DALLAS, Nov. 10 /PRNewswire/ -- CompUSA Inc. (NYSE: CPU), America's
Largest Computer Superstore(SM) retailer, today announced financial results
for the first quarter ended September 26, 1998.
Net sales for the first quarter of fiscal 1999 increased 17% to
$1.39 billion from $1.19 billion for the comparable period ended September 27,
1997. Comparable store sales were negative 1.7% in the first quarter of
fiscal 1999 for the 134 CompUSA stores open one year or more.
As announced in its press release dated November 2, 1998, the Company sold
its seven Computer City supercenters located in Canada. The September sales
results for these stores were included in the first quarter sales results
released on October 7, 1998, but these sales results and the results of
operations of these stores have been excluded from the Company's results of
operations reported in this release. In addition, the Company has closed 55
Computer City stores for which liquidation sales have been completed. The
Company's net sales for the first quarter of fiscal 1999 include sales for the
month of September for the 39 former Computer City stores the Company is
continuing to operate in the United States. Computer City store sales are not
included in the comparable store sales calculation.
The Company reported net income for the first quarter of fiscal 1999 of
$8.1 million, or $0.09 per share, compared with net income of $23.5 million,
or $0.25 per share, for the first quarter of fiscal 1998. These results
included a negative $0.05 per share impact related to the Company's
acquisition of Computer City. Included in this $0.05 per share reduction were
duplicate overhead costs incurred at the Company and Computer City related to
the winding down of the operations at Computer City's corporate headquarters,
September operating losses of the ongoing former Computer City stores,
interest expense associated with the $136 million, 9.5% note payable to Tandy
Corporation, and amortization of goodwill. The negative $0.05 per share
impact also includes a charge for the anticipated closure of three CompUSA
Computer Superstores in connection with the Computer City acquisition.
"Although we are disappointed with our overall financial results for the
first quarter of fiscal 1999, we are pleased with the improvements we have
made since the fourth quarter of fiscal 1998," said James F. Halpin, president
and chief executive officer.
Mr. Halpin further commented, "Since we announced our acquisition of
Computer City, we have worked aggressively to implement our integration
strategy. To date, we have completed the conversion of the store information
systems and implemented the CompUSA merchandise assortment in the ongoing
former Computer City stores. We are focused on completing the integration and
are excited about the opportunities to improve their operating results."
The Company noted, however, that it remains cautious as to business
conditions for the second quarter of fiscal 1999. The Company is currently
expecting low-single digit negative comparable store sales for the second
quarter due, in part, to anticipated lower average selling prices as compared
to the same period of the prior year and the continued softness in corporate
sales. In addition, the Company currently expects its gross margin percentage
for the second quarter of fiscal 1999 to approximate the gross margin
percentage achieved in the first quarter of fiscal 1999.
CompUSA is one of the nation's leading retailers and resellers of personal
computers and related products and services. The Company currently operates
207 CompUSA Computer Superstores(SM) in 77 major metropolitan markets across
the United States, which serve retail, corporate, government and education
customers and include technical service departments and classroom training
facilities. CompUSA also offers its own build-to-order line of personal
computers, the CompUSA PC(TM), and operates an Internet web site located at
www.compusa.com.
This news release contains forward-looking statements about the business,
financial condition and prospects of the Company. The actual results of the
Company could differ materially from those indicated by the forward-looking
statements because of various risks and uncertainties, including without
limitation, changes in product demand, the availability of products, changes
in competition, economic conditions, various inventory risks due to changes in
market conditions, risks related to the Computer City acquisition, and other
risks indicated in the Company's Securities and Exchange Commission filings
and reports. All of the foregoing risks and uncertainties are beyond the
ability of the Company to control, and in many cases the Company cannot
predict the risks and uncertainties that could cause its actual results to
differ materially from those indicated by the forward-looking statements.
When used in this press release, the words "believes," "plans," "expects,"
"anticipates" and similar expressions as they relate to the Company or its
management are intended to identify forward-looking statements. |
