NAPERVILLE, Ill., April 30 /PRNewswire/ -- Factory Card Outlet Corp.
(Nasdaq: FCPYQ) announced today results for its fiscal year ended January 30,
1999.
Net loss for the 52-weeks ended January 30, 1999 was $28.4 million or
$3.82 per fully diluted share compared to net income of $2.2 million or
$0.28 per fully diluted share for the 53-weeks ended January 31, 1998. The
Company's results for the latest fiscal year include a provision of
$11.3 million or $1.52 per share (diluted) for merchandise which is to be
discontinued from the Company's ongoing assortment, as well as inventory with
excess quantities on hand and certain seasonal inventory remaining from past
holidays; and a charge of $3.6 million or $0.49 per share (diluted) for lease
termination costs related to executed leases for new stores which the Company
no longer plans to operate, employee severance and the write-off of new store
closing costs and additional depreciation expense resulting from the change in
the depreciable lives of certain technology equipment.
Sales for the 52-weeks ended January 30, 1999 rose approximately 30% to
$226.5 million from $174.5 million for the 53-weeks ended January 31, 1998.
On a comparable store basis, sales for the fiscal year rose 0.8%. Comparable
store sales were adversely impacted during the Spring of 1998 by an uneven
flow of merchandise resulting from the Company's conversion to a new
distribution facility and during the Fall of 1998 by lower seasonal sales
partially resulting from significant levels of carryover merchandise from
prior years.
Stewart M. Kasen, the Company's Chairman, President and Chief Executive
Officer, said, "We have taken several steps since the commencement of the
Company's chapter 11 case on March 23, 1999 to improve our financial and
operating position. These steps include our previously announced $50 million
debtor-in-possession financing facility and the closing of 27 stores beginning
in May 1999. We are focused on improving the performance of our continuing
stores and taking other actions necessary to enhance our goal of emerging from
chapter 11 as soon as practicable." The repayment of the previous credit
facilities with the debtor-in-possession financing will result in an
extraordinary charge of $1.3 million and the closing of the 27 stores will
result in a charge of approximately $7.0 million in the first quarter of
fiscal 1999. In addition, landlord claims arising from the rejection of
leases for these closed stores may aggregate, but not exceed, $5.0 million.
Under the Bankruptcy Code, these claims are subject to certain reductions for
mitigation or other offsets which may reduce these amounts substantially.
Factory Card Outlet is a chain of company owned stores offering a vast
assortment of party supplies, greeting cards, gift wrap and other special
occasion merchandise at everyday value prices.
Certain statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company, or industry results, to be
materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. On March 23, 1999,
the Company filed a petition for reorganization under chapter 11 of title 11
of the United States Code and is operating as a debtor in possession. All
forward-looking statements relating to aspects of any plan of reorganization
submitted in connection with the Chapter 11 cases are dependent upon, among
other things, further improvements in the Company's store-level operating
performance, the proposal of an acceptable reorganization plan and the
confirmation of such plan by the bankruptcy court.
In general, the results, performance or achievements of the Company and
its stores and the value of the Company's common stock are dependent upon a
number of factors including without limitation, the following: effects
resulting from the commencement and completion of Chapter 11 cases; ability to
meet sales plans; weather and economic conditions; dependence on key
personnel, competition; ability to anticipate merchandise trends and consumer
demand; ability to maintain relationships with suppliers; successful
implementation of information systems; successful handling of merchandise
logistics; inventory shrinkage; ability to meet future capital needs;
governmental regulations; ability to complete corrective action necessary to
address Year 2000 issues; the continued listing of the Company's common stock
on the Nasdaq National Market; and other factors both referenced and not
referenced in the Company's Annual Report on Form 10-K and the Company's other
filings with the Securities and Exchange Commission.
FACTORY CARD OUTLET CORP.
AND SUBSIDIARY
Consolidated Balance Sheets
(Dollars in thousands)
January 30, January 31,
1999 1998
ASSETS
Current assets:
Cash $3,597 $30
Receivables 763 796
Inventories 61,658 72,911
Other current assets 964 2,105
Total current assets 66,982 75,842
Fixed assets, net 39,585 38,507
Deferred income taxes - 493
Other assets 1,004 188
Total assets $107,571 $115,030
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $33,089 $19,037
Accrued expenses 8,755 4,754
Other current liabilities 2,161 1,821
Total current liabilities 44,005 25,612
Revolving credit note payable 20,653 29,700
Term loan 9,669 -
Deferred rent liabilities 7,396 5,316
Other long-term liabilities 1,670 2,668
Total liabilities 83,393 63,296
Total stockholders' equity 24,178 51,734
Total liabilities and
stockholders' equity $107,571 $115,030
FACTORY CARD OUTLET CORP.
AND SUBSIDIARY
Consolidated Statements of Income
(Dollars in thousands except for earnings per share and share data)
52-Weeks Ended 53-Weeks Ended
January 30, January 31,
1999 1998
(unaudited)
Net sales $226,499 $174,497
Cost of sales and occupancy 168,962 110,200
Gross profit 57,537 64,297
Selling, general and
administrative expenses 80,870 58,945
Income (loss) from
operations (23,333) 5,352
Interest expense 4,572 1,482
Income (loss) before taxes (27,905) 3,870
Income taxes (benefit) 451 1,652
Net income (loss) $(28,356) $2,218
Earnings (loss) per share
Basic $(3.82) $0.31
Diluted $(3.82) $0.28
Weighted average shares outstanding
Basic 7,422,069 7,261,542
Diluted 7,422,069 7,946,188
SOURCE Factory Card Outlet Corp.
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CONTACT:
Frederick G. Kraegel, Chief Financial Officer
of Factory Card Outlet Corp., 630-579-2230
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