LEE'S SUMMIT, Mo. Sept. 14 /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 third quarter ended August 26, 2000.
Summary of Financial Highlights
(amounts in thousands except percentages and per share amounts)
Third Quarter Ended
August 26, 2000 August 28, 1999
Net Sales $391,815 $492,160
Gross Margin $106,949 27.3% $129,943 26.4%
SG&A $84,732 21.6% $108,052 22.0%
EBITDA 22,620 5.8% $22,414 4.6%
Income Before
Income Taxes $4,409 1.1% $3,215 0.6%
Net Income $2,353 0.6% $1,713 0.3%
Net Income Per
Common Share $.12 $.09
Wtd. Avg. Shares
Outstanding 20,000 20,000
KEY DEVELOPMENTS -- THIRD QUARTER 2000
-- 9th consecutive quarter of EBITDA improvement.
-- 37% increase in net income versus 3Q99.
-- EBITDA ratio of 5.8% highest achieved in last 15 quarters.
-- SG&A expense reduced by 21.6% or $23.3 million vs. 3Q99.
-- Gross margin improvement of 90 basis points.
-- Stockholders' equity at $152 million, $7.58 per share book value.
"Our intense commitment to developing a sustainable profit model resulted
in improved gross margin, reduced SG&A expense, an increase in EBITDA, and
a significant improvement in net income."
President & CEO Millard Barron
Third Quarter 2000 Results
Earnings before interest, taxes, depreciation, and amortization (EBITDA),
increased to $22.6 million or 5.8% of sales for the 2000 third quarter,
compared to $22.4 million or 4.6% of sales for the same period last year.
The Company reported third quarter net income of $2.4 million, compared to
net income of $1.7 million in the third quarter of the previous year, an
improvement of 37%. Income per common share in the third quarter of 2000 was
$0.12 compared to $0.09 in the same quarter of 1999.
Net sales for the third quarter of 2000 were $391.8 million, an 18.6%
same-store decrease, and a 20.4% decrease in total versus third quarter of
1999 sales of $492.2 million. On a same-store sales basis, sales to the
professional customer decreased 14.3%, and sales to the DIY customer decreased
23.8% for the quarter. Same store sales were negatively impacted by
significant deflation in lumber and wallboard prices, reductions in
advertising activity and ongoing business restructuring, including eliminating
certain non-profitable customer relationships and products.
Year-to-date 2000 Results
The Company reported a 19.5% increase in earnings before interest, taxes,
depreciation, and amortization (EBITDA), to $48.1 million, or 4.1% of sales,
for the first three quarters of 2000, compared to $40.2 million or 2.9% of
sales, for the same period last year.
The net loss for the first three quarters of fiscal 2000 was $1.7 million,
an improvement of 69.5% compared to the net loss of $5.4 million for the first
three quarters of 1999. The loss per common share for the first nine months
of 2000 was $0.08 compared to $0.27 for the same period of 1999.
Sales for the first nine months of 2000 were $1,160.7 million, a 13.4%
decline on a same-store basis and a 15.7% decrease in total, compared with the
same period last year's sales of $1,376.8 million. On a same-store sales
basis, sales to the professional customer decreased 8.6%, and sales to the DIY
customer decreased 19.1% year-to-date.
Payless Cashways Management Comments
Payless Cashways Inc. President & CEO Millard Barron commented, "Our 3rd
quarter results reflect our many positive turnaround initiatives as well as
the negative effects of sector slowing dynamics. We continued to adjust and
fine tune our business model, including our assortments, services and
marketing programs aimed at our target customer groups. These changes,
combined with a significant drop in commodity prices resulted in a negative
sales performance compared to last year. However, our intense commitment to
developing a sustainable profit model resulted in improved gross margin rates,
reductions in SG&A expenditures, increased EBITDA and a significant
improvement in net income. I believe these fundamental improvements combined
with our many sales initiatives and a solid focus on building stronger
relationships with our target customers are key steps forward in our journey
towards a successful future for our Company."
Barron continued, "I am very proud of our team's attitude, commitment, and
performance in this very difficult operating environment. Additionally, I
appreciate the ongoing support of our vendors and lenders as we continue
towards our goal of improving shareholder value."
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 150 stores in 18 states located in the Midwestern, Southwestern,
Pacific Coast and Rocky Mountain areas. The stores operate under the names
Payless Cashways, Furrow, Lumberjack, Hugh M. Woods, Knox Lumber and
Contractor Supply.
Forward-Looking Statements
Forward-looking statements are made pursuant to 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. These statements
are based on the current plans and expectations of the Company. Investors are
cautioned that all forward-looking statements involve risks and uncertainty.
Among the factors that could cause actual results to differ materially are the
following: commodity prices; competitor activities; interest rates; supplier
support; stability of customer demand; stability of the work force; consumer
spending and debt levels; new and existing housing activity; product mix;
growth of certain market segments; weather; an excess of retail space devoted
to the sale of building materials; the successful implementation of an
Internet ordering system; the success of the Company's strategy, including its
e-commerce opportunities; and the successful completion of the new credit
service agreement implementation. 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 website,
payless.cashways.com .
PAYLESS CASHWAYS, INC.
Third Quarter Ended August 26, 2000
Operating Data (Unaudited)
(In thousands, except percentages and per share amounts)
Thirteen Weeks Ended
August 26, 2000 August 28, 1999
Amount Percent Amount Percent
Net sales $391,815 100.0% $492,160 100.0%
Cost of merchandise sold 284,866 72.7 362,217 73.6
Gross margin 106,949 27.3 129,943 26.4
Selling, general and
administrative 84,732 21.6 108,052 22.0
Other income (403) (.1) (523) (.1)
EBITDA 22,620 5.8 22,414 4.6
Provision for depreciation
and amortization 7,605 2.0 10,563 2.2
Interest expense 10,606 2.7 8,636 1.8
Income before income taxes 4,409 1.1 3,215 .6
Federal and state income taxes 2,056 .5 1,502 .3
NET INCOME $2,353 .6% $1,713 .3%
Net income per common
share-basic $0.12 $0.09
Weighted average common
shares outstanding 20,000 20,000
Thirty-Nine Weeks Ended
August 26, 2000 August 28, 1999
Amount Percent Amount Percent
Net sales $1,160,658 100.0% $1,376,761 100.0%
Cost of merchandise sold 846,390 72.9 1,014,869 73.7
Gross margin 314,268 27.1 361,892 26.3
Selling, general and
administrative 267,933 23.1 323,252 23.5
Other income (1,738) (.1) (1,587) (.1)
EBITDA 48,073 4.1 40,227 2.9
Special (credits) charges -- -- (5,400) (.4)
Provision for depreciation
and amortization 22,678 1.9 28,722 2.1
Interest expense 31,328 2.7 26,158 1.9
Loss before income taxes (5,933) (.5) (9,253) (.7)
Federal and state
income taxes (4,278) (.4) (3,821) (.3)
NET LOSS $(1,655) (.1)% $(5,432) (.4)%
Net loss per common
share-basic $(0.08) $(.27)
Weighted average common
shares outstanding 20,000 20,000
PAYLESS CASHWAYS, INC.
Condensed Balance Sheets (Unaudited)
(In thousands)
August 26, November 27, August 28,
2000 1999 1999
ASSETS
CURRENT ASSETS
Cash and cash equivalents $990 $1,111 $2,241
Merchandise inventories 337,576 349,332 361,687
Prepaid expenses and
other current assets 17,263 22,013 22,716
Income taxes receivable -- 679 773
Deferred income taxes -- -- 69
TOTAL CURRENT ASSETS 355,829 373,135 387,486
OTHER ASSETS
Real estate held for sale 5,680 8,851 4,730
Deferred financing costs 3,114 3,944 2,202
Other 1,474 1,549 1,505
LAND, BUILDINGS, EQUIP. &
SOFTWARE, NET 333,365 340,912 352,416
$699,462 $728,391 $748,339
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $5,178 $3,265 $10,160
Trade accounts payable 46,505 51,480 68,000
Other current liabilities 79,477 88,645 96,407
Income taxes payable 1,037 4,008 1,924
TOTAL CURRENT LIABILITIES 132,197 147,398 176,491
LONG-TERM DEBT, less portion
classified as current liability 373,500 374,154 362,185
NON-CURRENT LIABILITIES 42,123 53,542 53,662
SHAREHOLDERS' EQUITY
Common stock 200 200 200
Additional paid-in capital 183,600 183,600 183,600
Accumulated deficit (32,158) (30,503) (27,799)
TOTAL SHAREHOLDERS' EQUITY 151,642 153,297 156,001
$699,462 $728,391 $748,339
PAYLESS CASHWAYS, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Thirty-Nine Weeks Ended
August 26, August 28,
2000 1999
Cash Flows from Operating Activities
Net loss $(1,655) $(5,432)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Non-cash special credits -- (10,600)
Depreciation and amortization 22,678 28,722
Deferred income taxes (4,257) (3,821)
Other (76) 1,698
Changes in assets and liabilities (8,703) (12,046)
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 7,987 (1,479)
Cash Flows from Investing Activities
Additions to land, buildings, equipment
and software (14,240) (38,757)
Proceeds from sale of land, buildings
and equipment 5,740 15,920
(Increase) decrease in other assets 75 (13)
NET CASH USED IN INVESTING ACTIVITIES (8,425) (22,850)
Cash Flows from Financing Activities
Principal payments on long-term debt (8,275) (21,280)
Net proceeds from revolving credit facility 9,534 46,000
Financing fees (942) (100)
NET CASH PROVIDED BY FINANCING ACTIVITIES 317 24,620
Net increase (decrease) in cash and
cash equivalents (121) 291
Cash and cash equivalents, beginning of period 1,111 1,950
Cash and cash equivalents, end of period $990 $2,241
PAYLESS CASHWAYS, INC.
Long-Term Debt
(In thousands)
August 26, November 27, August 28,
2000 1999 1999
1999 Credit Agreement, variable
interest rate $192,920 $183,386 $--
1997 Credit Agreement, variable
interest rate 106,048 109,415 286,088
Mortgage loan, variable
interest rate 78,875 83,686 85,279
Other senior debt 835 932 978
378,678 377,419 372,345
Less portion classified as
current liability (5,178) (3,265) (10,160)
$373,500 $374,154 $362,185
SOURCE Payless Cashways
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Related links:
http://www.payless.cashways.com
CONTACT:
Richard B. Witaszak, Sr. V.P.-Finance & CFO,
816-347-6974, or e-mail, Web.investor@payless.cashways.com
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