Flagstar Reports Second Quarter Results
SPARTANBURG, S.C.--Aug. 13, 1997--
(OTC:FLST) today reported revenue of $659 million for the second
quarter ended July 2, 1997, compared with $627 million in the
same period last year.
Earnings before interest, taxes, depreciation, amortization
and restructuring expenses (EBITDA) increased to $79.7 million,
versus $73.4 million in the prior year quarter. Operating income
increased to $46.2 million, compared with $43.4 million in the
same quarter last year.
"We are pleased with overall results for the quarter and
are on target with the projections set forth in our financial
restructuring plan," said James B. Adamson, chairman and
chief executive officer f Flagstar. "Both revenue and EBITDA
increased during the quarter, primarily due to last year's
acquisition of Coco's and Carrows. Denny's, Hardee's and Quincy's
all improved profit margins despite sluggish sales. Denny's
earnings quality also improved, with gains on sale of restaurants
to franchisees accounting for far less of the quarter's operating
income than in the prior year quarter. El Pollo Loco resumed
comparable store sales growth during the quarter, while Coco's
and Carrows recorded another quarter of solid cash flow
performance."
"The Company's financial restructuring plan is
progressing well," said Adamson. "We continue to expect
emergence from Chapter 11 during the Fall of this year with a
stronger capital structure that will help us resume a course of
growth and profitability."
At the beginning of 1997, the Company changed its fiscal year-
end from December 31 to the last Wednesday of the calendar year.
Concurrent with this change, the Company changed to a four-four-
five week closing calendar which is the industry standard, and
generally results in four thirteen-week quarters during the year
with each quarter ending on a Wednesday. Due to the timing of
this change, year-to-date results for 1997 include five
additional days at Denny's, one additional day at Hardee's and
Quincy's, as well as seven additional days at El Pollo Loco. The
extra days all occurred in the first quarter. Due to the
continued substantial debt and interest expense, as well as
ongoing restructuring expenses, the Company recorded a second
quarter net loss of $32.3 million, or $0.84 per share, compared
with a net loss of $17.4 million, or $0.49 per share, in the
prior year quarter.
Year-To-Date Results
For the two quarters ended July 2, 1997, revenue increased to
$1.34 billion, compared with $1.18 billion in the same period
last year. EBITDA increased to $137.5 million, versus $129.9
million in the prior year period. Operating income was $69.2
million, compared with $70.8 million in the same period last
year. The Company recorded a net loss of $84.0 million for the
year-to-date period, or $2.15 per share, compared with a net loss
of $44.7 million, or $1.22 per share, in the prior year.
Concept Results
Denny's second quarter operating income, excluding gains on
the sale of restaurants to franchisees, improved to $29.9
million, compared with $25.6 million in the prior year quarter.
Comparable store sales declined by 5.5 percent, with the decrease
driven by lower guest counts, partially offset by an increase in
average guest check. These changes reflect the impact of the
September 1996 price increase which has also resulted in improved
profit margins. The Denny's domestic system opened 26 new
restaurants and closed four restaurants during the quarter.
During the year-to- date period, the Denny's domestic system
opened 47 new restaurants and closed 11 restaurants.
Hardee's second quarter operating income increased to $9.2
million, versus $8.2 million in the prior year quarter.
Comparable store sales declined by 9.4 percent, reflecting
continued aggressive promotions by competitors, compounded by
weakness in Hardee's brand positioning and advertising programs.
Despite the sales decline, the continuing focus on flow-through
management resulted in increased profitability.
Quincy's operating income increased to $2.4 million, compared
with $1.8 million in the prior year quarter. Comparable store
sales at Quincy's declined by 7.3 percent during the quarter. The
increase in operating income was primarily attributable to
improved food cost management.
Comparable store sales at El Pollo Loco increased 1.9 percent
versus the prior year quarter. This increase was driven by a
higher guest check average due to a shift in promotional emphasis
versus the same period last year. Operating income was $4.1
million, versus $4.3 million in the prior year quarter. The El
Pollo Loco domestic system opened four new restaurants and closed
one restaurant during the quarter. During the year-to-date
period, the El Pollo Loco domestic system opened seven new
restaurants and closed one restaurant.
FRD Acquisition Co., a wholly-owned subsidiary of Flagstar
Corporation and holding company for Coco's and Carrows,
contributed a full quarter of operating results for the second
quarter of 1997, but only contributed four weeks of results for
the prior year quarter. Revenue and operating income for the
quarter were $122.4 million and $8.5 million, respectively.
Coco's contributed $5.4 million in operating income, while
Carrows contributed $3.1 million in operating income for the
period. Comparable store sales declined 1.5 percent at Coco's and
3.2 percent at Carrows during the quarter. The Coco's domestic
system opened four new restaurants and closed one restaurant
during the quarter, while five new international restaurants were
opened in Japan and Korea. Carrows closed two restaurants during
the quarter. During the year- to-date period, the Coco's domestic
system opened five new restaurants and closed one restaurant,
while nine new international restaurants were opened and one was
closed. Carrows opened one new restaurant and closed four
restaurants during the year-to-date period.
Flagstar is one of the nation's largest restaurant companies
with over 3,200 moderately-priced restaurants and annualized
revenue of approximately $2.7 billion. Flagstar owns and operates
the Carrows, Coco's, Denny's, El Pollo Loco and Quincy's Family
Steakhouse restaurant brands and is the largest franchisee of
Hardee's.
Certain matters discussed in this release constitute forward
looking statements and involve risks, uncertainties, and other
factors which may cause the actual performance of Flagstar
Companies, Inc., its subsidiaries and underlying concepts to be
materially different from the performance indicated or implied by
such statements. Such factors include, among others: competitive
pressures from within the restaurant industry; the level of
success of the Company's operating initiatives and advertising
and promotional efforts, including the initiatives and efforts
specifically mentioned above; adverse publicity; changes in
business strategy or development plans; terms and availability of
capital; regional weather conditions; overall changes in the
general economy, particularly at the retail level and other
factors from time to time set forth in the Company's SEC reports,
including but not limited to the discussion in Management's
Discussion and Analysis in the Company's Annual Report on Form
10-K for the year ended December 31, 1996 (and in the Company's
subsequent quarterly reports on Form 10-Q).
FLAGSTAR COMPANIES,
INC.
Statements of Consolidated
Operations
(Unaudited)
(in millions, except Quarter Ended
Two Qtrs. Ended
per share amounts) 7/2/97 6/30/96
7/2/97 6/30/96
Operating Revenue $ 659.4 $ 626.6
$1,335.2 $1,177.0
Operating Expenses:
Product costs 192.3 192.5
390.0 359.4 Payroll and benefits
243.4 235.6 500.2 450.1 Deprec.
and amortization 33.5 30.0 68.2
59.1 Utilities expense 26.5
24.3 54.0 47.1 Other
117.5 100.8 253.6 190.5
613.2 583.2
1,266.0
1,106.2
Operating Income 46.2 43.4
69.2 70.8 Other Charges:
Interest and debt
expense - net (a) 68.0 62.5
136.5 120.2
Other - net 2.2 0.2
3.7 0.1
Loss Before Reorganization
Expenses and Taxes (24.0) (19.3)
(71.0) (49.5)
Reorganization Expenses (b) 7.9 --
12.0 -- Loss Before Taxes
(31.9) (19.3) (83.0) (49.5) Provision
For (Benefit From)
Income Taxes 0.4 (1.9)
1.0 (4.8)
Net Loss (32.3) (17.4)
(84.0) (44.7) Dividends on Pref. Stock (c)
(3.5) (3.5) (7.1) (7.1) Net Loss
Applicable to
Common Shareholders $ (35.8) $ (20.9)
$(91.1) $ (51.8)
Loss Per Share Applicable
to Common Shareholders $ (0.84) $ (0.49)
$(2.15) $ (1.22)
Average Outstanding and
Equivalent Common Shares 42.4 42.4
42.4 42.4
NOTES:
(a) Interest and debt expense for Coco's and
Carrows was
$7.5 million and $2.5 million for the
quarters ended July 2, 1997 and June 30
,1996, respectively, and $15.0 million
and $2.5 million for the two quarters
ended July 2, 1997 and June 30, 1996,
respectively.
(b) Reorganization expenses include
professional fees and
other expenditures incurred in
conjunction with the Company's
reorganization under Chapter 11 of the
Bankruptcy Code.
(c) Includes undeclared dividends for the
quarter and two
quarters ended July 2, 1997 of $3.5
million and $7.1 million, respectively.
FLAGSTAR COMPANIES,
INC.
Results by Operating
Entity
(Unaudited)
Quarter Ended
Two Qtrs.
Ended
(in millions) 7/2/97 6/30/96
7/2/97 6/30/96
Revenue:
Denny's (d) $ 296.4 $ 317.4 $
611.5 $ 623.1 Hardee's
145.4 160.0 282.9 305.1 Quincy's
61.8 66.7 126.0
135.2 El Pollo Loco 33.4
33.3 65.4 64.4
Subtotal 537.0 577.4
1,085.8 1,127.8
Coco's 69.0 27.0
140.5 27.0 Carrows
53.4 22.2 108.9 22.2
Total Revenue $ 659.4 $ 626.6
$1,335.2 $1,177.0
Operating Income:
Denny's (e) $ 30.1 $ 31.7 $
54.1 $ 52.5 Hardee's
9.2 8.2 12.1 12.8 Quincy's
2.4 1.8 2.6
7.1 El Pollo Loco (e) 4.1
4.3 7.0 7.2 Processing operation
(f) -- 2.8 -- 5.3
Corporate and other (8.1) (9.3)
(22.2) (18.0)
Subtotal 37.7 39.5
53.6 67.0
Coco's 5.4 1.9
9.7 1.9 Carrows
3.1 2.0 5.9 2.0
Total Operating Income $ 46.2 $ 43.4 $
69.2 $ 70.8
EBITDA:
Denny's (e) $ 41.0 $ 43.7 $
77.1 $ 78.7 Hardee's
18.5 18.1 30.5 32.1 Quincy's
5.5 4.8 8.8
12.8 El Pollo Loco (e) 5.3
5.8 9.7 10.1 Processing operation
(f) -- 3.2 -- 6.1
Corporate and other (6.6) (8.6)
(19.3) (16.3)
Subtotal 63.7 67.0
106.8 123.5
Coco's 9.6 3.4
18.0 3.4 Carrows
6.4 3.0 12.7 3.0
Total EBITDA $ 79.7 $ 73.4 $
137.5 $ 129.9
Gains on Sale of Restaurants:
Denny's $ 0.2 $ 6.1 $
0.4 $ 6.1 El Pollo Loco $
0.2 $ 0.2 $ 0.2 $ 0.5
NOTES:
(d) Includes the revenue of the food processing
operation in 1996.
(e) Operating income and EBITDA include gains
on sale of
restaurants as indicated.
(f) The food processing operation was sold on
September 30, 1996.
EBITDA Operating income before deprec. and
amortization expense.
FLAGSTAR COMPANIES, INC.
Condensed Consolidated Balance
Sheets
(Unaudited)
(in millions) 7/2/97
12/31/96
Assets
Current Assets:
Cash and cash equiv. $ 57.3 $
92.4 Other current assets 74.9
98.3
132.2
190.7
Long-Term Assets 1,465.6
1,496.7
Total Assets $1,597.8 $
1,687.4
Liabilities
Current Liabilities:
Current maturities of
long-term debt $ 76.6 $
62.9
Accounts payable and other
accrued liabilities 350.7
420.4
427.3
483.3
Long-Term Liabilities:
Debt, less current mat. 664.7
2,179.4 Other 237.4
252.2
902.1
2,431.6
Liabilities Subject
to Compromise (g) 1,579.9
--
Total Liabilities 2,909.3
2,914.9
Shareholders' Deficit (1,311.5)
(1,227.5)
Total Liabilities and
Shareholders' Deficit $1,597.8 $
1,687.4
NOTES:
(g) The Company's financial statements as of
July 2,1997 have
been presented in conformity with the
AICPA's Statement of Position 90-7,
"Financial Reporting By Entities in
Reorganization Under the Bankruptcy
Code" ("SOP 90-7"). Accordingly, all
prepetition liabilities that are subject
to compromise are segregated in the
Company's consolidated balance sheets.
FLAGSTAR COMPANIES, INC.
Statistical Data by Operating
Entity
(Unaudited)
Comparable Store Sales: Quarter Two
Qtrs. (Company Operated) Ended
Ended (Incr./(Decr.) vs. Prior Yr. 7/2/97
7/2/97
Denny's -5.5%
-3.9% Hardee's -9.4%
-8.0% Quincy's -7.3%
-7.0% El Pollo Loco 1.9%
-0.9% Coco's (h) -1.5%
-1.1% Carrows (h) -3.2%
-2.0%
Average Guest Check:
(Company Operated) Quarter Ended
Incr./ (Comparable Store Basis)
7/2/97 6/30/96 (Decr.)
Denny's $5.55
$4.92 12.8% Hardee's
$3.33 $3.11 7.1% Quincy's
$6.31 $5.80 8.8% El
Pollo Loco $6.80 $6.37
6.8% Coco's (h) $6.73
$6.90 -2.5% Carrows (h)
$6.50 $6.30 3.2%
Average Guest Check:
(Company Operated) Two Qtrs. Ended
Incr./ (Comparable Store Basis)
7/2/97 6/30/96 (Decr.)
Denny's $5.48
$4.88 12.3% Hardee's
$3.28 $3.12 5.1% Quincy's
$6.31 $5.94 6.2% El
Pollo Loco $6.69 $6.51
2.8% Coco's (h) $6.66
$6.81 -2.2% Carrows (h)
$6.44 $6.19 4.0%
Quarter
Ended
Incr./
Average Unit Sales: 7/2/97
6/30/96 (Decr.) (in thousands)
Denny's:
Company $315.7
$330.7 -4.5% Franchise
$266.2 $273.6 -2.7%
Hardee's $250.8
$275.9 -9.1%
Quincy's $311.8
$335.0 -6.9%
El Pollo Loco:
Company $311.2
$298.6 4.2% Franchise
$222.3 $219.0 1.5%
Coco's (h):
Company $367.4
$370.9 -0.9% Franchise
$434.0 $427.3 1.6%
Carrows (h) $339.6
$343.6 -1.2%
Two Quarters
Ended Incr./
Average Unit Sales: 7/2/97
6/30/96 (Decr.) (in thousands)
Denny's:
Company $652.0
$646.6 0.8% Franchise
$542.5 $533.7 1.6%
Hardee's $488.0
$526.2 -7.3%
Quincy's $634.3
$677.9 -6.4%
El Pollo Loco:
Company $611.8
$574.7 6.5% Franchise
$443.2 $427.7 3.6%
Coco's (h):
Company $753.0
$728.1 3.4% Franchise
$874.9 $836.8 4.6%
Carrows (h) $688.9
$667.2 3.3%
NOTES:
(h) Coco's and Carrows were acquired on May 23,
1996. Prior year
data is provided for informational
purposes only.
FLAGSTAR COMPANIES, INC.
Statistical Data by Operating
Entity
(Unaudited)
Restaurant Units: 7/2/97 6/30/96
Denny's:
Company 891 911
Franchised 716 628
International licensee 26 26
1,633 1,565
Hardee's 579 580
Quincy's 198 199
El Pollo Loco:
Company 94 98
Franchised 143 126
International licensee 10 7
247 231
Coco's:
Company 185 184
Franchised 7 6
International licensee 286 261
478 451
Carrows:
Company 156 162
Franchised 1 --
157 162
3,292 3,188
CONTACT: Flagstar Companies Inc., Spartanburg Investor
Contact: Larry Gosnell, 864/597-8658 Media Contact: Karen
Randall, 864/597-8440
Toy Biz, Inc. Reports 1997 Second Quarter
Financial Results
NEW YORK, NY - Aug. 13 , 1997 - Toy Biz, Inc. (NYSE: TBZ)
today reported financial results for the second quarter ended
June 30, 1997. For the quarter, net sales were $34.5 million with
a net loss of $5.3 million, or $0.19 per share, compared to net
sales of $45.8 million and net income of $4.6 million, or $0.17
per share, in the second quarter a year ago. For the six months
ended June 30, 1997, net sales were $68.9 million with a net loss
of $4.8 million, or $0.17 per share, compared to net sales of
$84.2 million and net income of $7.8 million, or $0.28 per share,
for the first half of 1996.
The Company noted that 1997 second quarter results were
negatively impacted by extraordinary charges,including
professional service fees, sales allowances and other transaction
costs,relating to its involvement in the
believes that at least $6 to $7 million of its pretax loss of
approximately $8.8 million (or $0.14 of the $0.19 loss per share)
for the three months ended June 30, 1997 is directly attributable
to expenses associated with the extraordinary circumstances.
As previously announced, Toy Biz reached an agreement in
principle with Marvel Entertainment Group, Inc.,(NYSE: MRV) the
principal unsecured creditors of Marvel's holding companies and
The Chase Manhattan Bank, one of Marvel's principal secured
creditors, to combine Marvel and Toy Biz.
Under the proposed arrangement, Marvel and Toy Biz would be
combined in a transaction which provides the stockholders of Toy
Biz, other than Marvel, with 49% of the common stock of the
combined entity and provides the stockholders of Marvel,
including the unsecured creditors of Marvel's holding companies,
with 51% of the common stock of the combined entity pursuant to a
rights offering.
The agreement in principle is subject to the resolution of
some material open issues, negotiation of definitive agreements,
bankruptcy court approval and approval by Marvel's and Toy Biz's
boards of directors, among other conditions.
Toy Biz, Inc. designs, markets and distributes new and
traditional toys in the boys, girls, preschool and activity toy
categories featuring major entertainment and consumer brand name
properties under agreements with Marvel, NASCAR, Coleman, Disney,
Gerber, Henson, MCA/Universal and Warner Bros.
Forward-Looking Statements: Except for historical information
contained herein, the statements in this news release regarding
the Company's products, licensing relationships and growth plans
are forward-looking statements that are dependent upon certain
risks and uncertainties, including those relating to the outcome
of the Marvel bankruptcy, the level of media exposure or the
popularity of the Company's characters and trademarks, consumer
acceptance of the Company's new product introductions, the
Company's dependence on manufacturers in China, U.S. trade
relations with China, changing consumer preferences, production
delays or shortfalls and general economic conditions. Those and
other risks and uncertainties are described in the Company's
filings with the Securities and Exchange Commission, including
the Company's Annual Report on Form 10K and Quarterly Reports on
Form 10Q.
TOY BIZ, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Dollars in thousands, except
per share data)
(unaudited)
Three Months
Six
Months
Ended June
30,
Ended
June 30,
1997
1996
1997
1996
Net sales $34,452
$45,814 $68,866
$84,183
Cost of sales 22,257
22,939 42,158
42,672
Gross profit 12,195
22,875 26,708
41,511
Operating expenses:
Selling, general and
administrative 16,976
12,961 27,830
24,330
Depreciation and
amortization 3,895
2,442 6,789
4,586
Total operating expenses 20,871
15,403 34,619
28,916
Operating (loss) income (8,676)
7,472 (7,911)
12,595
Interest expense (income),
net 100
(184) 73
(350)
(Loss) income before (benefit)
provision for income
taxes (8,776)
7,656 (7,984)
12,945
(Benefit) provision for
income taxes (3,510)
3,062 (3,193)
5,178
Net (loss) income ($5,266)
$4,594 ($4,791)
$7,767
(Loss) earnings per share ($0.19)
$0.17 ($0.17)
$0.28
Weighted average number
of common and common
equivalent shares
outstanding
(in thousands) 27,746
27,134 27,745
27,168
SOURCE Toy Biz, Inc./CONTACT: Joseph Kist, 212-704-8239, or
Devin McDonell, 212-704-4523, both of Edelman Financial, for Toy
Biz/
NEW YORK, NY --August 13, 1997--Jenna Lane, Inc. (NASDAQ:
JLNY) today announced financial results for its first quarter
ending June 30, 1997.
Net sales for the three months ended June 30, 1997 (first
quarter of fiscal 1998) were a record $11.7 million as compared
to net sales of $9.7 million for the three months ended June 30,
1996. Operating income for the three months ended June 30, 1997
was $610,065, compared to $359,447 for the same period last year.
Net income for the three months ended June 30, 1997 was $213,493,
or 5 cents per share compared to $184,447 or 8 cents per share
for the same period last year. Earnings per share were based upon
the weighted average of common and common equivalent shares
outstanding of 5,319,492 and 2,072,175 for the three months ended
June 30, 1997 and 1996 respectively. Income for the first quarter
of fiscal 1998 was adversely affected by a $243,500 pre-tax or 2
cents per share after-tax non-recurring provision for credit loss
taken as a result of Montgomery
Ward's filing for bankruptcy, for which the company had
entered into a loss sharing agreement with its factor. Results
for the three months ended June 30, 1996 include $25,000 in non-
recurring charges.
Mitchell Dobies, president and co-chief executive officer,
commented, "Bookings for the second quarter of fiscal 1998
continue to be strong." The order backlog as of August 1,
1997 was $7.6 million vs. $5.1 million at August 1, 1996. The
company continues to open new key accounts, as well as expanding
its higher margin import sales volume.
The company was taken public March 1997 by Walsh Manning
Securities, LLC in an offering which raised approximately $6.5
million. Jenna Lane, Inc. is a leading women's apparel
manufacturer. The following is a condensed summary of operations
for the three months ended June 30 (unaudited)
1997
1996
Net Sales $11,734,842
$9,724,079 Operating Income
610,085 350,447 Net Income
213,493 184,447 Net Income Per
Common Share 0.05 0.08
CONTACT: Jenna Lane, New York Mitchell Dobies, 212/704-0002
Today's Man Announces Increased Second
Quarter Earnings and Positive Comparable Store Sales
MOORESTOWN, N.J., Aug. 13 , 1997 -
Today's Man, Inc. (Nasdaq: TMANQ), operating under the
protection of Chapter 11 of the U.S. Bankruptcy Code as a
Debtor-In-Possession, today announced continued improvement in
its financial and operational performance in the second quarter
ended August 2, 1997. The Company reported net income of
$669,100, or $0.06 per share, versus a net loss of $787,600, or
($0.07) per share in the second quarter of 1996. Net sales for
the second quarter increased to $50.5 million from $45.3 million
in the second quarter of 1996. Comparable store sales increased
11.4% for the 25 superstores in operation at the end of each
quarter, respectively.
The Company reported net income for the six months of 1997 of
$827,800, or $0.08 per share, versus a net loss of $4,996,300, or
($0.46) per share for the six months of 1996. Net sales for the
six months increased to $94.4 million from $91.7 million for the
six months of 1996. Comparable store sales increased 7.5% for the
25 superstores in operation at the end of each six month period,
respectively. The Company had 10,861,005 weighted average
outstanding shares during all relevant periods presented.
"The increases in both sales and income through the first
six months of this year are the result of the successful
turnaround strategy Today's Man has put in place and the hard
work of our management team and associates," said Chairman
and CEO David Feld. "The strong performance has made it
possible for the Company to file a reorganization plan which
provides our creditors with 100% recovery of allowed claims and
we envision emerging from bankruptcyprotection in the coming
months."
In addition to an improved merchandising strategy, the major
focus of Today's Man's turnaround efforts has been on reducing
operating expenses and increasing gross margins. The Company has
made significant progress in these two areas resulting in a $5
million increase in EBITDA to $4.9 million for the first six
months of 1997. EBITDA for the twelve month period ended August
2, 1997 was approximately $12.7 million. For the first six
months, gross margin as a percentage of sales has increased to
35.9% versus 32.5% for the six months of last year. Selling,
general and administrative expenses as a percentage of sales have
decreased to 33.0% from 35.4%.
Today's Man, which currently operates 25 superstores in the
greater Philadelphia, New York and Washington markets, is a men's
apparel superstore retailer offering a wide selection of tailored
clothing, furnishings, sportswear and shoes at everyday low
prices.
Certain statements in this press release which are not
historical facts, including, without limitation, statements as to
the Company's planned results for 1997 or as to management's
beliefs, expectations and opinions are forward-looking statements
that involve risks and uncertainties and are subject to change at
any time. Certain factors, including, without limitation the risk
that the assumptions upon which the forward-looking statements
are based ultimately may prove to be incorrect, risks associated
with the Company's Chapter 11 petition, and other risks detailed
from time to time in the Company's filings with the Securities
and Exchange Commission, including its Annual Report on Form 10-K
and quarterly reports on Form 10-Q, can cause actual results and
developments to be materially different from those expressed or
implied by such forward looking statements. A copy of the
Company's Annual Report on Form 10-K for the fiscal year 1996 can
be obtained without charge, except for exhibits to the report, by
sending a written request to Today's Man.
Today's Man,
Inc.
(Debtor-In-Posses
sion)
CONSOLIDATED STATEMENTS
OF INCOME
For Thirteen Weeks Ended
For Twenty-Six
Weeks Ended
AUG. 2, 1997 AUG. 3, 1996
AUG. 2, 1997
AUG. 3, 1996
Net Sales $50,465,600 $45,298,200
$94,394,500
$91,695,600
Cost of goods
sold 32,465,900 28,701,700
60,463,700
61,881,500
Gross profit 17,999,700 16,596,500
33,930,800
29,814,100
Selling, general
and administrative
expenses 16,092,000 16,338,400
31,154,100
32,436,400
Income (loss) from
operations 1,907,700 258,100
2,776,700
(2,662,300)
Reorganization
items, net 1,268,200 1,060,500
1,921,800
2,346,200
Interest expense and
other expense
(income), net (29,600)
(14,800) (26,800)
27,800
Income (loss)
before income
taxes $669,100
$(787,600) $881,700
$(4,996,300)
Income tax
provision -- --
53,900
--
Net income/(loss) $669,100
$(787,600) $827,800
$(4,996,300)
Net (loss)/income
per share $0.06
$(0.07) $0.08
$(0.46)
Weighted average
shares
outstanding 10,861,005 10,861,005
10,861,005
10,861,005
SOURCE Today's Man, Inc./CONTACT: Michael Kempner,
mkempnermww.com, or Carreen Winters, cwintersmww.com, both of MWW
Strategic Communications, 201-507- 9500, for Today's Man/
Avatex Announces First Quarter Results
DALLAS, TX - Aug. 13, 1997 - Avatex Corporation (NYSE: AAV)
today announced financial results for the first quarter of fiscal
1998 ended June 30, 1997.
Avatex reported revenues for the first quarter of $3.2 million
compared to revenues of $3.7 million for the same period last
year. The decrease is due primarily to a reduction in the number
of real estate partnerships the Company operated compared to the
previous year. The Company reported an operating loss of $33.5
million for the quarter, compared with an operating loss of $0.9
million a year ago. Included in the current year operating loss
is a one-time charge of $33.3 million incurred in connection with
the settlement reached with the Trustee of the Company's bankrupt
subsidiary FoxMeyer Corporation
(as previously announced). The Company reported a net loss from
continuing operations of $36.9 million, compared with a net loss
from continuing operations of $31.6 million for the same period
last year. Included in the current year loss is a $5.2 million
unfavorable adjustment to the carrying value of the Company's
investment in Urohealth Systems, Inc. common stock and warrants
as well as the one-time charge discussed above. Included in the
loss from continuing operations for the prior year is a $29.8
million charge as a result of an increase in the Company's
deferred tax asset valuation allowance.
After discontinued operations and preferred stock dividends,
the Company recorded a net loss to common stockholders of $43.1
million, or $3.12 per share, compared with a net loss to common
shareholders of $292.4 million, or $17.27 per share, for the same
period last year. Discontinued operations for the prior year
primarily represent the operations of FoxMeyer Corporation.
AVATEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands of dollars)
June 30, 1997 March 31, 1997
ASSETS
Current Assets
Cash and short-term
investments $4,283 $7,173
Restricted cash and
investments 33,567 33,115
Receivables-net 3,113 3,059
Other current assets 10,320 15,293
Total current assets 51,283 58,640
Investment in National Steel
Corporation 44,989 44,961
Investment in affiliates 28,383 28,711
Property and equipment 27,947 19,414
Less accumulated depreciation
and amortization 1,172 1,024
Net property and equipment 26,775 18,390
Miscellaneous assets 8,028 7,735
Total assets $ 159,458 $ 158,437
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable $ 1,045 $ 1,501
Other accrued liabilities 32,700 7,752
Long-term debt due within
one year 5,374 2,969
Total current liabilities 39,119 12,222
Long-term debt 32,589 27,482
Other long-term liabilities 43,779 35,985
Minority interest in consolidated
subsidiaries 7,153 6,853
Redeemable preferred stock 195,567 189,402
Stockholders' equity (deficit)
Common stock 69,032 69,030
Capital in excess of
par value 119,100 119,092
Minimum pension liability (75,663) (73,531)
Retained deficit (271,218) (228,098)
Total stockholders' deficit (158,749) (113,507)
Total liabilities and
stockholders' deficit $159,458 $158,437
AVATEX CORPORATION AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
For the three months
ended June 30,
1997 1996
Revenues $3,163 $3,705
Operating costs:
Operating costs, including general
and administrative costs 3,141 4,182
Depreciation and amortization 202 426
Unusual item 33,292 --
Operating loss (33,472) (903)
Other income (expense), net (4,980) 840
Financing costs
Interest income 593 360
Interest expense 1,362 2,117
Financing costs, net 769 1,757
Loss from continuing operations
before National Steel Corporation,
equity in income (loss) of
affiliates, income tax
provision and minority
interest (39,221) (1,820)
National Steel Corporation
net preferred dividend income 2,258 2,419
Equity in income (loss)
of affiliates 318 (1,603)
Loss from continuing operations
before income tax provision
and minority interest (36,645) (1,004)
Income tax provision -- 29,838
Loss from continuing operations
before minority interest (36,645) (30,842)
Minority interest in results
of operations of consolidated
subsidiaries 301 785
Net loss from continuing
operations (36,946) (31,627)
Discontinued operations:
Loss from discontinued
operations, net of tax -- (18,043)
Loss on disposal of
discontinued operations,
net of tax -- (238,682)
Net loss (36,946) (288,352)
Preferred stock dividends 6,175 4,080
Loss applicable to common
stockholders $ (43,121) $(292,432)
Per share of common stock:
Loss from continuing
operations $(3.12) $(2.11)
Discontinued operations -- (15.16)
Loss per share $(3.12) $(17.27)
Average number of common shares
outstanding 13,806 16,929
SOURCE Avatex Corporation /CONTACT: Edward Massman, Chief
Financial Officer of Avatex Corporation, 214-365-7450/
Interline Resources Corp. Announces
Termination of AMEX Listing
ALPINE, Utah--Aug. 13, 1997--Interline
Resources Corp. (AMEX:IRC.EC) announced that the American
Stock Exchange (AMEX) has made a final determination to delist
Interline from the AMEX's Emerging Company Marketplace.
After a careful review of this matter and after discussions
with the AMEX, Interline has determined that it will not appeal
the AMEX's decision.
Interline will immediately seek to have a market develop for
its common stock in the over-the-counter market with price
quotations published on the NASD Electronic Bulletin Board and/or
the National Quotation Bureau's Pink Sheets.
The AMEX halted trading in Interline's common stock as a
result of Interline's July 30, 1997 news release. The July 30
news release announced the filing of a petition for involuntary
bankruptcy against Interline by two companies with which
Interline is engaged in commercial litigation and arbitration
proceedings.
The July 30 news release also announced the filing of a
lawsuit against Interline by one of the two companies filing the
petition for involuntary bankruptcy. The AMEX has informed
Interline that the trading halt on the AMEX, which was initiated
on July 31, 1997, will not be lifted.
Interline has filed a motion to dismiss the petition for
involuntary bankruptcy with the U.S. Bankruptcy Court.
CONTACT: Interline Resources Corp., Alpine Mark Fredrickson,
801/756-3031 FAX: 801/756-8843 E-mail:
ircinfo@interlineresources.com
Phar-Mor, Inc. Reports Fourth Quarter
Net Income Vs. Prior Year Loss
YOUNGSTOWN, Ohio, Aug. 13 , 1997 -
today announced the results for its fourth quarter of fiscal
1997, the thirteen weeks ended June 28, 1997. The Company
reported net income of $413,000 or $0.03 per share for the
quarter compared to a net loss of $2,684,000 or $0.22 per share
for the comparable thirteen weeks ended June 29, 1996. Expenses
of $3,076,000 associated with the proposed business combination
with ShopKo Stores caused the Company to record a net loss of
$2,281,000 or $0.19 per share for the fifty-two weeks ended June
28, 1997 compared to a pro forma net income of $3,330,000 or
$0.27 per share for the comparable period last year. The results
for the fifty-two weeks ended June 29, 1996 include certain
favorable non-recurring items which relate to the negotiated
reduction of professional fees incurred while the Company was in
Chapter 11 and interest income received on federal income tax
refunds which together increase net income $2,804,000 or $0.23
per share.
Income from operations before interest and taxes was
$3,321,000 for the thirteen weeks ended June 28, 1997 compared to
a loss of $1,235,000 for the comparable thirteen weeks of the
prior year, an increase of $4,556,000. The increase in incomefrom
operations before interest and taxes was favorably impacted by
reductions in inventory shrinkage, lower promotional expenses and
increases in product gross margins partially offset by increases
in selling, general and administrative expenses. Income from
operations before the business combination expenses, professional
fees, interest and taxes for the fifty-two weeks ended June 28,
1997 was $12,533,000 compared to pro forma income from operations
before the business combination expenses, professional fees,
interest and taxesof $13,327,000 for the comparable fifty-two
weeks of the prior year.
Total sales for the thirteen weeks ended June 28, 1997 were
$255,301,000 compared to $264,798,000 for the comparable thirteen
weeks of the prior year, a decrease of 3.6%. Comparable store
sales for the fourth quarter of fiscal 1997 decreased 4.2% to
$253,551,000 from $264,798,000 for the same period in the prior
year. Sales during the quarter were negatively impacted by one
less week of the Easter selling season in the fourth quarter,
unseasonably cool and wet weather, a reduced level of promotional
activity and the discontinuance of certain promotional discounts.
Total sales for the fifty-two weeks ended June 28, 1997 were
$1,074,828,000 compared to $1,056,252,000 for the comparable
fifty- two weeks of the prior year, an increase of 1.8%.
Comparable store sales for the fifty-two weeks ended June 28,
1997 increased 1.3% to $1,070,252,000 from $1,056,252,000 from
the prior year.
The store remodeling and remerchandising efforts are proving
successful. Sales improved significantly in the five stores that
were remodeled during fiscal 1997 with sales increasing 20.6% in
the 13 weeks ended June 28, 1997 over the comparable period in
fiscal 1996.
"We continue to be encouraged by the success of our newly
remodeled stores and plan to incorporate our "Warehouse
District" format in future remodels and new stores wherever
possible" commented Chairman and CEO, Robert Haft. He added,
"We plan to open two new stores and remodel 13 stores during
the next year to include this format." The "Warehouse
District" format expands the existing grocery offering and
adds frozen and refrigerated food.
On July 9, 1997 the Company opened its 104th store in
Moorestown, NJ, a suburb of Philadelphia, PA. This is the
Company's fourth store in the Philadelphia market. Phar-Mor is a
retail drug store chain with 104 stores in 19 states. The
Company's common stock is traded on the Nasdaq National Market
under the symbol "PMOR."
PHAR-MOR,
INC.
UNAUDITED CONSOLIDATED SUMMARY
OF SALES AND EARNINGS
(In thousands, except per
share amounts)
Su
cc
es
so
r
Co
mp
an
y
Fift
y-tw
o
Week
s
Ende
d
PRO FORMA: (a)
June 28, 1997
June 29,
1996
Sales $1,074,828
$1,056,252 (Loss) income before
income tax expense $(2,281)
$6,006
Income tax expense --
2,676 Net (loss) income
$(2,281) $3,330
(Loss) earnings per share $(0.19)
$0.27
S
u
c
c
e
s
s
o
r
C
o
m
p
a
n
y
Thi
rte
en
Wee
ks
End
ed
AS REPORTED: June 28, 1997
June 29, 1996 Sales
$255,301
$264,798 Income (loss) before
income taxes $413
$(4,017)
Income tax benefit --
(1,333) Net income (loss)
$413 $(2,684)
Earnings (loss) per share $0.03
$(0.22)
Successo
r
Company
Predecessor Company
Fifty-two
Forty-three
Nine
Weeks Ended
Weeks Ended
Weeks Ended
June 28, 1997
June 29, 1996
Sept. 2, 1995
Sales $1,074,828
$874,284
$181,968
(Loss) income before
reorganization items,
fresh-start revaluation,
extraordinary item and
income taxes $(2,281)
$4,668
($1,634)
Reorganization items
-- -- (16,798)(b)
Fresh-start revaluation
-- -- 8,043
Extraordinary item - gain
on debt discharge
-- -- 775,073
(Loss) income before
income taxes (2,281)
4,668
764,684
Income tax expense --
2,142
--
Net (loss) income $(2,281)
$2,526
$764,684
(Loss) Earnings per share $(0.19)
$0.21
N/M
NOTES:
(a) The Company emerged from protection under Chapter 11 of
the United States Bankruptcy Code on September 11, 1995 (the
"Effective Date"). Consequently, the Company has
applied the reorganization and fresh-start reporting adjustments
to the balance sheet as of September 2, 1995, the closest fiscal
month end to the Effective Date.
The pro forma information includes all retroactive adjustments
for fresh start accounting, elimination of non-recurring
reorganization items and adjusting interest expense to give
effect to the new debt of the reorganized Company.
(b) Reorganization items include charges for Chapter 11
professional fees, the Debtor-In-Possession financing facility
fees and costs of downsizing net of credits for interest income,
amortization of prepetition vendor exclusivity income and an
insurance claim recovery.
N/M - not meaningful.
EARNINGS PER SHARE for the Successor Company have been
computed based on 12,158,515 and 12,157,419 weighted average
shares outstanding for the thirteen and fifty-two weeks ended
June 28, 1997, respectively and 12,157,046 and 12,156,614
weighted average shares outstanding for the thirteen and forty-
three weeks ended June 29, 1996, respectively. No earnings per
share have been presented for the Predecessor Company because
such presentation would not be meaningful.
SOURCE Phar-Mor, Inc. /CONTACT: Gary Holmes of Robinson Lerer
& Montgomery, 212-484-7736, for Phar-Mor/
The Wet Seal, Inc. Announces Acceptance of Offer By
IRVINE, Calif., Aug. 13, 1997 - Young women's apparel retailer
The Wet Seal, Inc. (Nasdaq: WTSLA) announced today that it's
offer has been accepted by Rampage Retailing Inc. which is in
Chapter 11 proceedings in California.
The offer includes the acquisition of 17 stores and 1
leasehold interest. The offer is subject to the successful
execution of a definitive agreement and approval by the
Bankruptcy Court. These stores, primarily located in triple A
malls in a number of states, aggregate approximately 120,000
square feet. If the transaction is completed, The Wet Seal, Inc.
intends to operate the stores under the Rampage name and carry
up-scale junior merchandise which may include certain Rampage
labeled apparel as well as other private label apparel to be
designed by The Wet Seal, Inc.
The Wet Seal, Inc., a specialty retailer of moderately priced
fashionable apparel for young women, is headquartered in Irvine,
California. The Company currently operates 368 stores in 34
states and Puerto Rico.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: All forward-looking statements made by the
Company involve material risks and uncertainties and are subject
to change based on factors beyond the Company's control.
Accordingly, the Company's future performance and financial
results may differ materially from those expressed or implied in
any such forward- looking statements. Such factors include, but
are not limited to, those described in the Company's filings with
the Securities and Exchange Commission. The Company does not
undertake to publicly update or revise its forward-looking
statements even if experience or future changes make it clear
that any projected results expressed or implied therein will not
be realized.
SOURCE The Wet Seal, Inc. /CONTACT: Ed Thomas, President,
714-699-3902 or Ann Cadier- Kim, Chief Financial Officer,
714-699-3922, both of The Wet Seal, Inc./
Questor Partners Fund to Acquire Schwinn
Cycling & Fitness Inc.
SOUTHFIELD, Mich., Aug. 13, 1997 - Questor Partners Fund,
L.P., announced today that it will acquire Schwinn Cycling and
Fitness Inc. under an agreement with Scott Sports Group Inc.
Terms of the transaction were not disclosed.
Schwinn is a leading designer, manufacturer, marketer and
distributor of recreational products for the cycling and fitness
industries. The company sells its products on a worldwide basis,
with particular emphasis on the U.S. and Europe. Schwinn's
products are distributed domestically through more than 1,800
independent bicycle dealers, with fitness products also sold
through specialty retail chains and health clubs.
The business will continue to operate under the Schwinn name
and will maintain its headquarters in Boulder, Colo. Schwinn has
a rich heritage as one the leading bicycle brands in the U.S.,
since 1895. The company lost significant market share in the
1980s, when it failed to adjust properly to the growing
popularity of mountain bikes. This inaction, coupled with an
influx of new competitors, forced the company into a Chapter 11,
bankruptcy filing in 1992. Since Scott's purchase of the company
in 1993, Schwinn has improved significantly and returned to
profitability.
"Schwinn's dealers and customers have remained remarkably
loyal through the years," Jay Alix, Questor's managing
principal, said. "We are excited about the opportunity to
lead Schwinn to the next plateau in its turnaround program by
focusing on operational improvements and profitability. We
believe that the marriage of Questor's strategic and financial
resources with the dedicated and talented Schwinn management team
will make Schwinn an even more formidable competitor in
recreational products."
Scott Sports Group is privately owned by the Zell/Chilmark
Fund and Scott Partners. Chuck Ferries, chairman of Scott, said:
"Questor is the perfect financial partner for Schwinn. We
will work closely with Questor to make sure there is a smooth
transition for both the Schwinn and Scott brands."
"The acquisition of Schwinn is an excellent opportunity
for Questor," said Dan Lufkin, the co-founder of Donaldson,
Lufkin & Jenrette and a principal of Questor. "The
Schwinn brand is one of the most highly recognized in the world.
Its cycling and fitness products are of the highest quality and
are on the cutting edge of innovation. Under the direction of its
excellent management team, the company has experienced
significant market share growth over the past few years and is
well positioned to continue its role as an industry leader."
"Once again Schwinn has become an independent
company," said Skip Hess, head of cycling products for
Schwinn. "With Questor's strategic direction, we will now
focus on growing our bicycle and parts and accessories business
both domestically and internationally through a growing number of
quality Schwinn dealers."
"Fitness products have become a significant part of
Schwinn's business," said Kevin Lamar, head of fitness
products for the company. "With Questor's financial backing,
we plan to greatly expand our fitness products offerings."
Questor Management Company, headquartered in Southfield,
manages Questor Partners Fund, which was established in 1995 to
acquire "special situation" companies, including the
non-core divisions or subsidiaries of Fortune 1000 corporations.
The fund's portfolio currently includes Ryder TRS, Inc., Denver,
Colo.; Tube Products Corporation, Vandalia, Ohio, and a
substantial interest in Ockham Personal Insurance Holdings PLC,
London, England.
Principals of Questor, in addition to Alix and Lufkin, are
private investors Melvyn N. Klein, an investor and former senior
executive at Donaldson, Lufkin & Jenrette; and Edward L.
Scarff, former president of Transamerica Corporation.
SOURCE Questor Partners Fund, L.P. /CONTACT: Kevin Keenley of
Questor Partners, 248-213-2200; or Harry Savage of Robert Marston
and Associates, 212-371-2200/
L. Luria & Son, Inc. Announces Court
Filing
MIAMI, FL - Aug. 13, 1997 - L.
Luria & Son, Inc. (NYSE: LUR) (Luria's) announced today
that it has filed a case under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of Florida.
Rachmil Lekach, Chief Executive Officer, said, "The
decision to file was a very difficult one. The members of the new
management team that have joined the Company since August 1996,
at which time a change in control of the Company occurred, have
not been able to reverse the losses and declining sales trends
experienced by the Company prior to such time. Although the new
management team has taken many of the steps set forth in a
recovery plan previously announced, the Company has continued to
experience difficulty meeting its debts as they become due. The
filing was precipitated by the Company's continuing sales
decline, reduced borrowing capacity and deterioration of vendor
support, which has made the process of implementing the recovery
plan increasingly difficult. It was determined that in the
overall interests of Luria's customers, vendors, employees and
shareholders, this action was required. As the case goes forward,
Luria's will continue to evaluate and take actions that serve the
best interests of all parties."
The Company believes that the filing should allow Luria's to
(i) relieve the Company of burdensome obligations under
unfavorable store leases, (ii) realize significant value in other
below market long-term store leases, and (iii) maximize the
ultimate return to its creditors.
SOURCE L. Luria & Son, Inc. /CONTACT: Paul Steven
Singerman, Esq. of Berger Davis & Singerman, 305-755-9500,
for L. Luria & Son/