Dairy Mart Reports Fourth Quarter and Year-End Results; Announces Plan to Sell 246 Stores, Improve Profitability, Reduce Debt.Business Editors HUDSON, Ohio--(BUSINESS WIRE)--April 27, 2000 Dairy Mart Convenience Stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. , Inc. (AMEX AMEX See: American Stock Exchange :DMC DMC Devil May Cry (video game) DMC Detroit Medical Center DMC Darryl McDaniels (rapper) DMC Destination Management Company DMC Del Mar College (Corpus Christi, TX) ) today announced results for the fiscal fourth quarter and year ended January 29, 2000. The company also announced a major initiative to sell stores that do not meet internal profitability criteria and do not meet the company's profile for its store portfolio going forward. The company expects the initiative to enhance profitability and strengthen the balance sheet through the reduction of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Fourth Quarter and Year End Results Revenues for fiscal 2000 increased 22 percent to $581.1 million compared to revenues of $477.0 million in 1999. For the fourth fiscal quarter, revenues were $147.8 million compared to $114.9 million in the same quarter last year. Comparable store sales increased 11 percent in fiscal 2000 and comparable gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by gallons sold increased five percent for the year. "Despite some positive indicators for the year, including improved top-line performance and an 11 percent increase in comparable store sales, our results are clearly a disappointment," said Robert B. Stein Stein , William Howard 1911-1980. American biochemist. He shared a 1972 Nobel Prize for pioneering studies of ribonuclease. Jr., Chairman, President and Chief Executive Officer. "As we reported earlier this month, we were hit hard in the fourth quarter by industry-wide trends of lower gasoline profit margins, lower merchandise margins led by tobacco products, and increased operating costs operating costs npl → gastos mpl operacionales primarily in store labor costs attributable to a tight labor market labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience ." In addition to these industry-wide factors, the company had nonrecurring pre-tax expenses totaling $2.0 million in the fourth quarter associated with a derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement, costs associated with its ongoing pursuit of an oil-branding relationship, and the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of the company's two classes of common stock into a single class. As a result, the company had a net loss of $2.5 million, or $0.51 per share for the year ended January 29, 2000, compared with a net profit of $25,000, or $0.01 per share during the prior fiscal year. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Strategic Repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. of Store Portfolio The company also announced that it is implementing a comprehensive program aimed at improving the company's profitability, reducing debt and enhancing the quality of the Dairy Mart asset base. Under the plan, the company will sell or close stores that do not meet internal profitability criteria and do not fit the company's desired one-stop-shopping profile for its stores. Additionally, the company anticipates the sale of an under-utilized Small Business Investment Company (SBIC SBIC Small Business Investment Company SBIC Sustainable Buildings Industry Council SBIC Singapore Bioimaging Consortium (Singapore) SBIC School Bus Information Council SBIC Saudi Basic Industries Corporation SBIC Scsi Bus Interface Controller ) subsidiary licensed by the Small Business Administration. "As consumer preferences have changed to put a premium on one-stop shopping and even greater convenience specifically through the inclusion of gasoline, our preferred product offerings for the stores in our portfolio has also changed, as evidenced by our new store development efforts," Stein said. "As a result, we have been examining options for our older and lower-volume stores for some time. In the fourth quarter, the market factors that were negatively impacting our results - higher labor costs, and declining merchandise and gasoline margins - brought into even sharper focus the need to prune prune, popular name for a dried plum. Fruits of the many varieties of Prunus domestica, which are firm-fleshed and dry easily without removal of the stone, are gathered after falling from the tree, dipped in lye solution to prevent fermentation, dried in the non-strategic and inadequately profitable locations from our portfolio. " "Accordingly, we began developing an action program last fall to address the quality of our store portfolio and the percentage of stores that sell gasoline," Stein said. "Our goal with this plan, which the Board of Directors approved at its April 6 meeting, is to create a stronger, more competitive organization, with a smaller, higher-quality asset base. For the first time in the company's history, a majority, or 61%, of our locations would offer the sale of gasoline versus 46% today. This puts us in a much better competitive position and provides a much-improved platform from which to pursue our existing growth strategy related to new store development and the growth of higher-margin food service sales." Under the plan, the company will seek one or more buyers for the affected stores, or about 40% of its 601 stores. In aggregate, these 246 stores accounted for approximately $3 million in pre-tax loss in the year ended January 29, 2000 after taking into consideration the variable overhead the company incurred on their behalf. These same stores accounted for approximately 20% of total revenues during the same period. Proceeds from the sale of stores will be used to reduce the company's long-term debt. In the plan, targeted stores have been segmented by sales volume, cash flow, profitability, asset quality, and other factors. The company may elect to retain a limited number of stores in the highest profitability tier if they cannot be sold at an acceptable price. Along with the sale and/or closure of stores, the company will reduce corporate and field overhead commensurately com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. . Approximately 70 positions at the company's Hudson, Ohio Hudson is a city in Summit County, Ohio, United States. The population was 22,439 at the 2000 census, making it the 389th largest city in the midwest. This number rose to 23,154 at the 2006 census estimates [1]. , headquarters and in regional offices will be eliminated, though the total number of affected employees may be less due to positions that have gone unfilled pending the completion of the plan. Positions at all levels will be affected, as evidenced by the reduction of two corporate vice president positions already in the first fiscal quarter. "While this is the right thing to do for our company and our shareholders, we recognize that some employees will be negatively impacted," Stein said. "For those employees whose positions are eliminated, we are committed to fair treatment with dignity, including severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and, in most cases, outplacement out·place·ment n. The process of facilitating a terminated employee's search for a new job by provision of professional services, such as counseling, paid for by the former employer. assistance. And while it is not possible at this point to say precisely who will be affected, we will share more information with our employees as soon as it is available," he added. Affected employees, including store personnel whose locations may be ultimately closed, will also be considered for open positions elsewhere in the organization, Stein added. The company expects the corporate and field position reductions to be effective commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the sale or closings of stores. Dairy Mart Convenience Stores, Inc., was named "Convenience Store Chain of the Year" in 1999 by Convenience Store Decisions magazine. The company owns and operates approximately 600 retail stores in seven states in the Midwest and Southeast. Through consulting and licensing agreements, the Company is also affiliated with more than 200 stores in Korea and approximately 400 locations in Malaysia. For more information, visit Dairy Mart's web site at www.dairymart.com. Statements contained in this release that are not historical facts, including those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future financial performance, the sale of or closure of stores, reduction in debt, increases in shareholder value, and overhead reductions may constitute 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. with respect to Dairy Mart's future performance. Forward-looking statements are generally identified by the words, "anticipate," "believe," "expect," "will," "plan," "intent," "should," "estimate," and similar expressions. Factors that could cause actual results to differ materially from those stated or implied in the forward-looking statements include competition, general economic conditions, the ability to find one or more suitable buyers for stores at acceptable prices, the ability of such buyers to finance store purchases, the availability of capital, the ability to attract and retain key personnel, and other factors disclosed in Dairy Mart's periodic filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information contained in this release. A definitive proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. and form of proxy prepared by the company with respect to the company's annual stockholder's meeting, containing information regarding the nominees for director supported by the company, each participant's interest in the company and information regarding MacKenzie Partners, the company's proxy solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual firm, will be furnished fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. to shareholders in the company's definitive proxy statement. Shareholders are urged to read the proxy statement carefully as it will contain important information about the company nominees. The definitive proxy statement will be available on the SEC's Internet site at http://www.sec.gov. In addition, the company will provide to any requesting shareholder additional copies of the definitive proxy statement and form of proxy as soon as they are available. Requests for any such materials should be directed to MacKenzie Partners at their toll free number: (800) 322-2885.
Dairy Mart Convenience Stores, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, expect per share amounts)
FOR THE FOURTH FISCAL FOR THE FISCAL
QUARTER ENDED YEAR ENDED
-------------------------------------------
(unaudited)
Jan. 29, Jan. 30, Jan. 29, Jan. 30,
2000 1999 2000 1999
--------- --------- --------- ---------
Revenues $ 147,828 $ 114,886 $ 581,119 $ 477,047
Cost of goods
sold and expenses:
Cost of goods sold 113,059 81,614 435,867 339,308
Operating and
administrative expenses 38,519 31,955 137,329 126,758
Interest expense 3,267 2,779 11,583 10,806
--------- --------- --------- ---------
154,845 116,348 584,779 476,872
--------- --------- --------- ---------
Income (loss) before
income taxes (7,017) (1,462) (3,660) 175
Benefit (provision)
from income taxes 2,757 633 1,164 (150)
--------- --------- --------- ---------
Net income (loss) $ (4,260) $ (829) $ (2,496) $ 25
--------- --------- --------- ---------
--------- --------- --------- ---------
Earnings (loss)
per basic share $ (0.88) $ (0.17) $ (0.51) $ 0.01
Weighted average number
of shares - basic 4,841 4,846 4,869 4,823
Earnings before interest
expense, income taxes,
depreciation and
amortization (EBITDA)(a) $ 908 $ 3,286 $ 21,338 $ 21,079
--------- --------- --------- ---------
--------- --------- --------- ---------
(a) EBITDA is significant to the Company's calculations of its
financial covenants and is defined as earnings before interest
expense, income taxes and depreciation and amortization. EBITDA
should not be viewed as a substitute for Generally Accepted
Accounting Principles (GAAP) measurements such as net income
(loss) or cash flow from operations.
AMEX TRADING SYMBOL - DMC
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