Cameron Ashley Reports Fiscal 2000 Second Quarter Results.Business Editors DALLAS--(BUSINESS WIRE)--May 18, 2000 Cameron Ashley Building Products, Inc. (NYSE NYSE See: New York Stock Exchange :CAB) today reported results for the second quarter ended April 30, 2000. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter declined to $264.0 million from $270.1 million in the prior year period due primarily to a drop in revenue within the Cameron division reflecting softened soft·en v. soft·ened, soft·en·ing, soft·ens v.tr. 1. To make soft or softer. 2. To undermine or reduce the strength, morale, or resistance of. 3. business conditions as well as a loss of sales associated with the closing of three branches during the quarter. Same-store sales Same-store sales is a business term which refers to the revenue generated by one of a retail chain's specific outlets during a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year. declined 2.7% overall, with the Cameron division down by 5.0%. The softness experienced in the Cameron division during the quarter more than offset the strong performance of the Ashley division, which reported same-store sales growth of 9.0%. The Company reported a net loss of $2.4 million, or $(0.28) per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, for the second quarter of fiscal 2000, compared to net income of $3.5 million, or $0.39 per share on a diluted basis, for the prior year period. The 2000 results include pre-tax losses of $6.7 million related to the closure of three branches (Spokane and Tacoma, WA and Harlingen, TX) during the quarter. These expenses include the writedown of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → and goodwill related to these locations, reductions in inventory values to estimated realizable value, future lease obligations and severance costs, as well as the operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. incurred by these branches during the quarter. The second quarter 2000 results also include $566,000 of operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. associated with the systems development and business process re- engineering project in the Cameron division, versus $724,000 in costs for the same period last year. For the six months ending April 30, 2000, net sales increased 5.3% to $519.8 million from $493.5 million in 1999. Same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of increases were 2.2% overall, with 0.8% in the Cameron division and 9.0% in the Ashley division. The Company reported a net loss for the six-month fiscal 2000 period of $3.6 million, or $(0.42) per diluted share, compared to net income of $3.4 million, or $0.39 per diluted share, in the year-ago period. The six-month results for 2000 include the impact of the closed branches discussed above in addition to the impact of the Field Marketing subsidiary's loss in the first quarter and higher operating expenses associated with inefficiencies and lack of familiarity with the new management system installed at several larger branches earlier in the year. The six-month fiscal 2000 period also includes $1.1 million in expenses associated with systems development costs, compared to $1.1 million in costs for the same period in 1999. Ronald R. Ross, Chairman and Chief Executive Officer, commented: "While we are clearly disappointed with the Company's performance this quarter, we are pleased with the strong performance of the Ashley division, which just completed its strongest April ever, and its continuing momentum in same store sales growth. In regard to the Cameron division, we saw some softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. in the business during the quarter. There was also some level of distraction Distraction Divination (See OMEN.) Porlock a “person from Porlock” interrupted Coleridge while he was recollecting the dream on which he based “Kubla Khan”. [Br. Lit.: Poems of Coleridge in Magill IV, 756] with the bidding contest for the Company which played out during the quarter." Mr. Ross continued: "Our decision to close our less profitable branches during the quarter should result in future improvement in our margins. Excluding the impact of the closed branches, Cameron Ashley would have reported a gross margin for the quarter of 20.7% and an EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). margin of 2.3%. Additionally, our Field Marketing subsidiary seems to have turned the corner after realizing a sizeable loss in the first quarter related to unanticipated delays and sales declines at its Home Center division without corresponding reductions in expense levels. In the second quarter, Field Marketing reduced its operating loss to about $100,000, which was very close to our break-even expectation, and beat their targeted budget for the last month of the quarter." Mr. Ross concluded: "Guardian Industries was aware of our decision to close the three branches. They have already commenced a tender offer for the outstanding shares of Cameron Ashley common stock, and, assuming requisite levels of tendered shares are met, receipt of regulatory approvals and satisfaction of other closing conditions, we expect the transaction to close in June." Cameron Ashley Building Products, Inc. is a distributor of a broad line of building products that are used principally in home improvement, remodeling remodeling /re·mod·el·ing/ (re-mod´el-ing) reorganization or renovation of an old structure. bone remodeling and repair work and in new residential construction. The Company distributes its products to independent building material dealers, professional builders Professional Builder (ISSN-1072-0561) is a trade publication and web site owned by Reed Business Information serving the information needs of the housing and light construction marketplace. , large contractors and mass merchandisers through a network of more than 160 branches located throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada. Product lines include roofing, millwork, pool and patio enclosure materials, insulation, siding, steel products, industrial metals and a variety of other building materials Building materials used in the construction industry to create . These categories of materials and products are used by and construction project managers to specify the materials and methods used for . . Certain statements in this release are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " that are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward- looking statements may be indicated by phrases such as "believes", "anticipates", "expects", "intends", "foresees", "projects", "predicts", "forecasts" or similar words and are subject to known and unknown risks and uncertainties which may cause actual results in the future to differ materially from forecasted results. Among the key factors that could cause results to differ materially are: (i) the inability of the parties to the definitive merger agreement to complete the proposed buy-out buy·out also buy-out n. 1. The purchase of the entire holdings or interests of an owner or investor. 2. The purchase of a company or business: ; (ii) actions by competitors, suppliers, customers, shareholders, regulators and others following the announcement of the proposed buy-out; (iii) stock market and financing market conditions; (iv) business and economic conditions in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and in the regional markets in which the Company operate; (v) adverse homebuilding conditions including those related to weather and interest rates; (vi) reliable and cost-effective supply of products from manufacturers; and (vii) technology risks in implementing new and/or converting existing information systems and other risks more fully described in the Company's filings with the Securities and Exchange Commission. The Company does not undertake any obligations to update the information contained herein, which speaks only as of this date. Note: More information on Cameron Ashley Building Products can be found on the Wide World Web at http://www.cabp.com.
CAMERON ASHLEY BUILDING PRODUCTS, INC.
(Unaudited. Dollars in thousands, except per share amounts.)
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months For the Six Months
Ended Ended
4/30/00 4/30/99 4/30/00 4/30/99
NET SALES $263,962 $270,103 $519,751 $493,520
COST OF SALES 211,144 216,006 417,056 394,683
GROSS PROFIT 52,818 54,097 102,695 98,837
OPERATING EXPENSES 48,843 41,771 93,231 80,761
RE-ENGINEERING SYSTEM
& CONVERSION COSTS 566 724 1,133 1,063
EBITDA 3,409 11,602 8,331 17,013
DEPRECIATION & AMORTIZATION 4,199 3,114 7,891 5,948
INCOME (LOSS) FROM
OPERATIONS (790) 8,488 440 11,065
INTEREST EXPENSE 3,335 2,828 6,560 5,411
MINORITY INTEREST 1 (53) (414) (53)
INCOME (LOSS)BEFORE
INCOME TAXES (4,126) 5,713 (5,706) 5,707
PROVISION FOR INCOME TAXES (1,708) 2,236 (2,084) 2,273
CONSOLIDATED NET INCOME
(LOSS) $(2,418) $ 3,477 $(3,622) $ 3,434
NET INCOME (LOSS) PER SHARE
FROM OPERATIONS
BASIC $ (0.28) $ 0.40 $ (0.42) $ 0.40
ASSUMING DILUTION $ (0.28) $ 0.39 $ (0.42) $ 0.39
WEIGHTED AVERAGE SHARES
OUTSTANDING:
BASIC 8,712 8,654 8,704 8,650
ASSUMING DILUTION 8,712 8,801 8,704 8,802
BALANCE SHEET DATA
APRIL 30, OCTOBER 31,
2000 1999
(Unaudited)
CURRENT ASSETS $317,143 $303,730
TOTAL ASSETS 444,565 435,596
CURRENT LIABILITIES 142,794 140,432
LONG-TERM DEBT 165,537 155,224
TOTAL LIABILITIES 315,028 302,574
SHAREHOLDERS' EQUITY 129,537 133,022
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