MATTHEWS, N.C., Nov. 25 /PRNewswire/ -- PCA International, Inc.
(Nasdaq-NNM: PCAI) today reported in a separate release that PCA has entered
into a nonbinding letter of intent providing for the acquisition by PCA of
American Studios, Inc., (Nasdaq: AMST) for $2.50 per share in cash subject to
the approval by the Board of Directors of both companies.
For the third quarter ended October 27, 1996, PCA today reported net income
of $641,112, or $.08 per share as compared to net income of $1.7 million, or
$.21 per share in the year-ago third quarter. Sales during this year's third
quarter increased by .5% to $37.1 million.
For the nine months ended October 27, 1996, net income was $2.0 million,
or $.25 per share versus $2.7 million, or $.33 per share in the comparable
period of the prior year. Sales for the nine months were $104.3 million, a 6%
increase as compared to the prior year.
The Company attributed the decline in net income during the third quarter
to three factors; the start-up expenses and operating losses incurred to
support the Company's aggressive diversification programs in PETsMART and Wal-
Mart; the Company's Super Kmart studio enlargement and relocation program; and
to a decline in customers photographed in the quarter in the Company's U.S.
Kmart studios.
In the third quarter, the Company opened 32 new PETsMART studios in the
United States and 26 new Wal-Mart studios in the United States and Canada.
Also in the third quarter, the Company relocated 45 Super Kmart studios to
high traffic store front locations and expanded the studios to accommodate two
camera rooms and a larger reception area. The expenses incurred to support
these openings and conversions, as well as the operating losses generated by
these new businesses, negatively impacted this year's third quarter by
$.07 a share.
PCA International, Inc., 3rd Quarter Results
The balance in the short fall in earnings resulted from an unanticipated
decline in the number of customers photographed during the quarter in the U.S.
Kmart studios. While the company cannot be certain with regard to the reasons
for the third quarter customer shortfall, the Company attributes the decline
to an overall third quarter softness in the retail portrait industry and
changing customer seasonal portrait patterns as a result of the greater
availability of permanent studios compared to traveling portrait promotions.
Subsequent to the third quarter and during the first four weeks of the
fourth quarter, the number of customers photographed in the U.S. Kmart
studios, as compared to the Company's expectations has improved significantly
and is slightly higher than the number of customers photographed in the
comparable four-week period of the prior year.
PCA International, Inc., provides professional portrait services in 1,574
permanent studios in the United States, Canada, and Puerto Rico. PCA
presently operates 1,375 studios in Kmart stores in the United States and
Puerto Rico; 85 studios in Wal-Mart stores in the United States, Canada, and
Puerto Rico; and 114 studios in PETsMART stores in the United States and
Canada.
PCA INTERNATIONAL, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
October 27, October 29, October 27, October 29,
1996 1995 1996 1995
SALES $37,093,025 $36,890,845 $104,297,847 $98,129,089
COSTS AND EXPENSES:
Advertising and
promotional costs 4,799,759 4,194,123 11,864,291 11,127,541
Costs of photographic
sales 13,005,884 12,536,703 36,256,693 33,463,609
Store commissions and
selling costs 12,121,559 11,452,713 34,434,883 31,214,335
General and administrative
expenses 6,054,604 5,690,289 18,219,525 17,235,289
Total costs and
expenses 35,981,806 33,873,828 100,775,392 93,040,774
INCOME FROM
OPERATIONS 1,111,219 3,017,017 3,522,455 5,088,315
Interest expense, net 48,178 178,188 83,485 443,733
INCOME BEFORE INCOME
TAXES 1,063,041 2,838,829 3,438,970 4,644,582
INCOME TAX PROVISION 421,929 1,161,360 1,426,783 1,917,610
NET INCOME $641,112 $1,677,469 $2,012,187 $2,726,972
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
Primary 8,131,921 8,030,550 8,019,678 8,149,227
Fully Diluted 8,132,376 8,030,710 8,147,005 8,236,618
PRIMARY AND FULLY DILUTED EARNINGS PER
COMMON SHARE:
Net Income $0.08 $0.21 $0.25 $0.33
CASH DIVIDENDS PER COMMON
SHARE $0.07 $0.07 $0.21 $0.21
See Condensed Notes to Consolidated Financial Statements.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
October 27, January 28,
ASSETS: 1996 1996
Current Assets:
Cash and cash equivalents $234,293 $3,914,513
Other current assets 21,533,520 13,189,367
Total Current Assets 21,767,813 17,103,880
Net Property and Equipment 47,175,686 42,752,368
Other Assets 1,524,959 28,228
TOTAL ASSETS $70,468,458 $59,884,476
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Short-term borrowings $7,470,964 $ -
Accounts payable-trade 12,515,112 9,178,213
Other current liabilities 10,833,037 11,803,489
Total Current Liabilities 30,819,113 20,981,702
Deferred Income Taxes 5,178,245 4,562,570
Other Liabilities 2,773,508 3,105,595
Shareholders' Equity 31,697,592 31,234,609
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $70,468,458 $59,884,476
SOURCE PCA International, Inc.
 back to top
CONTACT:
Bruce Fisher, Senior Vice President, Chief
Financial Officer, PCA International, Inc., 704-847-8011, Ext.
2404
|
