of $2.9 million, or $0.28 per share, in the fourth quarter last year.
Last year's fourth quarter included a pretax charge of $22 million ($13.5
million after tax, or $1.31 per share) related to the estimated cost of
impairment of long-lived assets and the closing of ten stores which the
Company announced in January 1997. Fourth quarter earnings before interest,
taxes, depreciation, amortization, and other non-cash items (EBITDA) increased
to $59.0 million from $58.1 million last year.
Total sales for the quarter ended January 31, 1998 decreased by 4.2
percent from the previous year to $630.9 million, while comparable store sales
increased by 1.0 percent. The decrease in total sales was due to the Company
operating ten fewer stores than the prior year. Gross profit decreased
slightly during the quarter to $163.9 million, but rose as a percentage of
sales to 26.0 percent from 25.6 percent last year. Selling and administrative
expenses in the fourth quarter decreased by $5.3 million to $105.2 million
from $110.5 million last year and decreased slightly as a percentage of sales
to 16.7 percent from 16.8 percent in the prior year. Interest expense
increased during the quarter to $11.8 million from $11.1 million last year.
Gregory K. Raven, President and Chief Executive Officer of Hills,
commented, "Our sales momentum and positive comp store sales growth at the end
of 1997 enabled us to improve fourth quarter results year-over-year. In
addition, despite a relatively promotional Christmas holiday selling season,
we were able to improve our gross profit margins in the fourth quarter by
almost one-half of one percent. Through a lot of effort on the part of our
associates, we were also able to slightly reduce our overall expense rate in
the fourth quarter while directing an increased share of operating expenses to
promotional activity."
Commenting further on 1997 results and 1998 expectations, Raven noted, "We
have made a number of positive steps in the back half of 1997 towards the
turnaround of Hills Stores. We will continue to invest in increased customer
traffic promotion in early 1998 to extend our recent sales momentum. While
January and February sales were a little lower than last year's very strong,
clearance-stimulated levels, the trend was still strongly positive on a two-
year comparison, in excess of 5 percent sales growth over 1996. The
merchandising and promotional challenges that slowed us down in the middle of
1997 have been addressed, and, as a result, the stage is set for steady profit
improvement in 1998. While the cost of rolling out our new information
systems will have to be absorbed over the next year or so, we should be able
to offset this through continued sales and margin improvements."
For the full fiscal year ended January 31, 1998, the Company reported a
net loss of $9.0 million, or $0.87 per basic share, compared with last year's
net loss of $35.1 million, or $3.42 per share. Last year's loss included
pretax charges of $33.7 million ($20.7 million after tax, or $2.02 per share)
related to the estimated cost of impairment of long-lived assets and store
closings. Additionally, last year's net loss also reflected an extraordinary
after-tax loss of $4.3 million, or $0.42 per share, from early extinguishments
of debt. For the fiscal year 1997, EBITDA was $80.3 million compared with
$84.7 million last year. The comparable pretax loss for fiscal year 1997 was
$10.8 million compared with $11.1 million in fiscal year 1996.
Total sales for the fiscal year ended January 31, 1998 were $1,768.3
million compared with $1,878.5 million last year, and comparable store sales
decreased by 1.5 percent. The total sales decrease included the impact of the
closing of 10 stores at the beginning of the fiscal year. Gross profit
decreased to $461.9 million from $486.1 million, but increased as a percentage
of sales to 26.1 percent from 25.9 percent last year. Selling and
administrative expenses decreased by $20.7 million from last fiscal year
primarily due to store closings, but rose slightly as a percentage of sales to
21.7 percent from 21.5 percent, due to the lower same store sales, and
increased promotion expenditures in the second half of the year. Interest
expense for the fiscal year decreased to $48.4 million from $53.6 million in
fiscal 1996, primarily the result of reduced borrowings under the Company's
working capital facility and due to reduced amortization costs associated with
the notes that were refinanced in mid-1996.
The nation's eighth largest discount retailer, Hills operates stores
primarily in the Ohio Valley and Great Lakes regions, with a majority of its
stores located in Ohio, Pennsylvania, New York, West Virginia and Indiana.
Note: This press release may contain forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Although the Company believes its plans are based upon
reasonable assumptions as of the current date, it can give no assurance that
any expectations will be attained. Factors that could cause actual results to
differ materially from expectations include: general business and economic
conditions, weather, competitive factors, pricing, and fluctuations in
consumer demand.
Hills Stores Company and Subsidiaries
Condensed Consolidated Operating Statements (a)
(in thousands, except per share amounts)
Fourth Quarter Year to Date
1997 1996 1997 1996
Net Sales $630,946 $658,646 $1,768,274 $1,878,477
Cost of Sales 467,040 490,307 1,306,335 1,392,353
Selling and
Administrative
Expenses (b) 105,203 110,470 382,859 403,522
Depreciation and
Amortization 10,599 10,046 41,503 40,121
Impairment of Long-lived
Assets and Store
Closings (c) -- 22,000 -- 33,706
Operating Earnings 48,104 25,823 37,577 8,775
Interest Expense, net 11,834 11,132 48,392 53,555
Income (Loss) before
Income Taxes 36,270 14,691 (10,815) (44,780)
Income Tax Provision
(Benefit) (d) 15,400 17,608 (1,800) (14,000)
Income (Loss) before
Extraordinary Loss 20,870 (2,917) (9,015) (30,780)
Extraordinary Loss on
Extinguishment of
Debt, net -- -- -- 4,278
Net Income (Loss) $20,870 $(2,917) $(9,015) $(35,058)
Basic Earnings (Loss)
Per Share
Before extraordinary
loss $2.00 $(0.28) $(0.87) $(3.00)
Extraordinary loss -- -- -- (0.42)
Net Income (Loss) $2.00 $(0.28) $(0.87) $(3.42)
Diluted Earnings (Loss)
Per Share (e)
Before extraordinary
loss $1.84 $(0.28) $(0.87) $(3.00)
Extraordinary loss -- -- -- (0.42)
Net Income (Loss) $1.84 $(0.28) $(0.87) $(3.42)
Weighted Average Shares
Outstanding
Basic 10,428 10,306 10,387 10,252
Diluted 11,343 10,306 10,387 10,252
See accompanying notes
Hills Stores Company and Subsidiaries
Condensed Consolidated Balance Sheets (a)
(in thousands)
Jan 31, 1998 Feb 1, 1997
ASSETS:
Current assets:
Cash and cash equivalents $37,523 $66,163
Accounts receivable, net 21,869 24,346
Inventories 340,719 341,477
Deferred tax assets 26,933 32,991
Other current assets 5,542 5,115
Total current assets 432,586 470,092
Property, equipment, and capital
lease assets, net 285,462 285,902
Other assets, net 40,748 18,418
Deferred tax asset 28,592 21,585
Beneficial lease rights, net 6,081 6,848
Reorganization value in excess of
amounts allocated to identifiable
assets, net 89,112 97,508
Total Assets $882,581 $900,353
LIABILITIES AND COMMON SHAREHOLDERS' EQUITY:
Current liabilities:
Current portion of capital leases $10,541 $7,255
Current portion - Term Note 500 --
Accounts payable, trade 110,329 111,064
Other accounts payable and
accrued expenses 77,803 81,752
Total current liabilities 199,173 200,071
Long-term senior notes 195,000 195,000
Term Note 9,500 --
Capital lease and sale/leaseback financing 144,254 154,639
Other liabilities 98,467 105,917
Preferred stock, at mandatory
redemption value 18,209 19,942
Common shareholders' equity 217,978 224,784
Total Liabilities and
Shareholders' Equity $882,581 $900,353
See accompanying notes
Hills Stores Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements of Operations
January |
