MATTHEWS, N.C., Dec. 3, 1997 /PRNewswire/ -- PCA International, Inc.
(Nasdaq: PCAI), reported sales for its third quarter ended November 2, 1997,
increased 65 percent to $61.2 million from $37.1 million reported in the
comparable quarter one year ago. The Company reported net income for the 1997
third quarter was up 200 percent to $1.9 million, or $0.22 per share, compared
to net income of $0.6 million, or $0.08 per share, in the 1996 third quarter.
Third quarter results reflect increased operating benefits resulting from the
American Studios acquisition and include $1.7 million in interest expense, or
$0.12 per share after-tax, and $0.5 million in amortization of intangible
assets related to the acquisition.
PCA sales for the nine months increased 60 percent to $167.1 million from
$104.3 million in the corresponding period one year ago. The Company reported
net income for the 1997 nine months of $0.9 million, or $0.11 per share,
versus net income of $2.0 million, or $0.25 per share, in the 1996 nine
months. Earnings for the 1997 nine months include the costs and expenses
incurred during the first half of the year to complete the American Studios
integration and the digital studio conversion initiatives, as well as the
closing of underperforming portrait photography studios during the period.
John Grosso, PCA President and Chief Executive Officer stated, "The
Company's strong third quarter results, as evidenced by a 386 percent increase
in income from operations, demonstrate our successful integration of American
Studios and the improved operating performance of our studio business. During
the quarter we saw the positive impact of our transformed studio asset base
which resulted in increased earnings, improved operating margins, and cash
flow."
During the third quarter, the Company opened 95 new digital studios in
host retail stores with a total of 173 new digital portrait studios opened
thus far in 1997. As of November 2, 1997, the Company operated 2,069 portrait
studios worldwide, with 1,950 in the United States and 119 internationally.
The Company's Board of Directors also announced today a cash dividend of
$0.07 per share, payable January 7, 1998, for shareholders of record as of
December 15, 1997.
PCA is the largest operator of discount retail portrait studios worldwide.
The Company operates more than 2,000 permanent portrait studios within Kmart
and Wal-Mart stores and supercenters. PCA also operates traveling promotions
in more than 1,400 Wal-Mart locations and offers on-site photography services
to churches and other institutions. The Company's studios are located in the
United States, Canada, Mexico, Puerto Rico, and South America.
PCA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
November 2, February 2,
ASSETS: 1997 1997
Current Assets:
Cash and cash equivalent $ 3,936,773 $ 1,536,234
Other current assets 28,002,875 25,464,269
Total Current Assets 31,939,648 27,000,503
Net Property and Equipment 57,778,354 58,264,560
Intangible Assets 61,219,697 60,256,854
Other Assets 2,334,974 1,139,305
TOTAL ASSETS $153,272,673 $ 146,661,222
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Short-term borrowings $ 9,000,000 $ --
Current portion of
long-term debt 5,000,000 --
Accounts payable-trade 21,499,788 19,799,067
Other current liabilities 22,709,734 25,672,985
Total Current Liabilities 58,209,522 45,472,052
Long-Term Debt 49,576,925 58,679,770
Deferred Income Taxes 347,941 --
Other Liabilities 8,226,405 8,868,660
Shareholders' Equity 36,911,880 33,640,740
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $153,272,673 $146,661,222
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
November 2, October 27, November 2, October 27,
1997 1996 1997 1996
SALES $61,235,465 $37,093,025 $167,064,104 $104,297,847
COSTS AND EXPENSES:
Advertising and
promotional costs 5,218,214 4,799,759 13,194,294 11,864,291
Costs of photographic
sales 21,411,971 13,005,884 61,907,588 36,256,693
Store commissions
and selling costs 20,309,908 12,121,559 56,599,036 34,434,883
General and
administrative
expenses 8,409,817 6,054,604 27,177,110 18,219,525
Amortization of
intangibles 482,477 -- 1,447,052 --
Total costs and
expenses 55,832,387 35,981,806 160,325,080 100,775,392
INCOME FROM
OPERATIONS 5,403,078 1,111,219 6,739,024 3,522,455
Interest
expense, net 1,719,380 48,178 4,989,876 83,485
INCOME BEFORE
INCOME TAXES 3,683,698 1,063,041 1,749,148 3,438,970
INCOME TAX PROVISION 1,763,854 421,929 825,598 1,426,783
NET INCOME $1,919,844 $641,112 $923,550 $2,012,187
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES:
Primary 8,659,875 8,131,921 8,413,323 8,019,678
Fully Diluted 8,702,670 8,132,376 8,641,240 8,147,005
PRIMARY AND FULLY DILUTED
EARNINGS PER COMMON SHARE:
Net Income $0.22 $0.08 $0.11 $0.25
CASH DIVIDENDS PER
COMMON SHARE $0.07 $0.07 $0.14 $0.21
SOURCE PCA International, Inc.
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CONTACT:
Jean Veatch, Director, Investor Relations and
Corporate Communications, PCA International, Inc., 704-847-8011
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