LEE'S SUMMIT, Mo., Jan. 10 /PRNewswire/ -- Payless Cashways, Inc.
(OTC Bulletin Board: PCSH), a full line building materials and finishing
products company focusing on the professional builder, remodel and repair
contractor, institutional buyer, and project oriented consumer, today reported
operating results for the fourth quarter and fiscal year ended November 25,
2000.
Summary of Financial Highlights
(Pro Forma excluding Special Charges)
(amounts in thousands except percentages and per share amounts)
Fourth Quarter Ended Fiscal Year Ended
Nov. 25, Nov. 27, Change Nov. 25, Nov. 27, Change
2000 1999 2000 1999
Net Sales $332,125 $434,604 -24% $1,492,783 $ 1,811,365 -18%
Gross Margin $91,788 $116,005 -21% $406,056 $481,247 -16%
SG&A $72,541 $97,130 -25% $340,474 $420,382 -19%
EBITDA $19,573 $19,270 +2% $67,646 $62,847 +8%
Income/(Loss)
Before Taxes $1,960 $240 +717% $(3,973) $(9,943) +60%
Net Income/
(Loss) $1,003 $141 +611% $(652) $(5,837) +89%
Net Income/
(Loss) Per
Common Share $.05 $.01 +611% $(.03) $(.29) +89%
Wtd. Avg. Shares
Outstanding 20,000 20,000 -- 20,000 20,000 --
KEY DEVELOPMENTS - FOURTH QUARTER & FISCAL 2000
* 10th consecutive quarter of EBITDA improvement.
* Quarterly EBITDA ratio of 5.9% highest achieved in last 16 quarters.
* Full Year EBITDA ratio improvement of 100 basis points.
* Second consecutive year of gross margin rate improvement.
* Lowest annual SG&A rate since 1994.
* Pro forma net loss of $0.7 million best performance since 1994.
"Fiscal 2000 was a year of continued improvement for our Company. We made
tremendous progress in the complex process of reengineering our business
model and our profit model. At the same time, in a very difficult
operating environment where we experienced a dramatic fall in commodity
prices, rising interest costs, and the negative sales impact of
transitioning from a mass advertising format to a targeted marketing
approach, our bottom line results continued to improve over the prior
year."
--President & CEO Millard Barron
Fourth Quarter 2000 Results
The Company reported fourth quarter pro forma net income of $1.0 million
compared to $0.1 million in the fourth quarter of the previous year, excluding
2000 and 1999 non-routine and special charges discussed below. Net loss after
non-routine and special charges was $18.9 million for the fourth quarter of
2000 compared to a loss of $2.7 million in 1999. Pro forma earnings per share
for the fourth quarter of 2000 was $.05 compared to $.01 in the fourth quarter
of 1999. Loss per common share after non-routine and special charges in the
fourth quarter of 2000 was $0.94 compared to a loss per common share of $0.14
in the same quarter of 1999.
Pro forma earnings before interest, taxes, depreciation, and amortization
(EBITDA), were $19.6 million or 5.9% of sales for the 2000 fourth quarter,
compared to $19.3 million or 4.4% of sales for the same period last year.
Fourth quarter 2000 Pro-forma EBITDA benefited from a $1.1 million reversal of
items expensed in earlier quarters and reflected as special charges in the
fourth quarter and a $0.2 million LIFO credit. Comparatively, fourth quarter
1999 Pro-forma EBITDA benefited from a $1.6 million LIFO credit.
Net sales for the fourth quarter of 2000 were $332.1 million, a 24.5%
same-store decrease and a 23.6% decrease in total, versus fourth quarter of
1999 sales of $434.6 million. On a same-store sales basis, sales to the
professional customer decreased 19.0%, and sales to the DIY customer decreased
31.4% for the quarter. Same store sales were negatively impacted by
significant deflation in lumber and wallboard prices, reductions in
advertising activity and an increase in new competition.
The Company is in the process of closing 22 existing retail locations.
Accordingly, in the fourth quarter, the Company recorded a special charge of
$20.4 million for severance, fixed asset impairment and disposal costs and
lease commitments, and a non-routine $11.8 million gross margin charge for
inventory liquidation at these stores. Last year, the Company also recorded a
special charge in the fourth quarter of $1.1 million and a non-routine
$0.5 million gross margin charge related to inventory liquidation at a store
it closed.
Fiscal 2000 Operating Results
For fiscal 2000, the Company reported a pro forma net loss of
$0.7 million, or $0.03 per share, compared to a pro forma net loss of
$5.8 million, or $0.29 per share, for fiscal 1999, excluding non-routine and
special charges and credits affecting both periods. Net loss for fiscal 2000
after non-routine and special charges was $20.6 million, or $1.03 per share,
versus a net loss of $8.1 million, or $0.41 per share, for fiscal 1999. The
net loss for 2000 includes fourth quarter special and non-routine charges
associated with the closing of 22 retail locations as detailed above. The net
loss for fiscal 1999 includes non-routine and special charges for store
closing and administrative staff elimination costs recorded in the second and
fourth quarters, accelerated depreciation charges recorded in the third and
fourth quarters, a pension benefit curtailment gain recorded in the second
quarter, and an extraordinary charge related to the early extinguishment of
debt recorded in the fourth quarter.
Net sales in fiscal year 2000 were $1.5 billion, a decrease of 15.1% on a
same-store sales basis and 17.6% in total, compared with last year's sales of
$1.8 billion. On a same-store sales basis, sales to the professional customer
declined 9.9% and sales to the DIY customer decreased 21.2%, largely due to
significant deflation in commodity prices, reductions in advertising activity
and new competition.
Pro forma EBITDA for fiscal year 2000 was $67.6 million, compared to
$62.8 million during fiscal year 1999. EBITDA for fiscal 2000 benefited from a
$0.2 million LIFO credit compared to a $0.9 million LIFO credit in fiscal
1999.
Payless Cashways Management Comments
Payless Cashways President & CEO Millard Barron commented, "Fiscal 2000
was a year of continued improvement for our Company. We made tremendous
progress in the complex process of reengineering our business model and our
profit model. At the same time, in a very difficult operating environment
where we experienced a dramatic fall in commodity prices, rising interest
costs, and the negative sales impact of transitioning from a mass advertising
format to a targeted marketing approach, our bottom line results continued to
improve over the prior year. 2000 was our second consecutive year with an
increase in gross margin after eight years of decline, and our SG&A expense
rate was the best performance since 1994."
Mr. Barron continued, "We continue to strengthen our team and our culture,
while we improve overall efficiencies and make the hard decisions necessary to
eliminate under-producing assets. We have enhanced existing businesses as
well as developed new ones, invested in technology for improvements today and
in the future, and reorganized key resources around our mission statement and
target customers. Our pro-forma bottom line performance is the best since
1994, a result of the continuing support of our customers, associates,
vendors, lenders and shareholders. I look forward to 2001 with confidence and
optimism."
About the Company
Payless Cashways, Inc. is a full-line building materials and finishing
products company focusing on the professional builder, remodel and repair
contractor, institutional buyer, and project-oriented consumer. The Company
operates 128 retail stores and 5 Builders Resource facilities in 17 states
located in the Midwestern, Southwestern, Pacific Coast and Rocky Mountain
areas. The Company also operates 12 distribution and manufacturing facilities
in 7 states. The stores operate under the names Payless Cashways, Furrow,
Lumberjack, Hugh M. Woods, Knox Lumber and Contractor Supply.
Forward-Looking Statements
This paragraph is included in this release to comply with the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. There are
certain important factors that could cause results to differ materially from
those anticipated by the forward-looking statements made above. Investors are
cautioned that all forward-looking statements involve risk and uncertainty.
Among the factors that could cause results to differ materially are the
following: competitor activities; stability of customer demand; weather;
stability of the work force; supplier and lender support; consumer spending;
interest rates; new and existing housing activity; commodity
prices-specifically lumber and wallboard; customer and product mix; growth of
certain market segments; an excess of retail space devoted to the sale of
building materials and the success of the Company's strategy. Additional
information concerning these and other factors is contained in the Company's
SEC filings, which are available by contacting the Company or on the Company's
web site, payless.cashways.com .
PAYLESS CASHWAYS, INC.
Fourth Quarter Ended and Year Ended November 25, 2000 Pro Forma Operating
Data (Unaudited) (a) (b)
(In thousands, except percentages and per share amounts)
Thirteen Weeks Ended
November 25, 2000 November 27, 1999
Amount Percent Amount Percent
Net sales $332,125 100.0 %$434,604 100.0%
Cost of merchandise sold 240,337 72.4 318,599 73.3
Gross margin 91,788 27.6 116,005 26.7
Selling, general and
administrative 72,541 21.8 97,130 22.4
Provision for depreciation
and amortization 7,389 2.2 9,424 2.2
Other income (326) (.1) (395) (.1)
Operating Income 12,184 3.7 9,846 2.2
Interest expense 10,224 3.1 9,606 2.2
Income before income taxes 1,960 0.6 240 --
Federal and state income
taxes 957 0.3 99 --
NET INCOME $1,003 0.3% $141 --%
Net income per common
share-basic $0.05 $0.01
Weighted average common
shares outstanding 20,000 20,000
Fifty-Two Weeks Ended
November 25, 2000 November 27, 1999
Amount Percent Amount Percent
Net sales $1,492,783 100.0% $1,811,365 100.0%
Cost of merchandise
sold 1,086,727 72.8 1,330,118 73.4
Gross margin 406,056 27.2 481,247 26.6
Selling, general and
administrative 340,474 22.8 420,382 23.2
Provision for depreciation
and amortization 30,067 2.0 37,027 2.0
Other income (2,064) (.1) (1,982) (.1)
Operating Income 37,579 2.5 25,820 1.5
Interest expense 41,552 2.8 35,763 2.0
Loss before income taxes (3,973) (.3) (9,943) (.5)
Federal and state income
taxes (3,321) (.2) (4,106) (.2)
NET LOSS $(652) (.1)% $(5,837) (.3)%
Net loss per common
share-basic $(0.03) $(0.29)
Weighted average common
shares outstanding 20,000 20,000
(a) The pro forma operating data for fiscal 2000 excludes a fourth quarter
special charge for store closings and associated costs of
$20.4 million. It also excludes a non-routine fourth quarter margin
charge for inventory liquidation at these closing stores of
$11.8 million.
(b) The pro forma operating data for fiscal 1999 excludes $2.0 million and
$1.1 million for fourth and third quarter depreciation charges,
respectively, related to the accelerated depreciation of certain
leasehold improvements and assets related to closed stores.
Additionally, it excludes a fourth and second quarter special charge
for store closings and costs associated with the elimination of
administrative staff of $1.1 million and $5.2 million, respectively.
It also excludes a fourth and second quarter margin charge for
inventory liquidation at these closing stores of $.5 million and
$3.4 million, respectively. A second quarter special credit of
$10.6 million, which represents a pension benefit curtailment gain
recorded as a result of freezing benefits under the Company's pension
plan, is excluded from the 1999 pro forma operating data. A fourth
quarter $.7 million extraordinary item representing losses on early
extinguishment of debt is also excluded from the 1999 pro forma
operating data.
PAYLESS CASHWAYS, INC.
Fourth Quarter and Year Ended November 25, 2000 Operating Data (Unaudited)
(In thousands, except percentages and per share amounts)
Thirteen Weeks Ended
November 25, 2000 November 27, 1999
Amount Percent Amount Percent
Net sales $332,125 100.0% $434,604 100.0%
Cost of merchandise
sold 252,137 75.9 319,099 73.4
Gross margin 79,988 24.1 115,505 26.6
Selling, general and
administrative 72,541 21.8 97,130 22.4
Provision for
depreciation and
amortization 7,389 2.2 11,445 2.6
Special charges 20,400 6.2 1,085 .2
Other income (326) (.1) (395) (.1)
Operating Income (20,016) (6.0) 6,240 1.5
Interest expense 10,224 3.1 9,606 2.2
Loss before income
taxes (30,240) (9.1) (3,366) (.7)
Federal and state
income taxes (11,344) (3.4) (1,390) (.3)
Loss before
extraordinary items (18,896) (5.7) (1,976) (.4)
Extraordinary items -- -- 729 .2
NET LOSS $(18,896) (5.7)% $(2,705) (.6)%
Net income per common
share-basic $(0.94) $(0.14)
Weighted average
common shares
outstanding 20,000 20,000
Fifty-Two Weeks Ended
November 25, 2000 November 27, 1999
Amount Percent Amount Percent
Net sales $1,492,783 100.0% $1,811,365 100.0%
Cost of merchandise
sold 1,098,527 73.6 1,333,968 73.6
Gross margin 394,256 26.4 477,397 26.4
Selling, general
and administrative 340,474 22.8 420,382 23.2
Provision for
depreciation and
amortization 30,067 2.0 40,167 2.2
Special charges
(credits), net 20,400 1.3 (4,315) (.2)
Other income (2,064) (.1) (1,982) (.1)
Operating Income 5,379 .4 23,145 1.3
Interest expense 41,552 2.8 35,763 2.0
Loss before income
taxes (36,173) (2.4) (12,618) (.7)
Federal and state
income taxes (15,622) (1.0) (5,211) (.3)
Loss before
extraordinary items (20,551) (1.4) (7,407) (.4)
Extraordinary items -- -- 729 --
NET LOSS $(20,551) (1.4)% $(8,136) (.4)%
Net loss per common
share-basic $(1.03) $(.41)
Weighted average
common shares
outstanding 20,000 20,000
PAYLESS CASHWAYS, INC.
Condensed Balance Sheets (Unaudited) (a)
(In thousands)
November 25, November 27,
2000 1999
ASSETS
CURRENT ASSETS
Cash and cash equivalents $1,485 $1,111
Merchandise inventories 311,489 349,332
Prepaid expenses and other current assets 19,246 22,013
Income taxes receivable -- 679
TOTAL CURRENT ASSETS 332,220 373,135
OTHER ASSETS
Real estate held for sale 3,785 8,851
Deferred financing costs 3,051 3,944
Other 3,090 1,549
LAND, BUILDINGS, EQUIPMENT & SOFTWARE, NET 335,512 340,912
$677,658 $728,391
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $10,181 $3,265
Trade accounts payable 38,633 51,480
Other current liabilities 76,537 73,880
Income taxes payable 927 1,851
Deferred income taxes 5,510 2,157
TOTAL CURRENT LIABILITIES 131,788 132,633
LONG-TERM DEBT, less portion classified
as current liability 363,432 374,154
NON-CURRENT LIABILITIES 49,692 68,307
SHAREHOLDERS' EQUITY
Common stock 200 200
Additional paid-in capital 183,600 183,600
Accumulated deficit (51,054) (30,503)
TOTAL SHAREHOLDERS' EQUITY (b) 132,746 153,297
$677,658 $728,391
(a) Certain reclassifications have been made to the 1999 financial
statements to conform to the 2000 presentation.
(b) The covenant included in the 1999 Credit agreement with Congress
Financial regarding minimum "adjusted net worth" excludes the effects
of certain non-cash charges and credits. The cumulative amount of such
non-cash charges at November 25, 2000 was $11.6 million.
SOURCE Payless Cashways, Inc.
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Related links:
http://www.payless.cashways.com
CONTACT:
Richard B. Witaszak, Sr. V.P.-Finance and CFO
of Payless Cashways, Inc., 816-347-6974, email,
webinvestor@payless.cashways.com
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