Catherines Stores Corporation reports January sales and announces write-down of impaired assets.MEMPHIS Memphis, city, ancient Egypt Memphis (mĕm`fĭs), ancient city of Egypt, capital of the Old Kingdom (c.3100–c.2258 B.C.), at the apex of the Nile delta and 12 mi (18 km) from Cairo. , Tenn.--(BUSINESS WIRE)--Feb. 8, 1996--Catherines Stores Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CATH CATH Catholic CATH Cathedral CATH Cathode CATH Autonomous Haitian Workers (Haiti) CATH Center for Applied Technologies in the Humanities (Virginia Tech) ) announced Thursday that unaudited sales for the five-week period ended Feb. 3, 1996 were $18.6 million compared to $14.5 million for the four-week period ended Jan. 29, 1995. For the 53 week year ended Feb. 3, 1996, sales were $274.1 million compared to $256.4 million for the 52 week year ended January 29, 1995. Comparable stores' sales based on a four week January period, a thirteen week fourth quarter and a 52 week year increased 2.7%, decreased 3.6% and increased 0.4%, respectively. Catherines also announced that it will adopt the provisions of Statement of Financial Accounting Standards 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of in the fiscal year ended Feb. 3, 1996. This Statement clarifies the timing and method of measurement of impaired assets Impaired Asset An asset with a market value that is worth less than its book value. Notes: If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair and requires the write-down of impaired assets to fair market value. Under SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 121, the company intends to write-down, by approximately $1.9 million to $2.2 million, the leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. , furniture and fixtures, and the goodwill related to 40 underperforming stores. After income taxes, this non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. will reduce earnings by between $1.1 million to $1.4 million or between $0.14 to $0.17 per common share. During the fourth quarter, the company has closed or has made agreements to close 12 stores. The company expects to expense approximately $800,000 for store closing costs Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, including asset write-offs and lease termination costs. After income taxes, these costs will reduce fiscal 1995's net income per common share by $0.04. Commenting on the implementation of SFAS 121 and the store closing costs, David C. Forell, executive vice president and chief financial officer said, "Applying SFAS 121 in fiscal 1995 will reduce fiscal 1996 depreciation and amortization in excess of $300,000. In addition, the stores we have closed or expect to close were losing over $600,000 annually before allocation of corporate overhead. Taking these actions in fiscal 1995 will help improve profitability in 1996, and continue to strengthen the company's financial position during these tough economic times." Catherines Stores Corporation is a Memphis based specialty retailer selling large-size women's apparel in 432 stores in 40 states operating under the names Catherine's; PS..Plus Sizes, Plus Savings; Added Dimensions; and The Answer. CONTACT: Catherines Stores Corporation, Memphis David C. Forell, 901/363-3900, ext. 271 |
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