NAPERVILLE, Ill., Sept. 15 /PRNewswire/ -- Factory Card Outlet Corp.
announced today results for its second quarter ended July 31, 1999.
Net loss for the second quarter was $1.8 million or ($0.23) per diluted
share, compared to a net loss of $0.8 million or ($0.11) per diluted share for
the fiscal quarter ended August 1, 1998. The Company's net loss for the
latest fiscal quarter included $2.0 million or ($0.27) per diluted share for
professional fees and other costs related to the reorganization of the
company. Sales for the second quarter ended July 31, 1999 decreased
approximately 5.0% to $52.2 million from $54.7 million for the comparable
quarter last year. During the quarter, the Company closed 27 stores, which
closings contributed to this sales decrease. On a comparable store basis,
sales for the second quarter decreased 1.5%. Comparable store sales continue
to be adversely impacted by the reduced flow of merchandise resulting from
issues associated with the Company's liquidity and the chapter 11 cases.
Net loss for the six months ended July 31, 1999 was $17.8 million or
($2.38) per diluted share compared to a net loss of $0.2 million or ($0.03)
per diluted share for the comparable six months last year. The Company's net
loss for the six months included $14.6 million or ($1.94) per diluted share
for 27 stores closing, professional fees and other costs related to the
reorganization of the company and $1.3 million or ($0.17) per diluted share
for the early retirement of amounts outstanding under a prior credit
agreement. Sales for the six months rose to $104.8 million from $104.6
million for the comparable six months last year. On a comparable store basis,
sales for the six months decreased 2.0%. 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 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; and other
factors both referenced and not referenced in the Company's filings with the
Securities and Exchange Commission.
FACTORY CARD OUTLET CORP.
AND SUBSIDIARY
Consolidated Balance Sheets
(Dollar amounts in thousands, except per share data)
July 31, January 30,
1999 1999
ASSETS (Unaudited)
Current assets
Cash $1,360 $3,597
Merchandise inventories 51,826 61,658
Prepaid expenses and other 1,566 1,727
Total current assets 54,752 66,982
Fixed assets, net 33,387 39,585
Other assets 903 1,004
Total assets $89,042 $107,571
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities not subject to compromise
Current liabilities:
Accounts payable $5,889 $33,089
Current maturities of long-term obligations -- 2,161
Accrued expenses 8,853 8,755
Total current liabilities 14,742 44,005
Noncurrent liabilities:
Revolving credit note payable 13,903 20,653
Long-term obligations -- 1,670
Term loan, net of discount -- 9,669
Deferred rent liabilities 6,773 7,396
Total noncurrent liabilities 20,676 39,388
Liabilities subject to compromise 47,275 --
Total stockholders' equity 6,349 24,178
Total liabilities and stockholders' equity$89,042 $107,571
FACTORY CARD OUTLET CORP.
AND SUBSIDIARY
Consolidated Statements of Operations
(Dollar amounts in thousands, except per share data)
Three fiscal months ended Six fiscal months ended
July 31, August 1, July 31, August 1,
1999 1998 1999 1998
(Unaudited) (Unaudited)
Net sales $52,234 $54,749 $104,767 $104,611
Cost of sales 26,421 27,994 54,541 52,381
Gross profit 25,813 26,755 50,226 52,230
Selling, general and
administrative
expenses 24,982 27,168 50,750 50,915
Interest expense 582 913 1,476 1,694
(Loss) income before
reorganization items,
income taxes and
extraordinary item 249 (1,326) (2,000) (379)
Reorganization items,
net 2,009 -- 14,556 --
Loss before income taxes and
extraordinary item (1,760) (1,326) (16,556) (379)
Income taxes (benefit) -- (530) -- (151)
Loss before
extraordinary item (1,760) (796) (16,556) (228)
Extraordinary item-loss
on early retirement
of debt -- -- 1,292 --
Net loss $(1,760) $(796) $(17,848) $(228)
Loss per share --
Basic/diluted $(0.23) $(0.11) $(2.38) $(0.03)
Weighted average shares outstanding --
Basic/diluted 7,503,098 7,385,196 7,503,098 7,369,791
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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