RICHMOND, Va. -- June 18, 1996 -- Best Products Co.
Inc. (Nasdaq: BEST) today reported its 1996 first quarter net sales
and operating results.
The company also said that following the arrival of a new chief
executive officer in late April, it has begun to redefine its
strategic initiatives for repositioning the company.
First quarter net sales for the 13 weeks ended May 4, 1996,
decreased 1.1% to $269.8 million compared to $272.8 million for the
same period the prior year. Comparable store net sales decreased
6.4% for the first quarter of 1996. The company reported a net loss
of $1.11 a share for the first quarter of 1996 compared to a net
loss of $.25 a share for the same period in 1995.
Gross margin during the first quarter of 1996 was $58.2 million
compared to $66.6 million for the same period in the prior year.
First-quarter selling, general and administrative ("SG&A") expenses
were $79.8 million this year compared to $72.2 million in 1995 due
to higher payroll and occupancy expenses resulting from the opening
of 15 stores in 1995, primarily during the last several months of
the year.
The company stated that it is taking steps to reduce expenses by
approximately $40 million on an annual basis, but these actions will
not begin to be reflected in operating performance until the second
half of fiscal 1996. The company also indicated that the exiting of
certain merchandise categories and an increase in the mix of
promotionally priced sales are expected to result in lower margin
dollars, compared to fiscal 1995, through at least the second
quarter of fiscal 1996. As a result, the company anticipates its
operating performance will produce financial results in the second
quarter of fiscal 1996 similar to those of the first quarter.
New Chairman and Chief Executive Officer Daniel H. Levy said,
"The factors that contributed to the company's poor performance in
the fourth quarter of 1995 -- poor planning and weak marketing,
resulting in sales, margin rate and margin dollar shortfalls
-- continued to impact Best Products' performance during the first
quarter of 1996. While we are addressing these issues, we
anticipate they will continue to affect results in the near term.
"Best Products' business objectives this year are to continue to
reduce expenses, to increase margin dollars and to stabilize our
sales performance. We also believe it is paramount that the company
transition to a non-catalog showroom form of retailing, and as
announced earlier this year, we will be making significant changes
to our outdated shopping process this fall. Best Products also has
decided not to launch a broadcast advertising campaign in 1996.
Instead, we believe the most effective way to communicate with our
customers at this time is through the substantially stronger and
more aggressive print marketing program we will implement this
fall."
The company said it is progressing with the implementation of
many of the strategic initiatives it announced earlier this year.
Best Products has eliminated its annual fall catalog in favor of a
significantly strengthened and more contemporary-looking print
marketing program for the fall. The shopping experience at Best
stores will become more customer friendly with the installation of a
simplified shopping and payment process -- including more self-
service merchandise -- that replaces the current, out-dated
merchandise-order process.
Through the fall Best Products will be exiting categories such
as bicycles, home office electronics, video games, film processing,
automotive electronics, some sporting goods and selected toys,
calculators and music items. The company anticipates replacing the
margin dollars contributed by those exit categories by adding basic
domestics such as pillows and pads, as well as enhancing and
emphasizing certain ongoing merchandise categories.
Levy said, "Best Products has already taken significant steps to
reduce expenses, increase its margin rate and refine its merchandise
assortments. We believe these measures, along with the enhancements
to the shopping process, better execution at the store level and a
stronger marketing program, will allow us to improve operating
earnings in 1996 and set the stage for continued improvement during
1997."
This release contains forward-looking statements that are
subject to risks and uncertainties, including but not limited to
risks associated with the repositioning of the company, its
strategic initiatives, and customer and vendor support for such
changes. Additional discussions of factors that could cause actual
results to differ materially from management's projections,
forecasts, estimates, anticipations and expectations is contained in
the company's Securities and Exchange Commission filings.
Best Products, a specialty retailer offering category-dominant
assortments of jewelry and home furnishings, operates 169 Best
stores in 23 states.
BEST PRODUCTS CO. INC.
STATEMENTS OF OPERATIONS
(Unaudited)
(Dollar amounts in thousands, except per-share amounts)
Thirteen weeks ended
May 4, April 29,
1996 1995
Net sales $ 269,791 $ 272,759
Cost of goods sold 211,610 206,167
Gross margin 58,181 66,592
Selling, general and
administrative expenses 79,777 72,212
Depreciation and amortization 5,503 3,618
Interest expense, net 7,546 4,194
Loss before income tax benefit (34,645) (13,432)
Income tax benefit -- 5,373
Net loss $ (34,645) $ (8,059)
Net loss per common share $ (1.11) $ (0.25)
Weighted average common
shares outstanding 31,342,108 31,660,711
BALANCE SHEETS
May 4, Feb. 3,
1996 1996
(Dollar amounts in thousands)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 9,607 $ 29,003
Merchandise inventories 476,937 481,847
Other current assets 25,628 19,796
Total current assets 512,172 530,646
Property and equipment, net 174,827 173,239
Other assets, net 10,141 12,755
Total Assets $ 697,140 $ 716,640
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings $ 47,926 $ --
Current maturities of long-term debt
and capital lease obligations 22,714 20,895
Accounts payable 107,375 128,834
Accrued expenses and other 44,349 44,426
Accrued insurance 12,105 10,870
Accrued restructuring charges 26,633 28,400
Total current liabilities 261,102 233,425
Long-term debt 120,206 129,833
Capital lease obligations 80,518 83,312
Other liabilities 14,885 14,996
Total Liabilities 476,711 461,566
Stockholders' Equity
Common stock 31,342 31,345
Additional paid-in capital 297,646 297,643
Retained earnings (accumulated deficit) (105,219) (70,574)
223,769 258,414
Loans under Stock Purchase Loan Plan (3,340) (3,340)
Total Stockholders' Equity 220,429 255,074
Total Liabilities and
Stockholders' $ 697,140 $ 716,640
CINCINNATI, June 18, 1996 - Eagle-Picher Industries (OTC:
EPIHQ.U) today announced that sales for the second quarter ended May
31, 1996 were $235.1 million compared with $225.4 million for the
second quarter of 1995. Operating income for the period was $19.3
million compared with $19.1 million for the same period last year.
Net income for the second quarter of 1996 was $16.8 million or $1.52
per share which was equal to the $16.8 million or $1.52 per share
for the second quarter of 1995. At the end of the second quarter of
1996, the Company's cash position was $109.7 million. This compares
with a cash position of $93.3 million at the end of the fiscal year
and $96.8 million at the end of the second quarter of 1995.
Thomas E. Petry, Eagle-Picher Chairman, said that, "sales for
the Automotive Group for the second quarter of 1996 were ahead of
the levels of the second quarter of 1995 while operating income was
essentially the same as that of the second quarter of 1995. The
results for the second quarter of 1996 contrast sharply with those
of the first quarter of 1996 when the low level of automotive
production, inclement weather, and customer delays in new program
start-ups caused sales and operating income to be well below the
levels of the first quarter of 1995. Despite a strike at the General
Motor's Delphi Division, an important customer, increased production
levels in the North American market and a favorable product mix were
important factors in the improving trend during the second quarter
of 1996. European operations did well during the second quarter as
these operations continue to increase market share. Start-up costs
associated with expansions and continued delays by one customer in
meeting anticipated production schedules placed pressure on profit
margins during the quarter.
"Sales for the Machinery Group were essentially equal to those
of the second quarter of last year while operating income declined.
The primary reason for the decline in operating income was reduced
shipments of earth moving machinery by the Construction Equipment
Division. Shipments of special purpose batteries by the Eagle-
Picher Technologies Division (formerly the Electronics Division
which was merged with the Specialty Materials Division to form Eagle-
Picher Technologies) were strong. The Division is the largest
international supplier of power systems for commercial, military,
and weather satellites in the world. Results for the remaining
operations in the Machinery Group were mixed.
"Sales and operating income for the Industrial Group increased
in the second quarter of 1996 over the results for last year's
second quarter. Shipments of diatomaceous earth products, both to
the domestic and to the international markets, were at a high level.
Diatomaceous earth products are used for high purity filtration in
the food and beverage industry and in a variety of general
industrial applications. Eagle-Picher Technologies' operations in
the Industrial Group enjoyed an outstanding quarter. These
operations produce germanium substrates for solar cells which are
used on commercial, weather, and military satellites. Shipments of
boron isotopic compounds were also at a high level. Recent
penetration of the European nuclear market has provided an excellent
growth opportunity for boron products.
"As reported previously, on April 9, 1996, the Company and its
affiliated chapter 11 debtors filed a First Amended Consolidated
Plan of Reorganization under Chapter 11 (the "Plan") and a proposed
First Amended Joint Disclosure Statement pursuant to Section 1125 of
the Bankruptcy Code (the "Disclosure Statement"). A hearing to
consider approval of the Disclosure Statement has been tentatively
scheduled for July 1996 before the Bankruptcy Court. Pursuant to
the Bankruptcy Code, the acceptance or rejection of a plan of
reorganization may not be solicited from the holder of a claim
unless at the time of or before such solicitation there is
transmitted to such holder the plan or a summary of the plan and a
disclosure statement approved by the Bankruptcy Court as containing
information of a kind and in sufficient detail that would enable a
hypothetical reasonable investor typical of holders of claims to
make an informed judgment about the plan. In addition, in June,
1996, the United States District Court for the Southern District of
Ohio, Western Division, heard oral arguments on the appeals filed
with respect to the Bankruptcy Court's order dated December 4, 1995,
as amended, which estimated the Company's aggregate liability on
account of present and future asbestos-related personal injury
claims to be approximately $2.5 billion. The appeals were filed by
the Unsecured Creditors' Committee ("UCC"), the Equity Security
Holders' Committee, and independently by two members of the UCC. A
decision is pending by the U.S. District Court.
"Decisions with respect to the above matters will have a direct
impact on the plan of reorganization process. Accordingly, at this
time, it is not possible to predict when a plan of reorganization
will be confirmed and become effective.
"It is expected that economic activity will be at a reasonably
high level during the second half of 1996. Several operations are
serving growing markets and/or are increasing market share, while
others are serving sluggish segments of the economy. On balance,
and based on forecasts from the Company's Divisions, results for the
second half of 1996 could approximate those of the second half of
1995."
The figures follow:
(Data in thousands except per share)
Three Months Ended May 31 1996 1995
Net sales $235,126 $225,378
Operating income 19,281 19,147
Other non-operating items (432) (479)
Reorganization items 22 (331)
Income before taxes 18,871 18,337
Net income 16,756 16,776
Net income per share 1.52 1.52
Average shares 11,041 11,041
Six Months Ended May 31 1996 1995
Net sales $443,708 $422,981
Operating income 32,652 34,260
Other non-operating items (592) (581)
Reorganization items 90 (756)
Income before taxes 32,150 32,923
Net income 28,264 29,808
Net income per share 2.56 2.70
Average shares 11,041 11,041
NASHVILLE, Tenn. -- June 18, 1996 -- Shoney's, Inc.
today reported results for the second quarter of fiscal 1996 with
revenue for the 12-week period of $257.7 million, up 2% from $253.2
million in the second quarter of fiscal 1995. Comparable restaurant
sales for the second quarter of 1996 were up 1.0%, including a menu
price increase of 1.6%. Comparable restaurant sales for the
Company's Shoney's Restaurants were down 1.0%, while the Company's
Captain D's restaurants had a comparable restaurant sales increase
of 6.4%. Income from continuing operations for the second quarter
was $6.4 million, or $.15 per share on a primary basis, compared to
$6.2 million, or $.15 per share, in the prior year.
C. Stephen Lynn, chairman of the board and chief executive
officer, said, "I am pleased with the progress in our turnaround. I
am confident we have the right team and the right programs in place
to build long term shareholder value. We have continued to focus on
restoring operational execution and returning the art of hospitality
to our Shoney's Restaurants. The increase in customer compliments
and decline in customer complaints are tangible examples that our
plan is working. But we have much yet to do."
Lynn said, "I am excited by the continued excellent performance
of our Captain D's restaurants. The increase in comparable
restaurant sales of 6.4% represents an outstanding performance in
all areas of the concept -- from operations to marketing, training,
remodels and new products." Lynn also noted, "The new leadership of
our casual dining group continues to make progress which was
reflected by slight improvements in store level performance during
the quarter."
Revenues for the first two quarters of fiscal 1996, a 28-week
period, were $557.9 million, down 1%. Comparable restaurant sales
for the first two quarters of fiscal 1996 were down 0.5%, which
included a menu price increase of 1.5%. Net income for the first
two quarters was $30.5 million, or $.70 per share on a fully diluted
basis. Results for the first two quarters include a gain of $22.1
million, net of taxes, on the sale of Mike Rose Foods, Inc. which
was consummated in the first quarter. This sale completed the
divestitures announced in January 1995 as part of the Company's
restructuring plan. Income from continuing operations in the first
two quarters of 1996 was $8.1 million, or $.19 per share on a
primary basis, compared to $14.2 million, or $.34 per share, in the
prior year.
Lynn continued, "I am expecting a late summer closing of the
acquisition of TPI Restaurants. While the closing of the
transaction has been delayed from the original plan, it is expected
to be completed within the next two months. The Company has
received lender approval and has arranged the necessary financing to
complete the transaction. As soon as the Company's registration
statement and joint proxy is approved by the Securities and Exchange
Commission, a shareholder meeting will be held as soon as
practicable and one transaction will be completed."
The Company opened 30 restaurants in the first half of 1996,
including 25 Shoney's Restaurants, two Captain D's, two Pargo's and
One BarbWire's. The Company acquired 15 of the 25 Shoney's
Restaurants and both Pargo's opened in the first two quarters from
franchisees. Franchisees opened five restaurants in the first two
quarters of 1996, resulting in a net decrease of 43 franchised
restaurants. The Company expects to open or acquire 31 restaurants
during the 1996 fiscal year, including 26 Shoney's Restaurants. At
the end of the quarter, the Company had a total of 1,507 restaurants
in 34 states, including 724 company-owned and 783 franchised
restaurants.
The Company's common stock is traded on the New York Stock
Exchange under the symbol "SHN."
Shoney's, Inc. and Subsidiaries
Consolidated Balance Sheet
May 12, Oct. 29
Assets 1996 % 1995 %
Current assets
Cash and cash
equivalents $ 5,820,242 1.1 $ 7,513,588 1.4
Notes and accounts
receivable 12,395,131 2.3 13,013,821 2.4
Inventories 34,005,375 6.2 33,483,964 6.3
Deferred taxes and
other current
assets 34,030,680 6.2 30,716,885 5.8
Net current assets
of discontinued
operations 0 14,495,812 2.7
Total current
assets 86,251,428 15.8 99,224,070 18.6
Property, plant and equipment
Land 122,701,557 22.4 117,104,203 21.9
Buildings 242,850,055 44.4 227,124,559 42.5
Restaurant and
other equipment 271,219,262 49.6 256,936,595 48.0
Leasehold
improvements 57,230,997 10.5 57,330,822 10.7
Rental properties 24,679,070 4.5 24,136,182 4.5
Buildings under
capital leases 19,744,107 3.6 18,122,394 3.4
Construction in
progress 7,797,346 1.4 9,789,522 1.8
----------- ---- ----------- -----
746,222,394 136.4 710,544,277 132.8
Less accumulated
depreciation and
amortization (306,819,543) (56.1) (291,057,795) (54.4)
Net property, plant
and equipment 439,402,851 80.3 419,486,482 78.4
Other assets
Deferred charges and
other intangible
assets 13,590,635 2.5 7,085,784 1.3
Other 7,847,915 1.4 9,219,658 1.7
Total other assets 21,438,550 3.9 16,305,442 3.0
----------- ----- ----------- ----
$547,092,829 100.0 $535,015,994 100.0
Liabilities and Shareholders'
Equity (Deficit)
Current liabilities
Accounts payable $ 31,012,233 5.7 $ 33,099,813 6.2
Federal and state
income taxes 6,306,108 1.2 7,486,210 1.4
Accrued expenses 74,609,667 13.6 74,312,652 13.9
Reserve for litigation
settlement 23,154,539 4.2 23,372,889 4.4
Debt and capital
less obligations
due within
one year 43,802,293 8.0 34,448,154 6.4
Total current
liabilities 178,884,840 32.7 172,719,718 32.3
Long-term debt
and capital lease
obligations due
after one year 384,853,003 70.3 406,032,446 75.9
Reserve for litigation
settlement 27,385,434 5.0 38,727,434 7.2
Deferred income
taxes 23,120,797 4.2 19,223,797 3.6
Deferred income and
other liabilities 6,523,887 1.2 6,619,234 1.2
Shareholders' Equity (Deficit)
Common stock 41,650,573 7.6 41,510,659 7.8
Additional paid-in
capital 61,895,691 11.3 60,770,176 11.4
Retained earnings
(deficit) (180,054,706) (32.8) (210,587,470) (39.4)
Unrealized gain on
securities available
for sale 2,833,310 0.5 0
Total shareholders'
equity (deficit) (73,675,132) (13.4) (108,306,635) (20.2)
------------ ------ ------------- ------
$547,092,829 100.0 $535,015,994 100.0
Consolidated Statement of Income
Twelve Weeks Ended May 12, 1996 and May 14, 1995
1996 1995
Amount % Amount %
Revenues
Net sales $251,372,788 97.5 $248,151,606 98.0
Franchise fees 5,445,261 2.1 5,721,458 2.3
Other income 893,710 0.4 (678,347) (0.3)
------------ ----- ------------ -----
257,711,759 100.0 253,194,717 100.0
Costs and Expenses
Cost of sales
Food and supplies 104,816,833 40.7 104,889,933 41.4
Restaurant labor 62,166,825 24.1 58,771,718 23.2
Operating expenses 55,229,883 21.4 53,996,082 21.4
------------ ------ ----------- -----
222,213,541 86.2 217,657,733 86.0
General and
administrative 16,381,048 6.4 14,958,418 5.9
Interest expense 8,147,363 3.1 9,433,835 3.7
Restructuring
expenses 1,141,548 0.5
------------ ------ ----------- -----
246,741,952 95.7 243,191,534 96.1
Income from continuing
operations before
income taxes 10,969,807 4.3 10,003,183 3.9
Provision for
income taxes 4,544,000 1.8 3,801,000 1.5
Income from continuing
operations 6,425,807 2.5 6,202,183 2.4
Discontinued operations,
net of income tax 2,291,419 0.9
Net income $ 6,425,807 2.5 $ 8,493,602 3.3
Earnings per common share
Primary:
Income from continuing
operations $0.15 $0.15
Discontinued operations 0.06
Net income $0.15 $0.20
Fully diluted:
Income from continuing
operations $0.15 $0.15
Discontinued operations 0.06
Net income $0.15 $0.20
Weighted average shares
outstanding
Primary 41,725,679 41,521,552
Fully diluted 41,725,679 41,521,552
Consolidated Statement of Income
Twenty-eight Weeks Ended May 12, 1996 and May 14, 1995
1996 1995
Amount % Amount %
Revenues
Net sales $544,155,710 97.5 $549,821,737 97.6
Franchise fees 11,755,188 2.1 12,853,920 2.3
Other income 1,977,954 0.4 904,066 0.1
------------ ----- ------------ -----
557,888,852 100.0 563,579,723 100.0
Costs and Expenses
Cost of sales
Food and supplies 227,695,168 40.8 232,630,043 41.3
Restaurant labor 137,786,452 24.7 130,726,667 23.2
Operating expenses 123,200,000 22.1 120,847,154 21.4
------------ ------ ----------- -----
488,681,620 87.6 484,203,864 86.9
General and
administrative 36,520,442 6.5 33,149,327 5.9
Interest expense 18,965,217 3.4 21,600,374 3.8
Restructuring
expenses 1,699,873 0.3
------------ ------ ----------- -----
544,167,279 97.5 540,653,438 95.9
Income from continuing
operations before
income taxes 13,721,573 2.5 22,926,285 4.1
Provision for
income taxes 5,667,000 1.0 8,712,000 1.5
Income from continuing
operations 8,054,573 1.5 14,214,285 2.6
Discontinued operations,
net of income tax 397,816 0.1 4,942,907 0.8
Gain on sale of discontinued
operations, net of income
tax 22,080,375 3.9
Net income $ 30,532,764 5.5 $ 19,157,192 3.4
Earnings per common share
Primary:
Income from continuing
operations $0.19 $0.34
Discontinued operations 0.01 0.12
Gain on sale of
discontinued operations 0.53
Net income $0.73 $0.46
Fully diluted:
Income from continuing
operations $0.22 $0.34
Discontinued operations 0.01 0.12
Gain on sale of
discontinued operations 0.47
Net income $0.70 $0.46
Weighted average shares
outstanding
Primary 41,673,605 41,447,375
Fully diluted 46,895,656 41,447,375
Consolidated Statement of Cash Flow
Twenty-eight Weeks Ended
May 12, May 14,
1996 1995
Operating activities
Net income $ 30,532,764 $ 19,157,192
Adjustments to reconcile net
income to net cash provided by
operating activities:
Income from discontinued
operations, net of taxes (397,816) (4,942,907)
Gain on sale of discontinued
operations, net of taxes (22,080,375)
Depreciation and amortization 23,587,514 23,322,279
Amortization and deferred
charges and other non-cash
charges 5,922,129 3,914,231
Realized and unrealized loss
on marketable securities and
sale of other assets 1,491,837
Change in deferred income taxes 3,897,000 2,348,000
Changes in operating assets and
liabilities (14,394,348) 8,134,778
Net cash provided by continuing
operating activities 27,066,868 53,425,410
Net cash (used by) provided by
discontinued operating
activities (655,622) 6,313,090
Net cash provided by operating
activities 26,411,246 59,738,500
Investing activities
Cash required for property, plant
and equipment (47,154,734) (37,399,057)
Cash required for assets held
for sale (859,969)
Proceeds from disposal of
property, plant and equipment 4,128,630 2,924,131
Proceeds from disposal of
discontinued operations 51,279,601
Cash required for other assets (5,012,751) (569,920)
Net cash provided (used by)
investing activities 3,240,746 (35,904,815)
Financing activities
Payments on long-term debt
and capital lease obligations (72,060,630) (94,610,725)
Proceeds from long-term debt 47,000,000 78,000,000
Net proceeds from short-term
borrowings 7,607,000 4,918,000
Payments on litigation
settlement (11,560,350) (11,692,420)
Cash required for debt
issue costs (2,753,171) (1,005,342)
Proceeds from exercise of
employee stock options 421,813 1,355,364
Net cash used by financing
activities (31,345,338) (23,035,123)
Change in cash $ (1,693,346) $ 798,562