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| Cosmetic Center Announces Fourth Quarter and Full Year 1997 Results Successful Integration of Operations Following Merger |
COLUMBIA, Md., Jan. 21 /PRNewswire/ -- The Cosmetic Center, Inc.
(Nasdaq: COSC) today announced results for its fourth quarter and the fiscal
year ended December 27, 1997. The Company noted that its results reflect the
merger of Revlon, Inc.'s retail outlet subsidiary, Prestige Fragrance &
Cosmetics, Inc. ("Prestige"), with and into The Cosmetic Center, Inc., which
became effective April 25, 1997. Due to the "reverse acquisition" accounting
for the merger (in which Prestige is considered the acquirer), the financial
statements of the Company for periods prior to the merger include the results
of Prestige alone and the financial statements of the Company for periods
after the merger include the combined results of Prestige and Cosmetic Center.
"We are pleased with the Company's performance in the fourth quarter and
for full year 1997, despite the expected integration challenges we encountered
as a result of the merger, which more than doubled the size of the Company,"
said I. Howard Diener, President and Chief Executive Officer. "We believe
that the successful integration of the operations, especially in the areas of
distribution, systems and personnel, as well as warehouse and corporate
consolidation, will provide efficiencies and opportunities for future growth.
We are moving forward with our strategy of opening new stores in locations
with greater business opportunities and closing underperforming stores."
FOURTH QUARTER RESULTS
Net sales were $64.4 million for the quarter ended December 27, 1997
compared to $28.5 million for the quarter ended December 31, 1996. The
increase is attributable primarily to incremental sales resulting from the
combination of the net sales of Prestige and the Company as a result of the
merger. Comparable store sales, which include Prestige stores only, for the
quarter ended December 27, 1997 were $24.7 million as compared to
$27.7 million for the quarter ended December 31, 1996, the reduction is
primarily due to merger related disruptions.
Operating income for the quarter ended December 27, 1997 was $6.0 million
as compared to operating income of $4.1 million in the comparable period last
year primarily due to incremental sales and cost efficiencies resulting from
the combination of Prestige and the Company as a result of the merger, offset
by a decline in comparable store sales for the 1997 quarter. Net income for
the quarter ended December 27, 1997 was $4.5 million, or $.44 per share,
compared to net income of $3.8 million, or $.45 per share, in the comparable
period last year. Per share amounts are based upon the weighted average
common shares outstanding for the period assuming the number of shares issued
to Revlon in the merger were outstanding for all periods prior to the merger.
FULL YEAR RESULTS
Net sales for the year ended December 27, 1997 were $159.0 million as
compared to $77.4 million for the year ended December 31, 1996. The increase
is attributable primarily to incremental sales resulting from the combination
of the net sales of Prestige and the Company as a result of the merger.
Comparable store sales, which include Prestige stores only, for the year ended
December 27, 1997 were $66.8 million as compared to $75.6 million for the year
ended December 31, 1996, the reduction is primarily due to merger related
disruptions and the impact of the UPS strike in August 1997.
Operating income for the year ended December 27, 1997 was $3.0 million
before a (non-recurring) charge of $4.0 million in the quarter ended June 27,
1997, compared to operating income of $1.4 million in the comparable period
last year. The charge was in connection with the consolidation of
distribution, warehouse and headquarters operations related to the merger.
Net loss for the year ended December 27, 1997 was $4.8 million, or $.51 per
share, compared to net income of $0.4 million, or $.04 per share, for the year
ended December 31, 1996.
The Cosmetic Center, Inc. is a specialty retailer of brand name cosmetic,
fragrance, skincare, hair and personal care products and related items, sold
at value prices. The Company has 266 retail and outlet stores in the U.S.,
operating principally under the names The Cosmetic Center(R) and Prestige
Fragrance & Cosmetics. All 66 retail stores in the Cosmetic Center division
offer a broad range of brand name prestige and mass merchandised products.
Cosmetic Center stores are located principally in the mid-Atlantic region and
Chicago. The 200 outlet stores in the Prestige Fragrance & Cosmetics division
are located in outlet malls nationwide and sell first quality, surplus and
discontinued products from a wide variety of major manufacturers.
Forward Looking Statements
Information in this press release contains forward looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements include, without limitation, statements
regarding the consolidation and integration of operations of Cosmetic Center
and Prestige, expectations as to efficiencies and opportunities expected to
result from the merger, expectations as to future growth and the Company's
strategy with respect to opening and closing stores. In addition to factors
that may be described in the Company's Commission filings, including its
quarterly reports on Form 10-Q and its annual report on Form 10-K, the
following factors, among others, could cause the Company's actual results to
differ materially from those expressed in any forward looking statements made
by the Company: (1) difficulties or delays in integrating, or unanticipated
costs to integrate, the operations of Cosmetic Center and Prestige; (2)
difficulties or delays in realizing the benefits of efficiencies or
opportunities as a result of the merger and in realizing future growth; and
(3) difficulties or delays or unanticipated costs in connection with the
opening and closing of stores as part of the Company's business strategy. The
Company assumes no responsibility to update forward-looking information
contained herein.
THE COSMETIC CENTER, INC.
STATEMENTS OF OPERATIONS
(dollars in thousands, except share and per share data)
Three Months Ended Year Ended
December 27, December 31, December 27, December 31,
1997 1996 1997 1996
Net sales $64,358 $28,447 $159,045 $77,417
Cost of sales
including buying,
occupancy and
distribution 44,460 17,747 109,891 49,897
Selling, general and
administrative
expenses 13,912 6,600 46,121 26,117
Business consolidation
costs -- -- 4,000 --
Operating expenses 58,372 24,347 160,012 76,014
Income (loss) from
operations 5,986 4,100 (967) 1,403
Interest expense (1,430) (273) (3,722) (972)
Other income (expense),
net (5) -- (43) --
Income (loss) before
income taxes 4,551 3,827 (4,732) 431
Provision for income
taxes 95 5 115 50
Net income (loss) 4,456 3,822 (4,847) 381
Net income (loss)
per common share:
Basic $0.44 $0.45 ($0.51) $0.04
Diluted $0.44 $0.45 ($0.51) $0.04
Weighted average common
shares outstanding:
Basic 10,015,101 8,479,335 9,514,399 8,479,335
Diluted 10,026,436 8,479,335 9,514,399 8,479,335
SOURCE The Cosmetic Center, Inc.
back to topRelated links:
Press: Nancy Risdon, 212-527-5791, or
Investor: Deena S. Fishman, 212-527-5230, both of Revlon
CNOC: http://www.prnewswire.com or fax, 800-758-5804, ext.
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