NAPERVILLE, Ill., June 11 /PRNewswire/ -- Factory Card Outlet Corp.
(Nasdaq: FCPYQ) announced today results for its fiscal quarter ended May 1,
1999.
Net loss for the fiscal quarter was $16.1 million or ($2.14) per fully
diluted share compared to net income of $0.6 million or $0.07 per fully
diluted share for the fiscal quarter ended May 2, 1998. The Company's net
loss for the latest fiscal quarter included $12.5 million or ($1.67) per fully
diluted share for 27 store closings, professional fees and other costs related
to the reorganization of the company and $1.3 million or ($0.17) per fully
diluted share for the early retirement of amounts outstanding under the
Company's prior credit agreement.
Sales for the fiscal quarter ended May 1, 1999 rose approximately 5.4% to
$52.5 million from $49.9 million for the fiscal quarter ended May 2, 1998. On
a comparable store basis, sales for the fiscal quarter decreased 2.6%.
Comparable store sales were adversely impacted by the reduced flow of
merchandise resulting from issues associated with the Company's liquidity and
the Chapter 11 cases.
Factory Card Outlet is a chain of company owned superstores offering an
extensive selection of greeting cards, gift wrap, balloons, party supplies
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 and its operating subsidiary filed petitions for reorganization
under Chapter 11 of Title 11 of the United States Code and are operating as
debtors 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 the 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 filings with the Securities and Exchange
Commission.
On May 6, 1999, the Company announced that it received notification that
Nasdaq's staff has determined to delist the Company's common stock from the
Nasdaq National Market. Nasdaq said the determination was based on the
potential impact of the Company's pending Chapter 11 case on the Company's
shareholders. The Company has requested a delisting hearing before Nasdaq's
Listing Qualifications Panel. The hearing is scheduled for July 1, 1999. The
company's common stock will continue to be listed on the Nasdaq National
Market, although trading continues to be halted until the hearing process is
completed.
FACTORY CARD OUTLET CORP.
AND SUBSIDIARY
Consolidated Balance Sheets
(Dollar amounts in thousands)
May 1, Janauary 30,
1999 1999
(Unaudited)
ASSETS
Current assets:
Cash $1,282 $3,597
Inventories 52,066 61,658
Refundable income taxes 747 747
Prepaid expenses and other 1,439 980
Total current assets 55,534 66,982
Fixed assets, net 33,817 39,585
Other assets 1,151 1,004
Total assets $90,502 $107,571
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities not subject to compromise
Current liabilities:
Accounts payable $3,142 $33,089
Current maturities of long-term
obligations -- 2,160
Accrued expenses 5,302 8,755
Total current liabilities 8,444 44,004
Noncurrent liabilities:
Revolving credit note payable 19,414 20,653
Long-term obligations -- 1,670
Term loan, net of discount -- 9,670
Deferred rent liabilities 6,731 7,396
Total liabilities not subject
to compromise 34,589 83,393
Liabilities subject to compromise 47,809 --
Stockholders' equity 8,104 24,178
Total liabilities and
stockholders' equity $90,502 $107,571
FACTORY CARD OUTLET CORP.
AND SUBSIDIARY
Consolidated Statements of Operations
(Dollars in thousands, except for earnings per share and share data)
Three fiscal months ended
May 1, May 2,
1999 1998
(Unaudited)
Net sales $52,533 $49,862
Cost of sales 28,120 24,387
Gross profit 24,413 25,475
Selling, general and administrative
expenses 25,768 23,747
Interest expense 894 781
(Loss) income before reorganization items,
income taxes, and extraordinary item (2,249) 947
Reorganization items, net 12,547 --
(Loss) income before income taxes and
extraordinary item (14,796) 947
Income taxes -- 379
(Loss) income before extraordinary item (14,796) 568
Extraordinary item-loss on early
retirement of debt 1,292 --
Net (loss) income $(16,088) $568
(Loss) earnings per share--
Basic $(2.14) $0.08
Diluted $(2.14) $0.07
Weighted average shares outstanding--
Basic 7,503,098 7,354,386
Diluted 7,503,098 8,096,974
SOURCE Factory Card Outlet
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CONTACT:
Frederick G. Kraegel, Chief Financial Officer
of Factory Card Outlet, 630-579-2230
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