OSF Inc. Announces 1999 Third Quarter Results.TORONTO--(BUSINESS WIRE)--Oct. 14, 1999-- (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :OSF See Open Group. OSF - Open Software Foundation .) OSF Inc. today reported sales for the three months ended August 31, 1999 were $88.3 million, as compared to $67.3 million for the same period in 1998. Sales for the nine months ended August 31, 1999 were $161.4 million, as compared to $185.3 million for the same period in 1998. Sales in the second quarter of 1998 were substantially increased by approximately $50 million as a result of sales to our principal customer, originally expected to occur later that year. Net income for the third quarter of 1999 was $4.0 million or $.21 per share (fully 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. ), compared to net income of $2.9 million or $.15 per share (fully diluted) for the same period in 1998. Net loss for the first nine months of 1999 was $3.2 million or $.18 per share (fully diluted), compared to net income of $6.6 million or $.35 per share (fully diluted) for the same period in 1998. Gross profit for the third quarter of 1999 was $23.3 million, or 26.4% of sales, compared to $17.8 million, or 26.5% of sales, for the comparable period in 1998. Gross profit for the nine months ended August 31, 1999 was $36.6 million, or 22.7% of sales, compared to $46.6 million, or 25.1% of sales, for the comparable period in 1998. The slight decrease in gross profit percentage for the quarter on a substantially higher sales volume is the result of a combination of increased manufacturing overhead costs overhead costs see fixed costs. required to meet customer requirements, and a less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. sales mix sales mix See product mix. of programs as compared to the prior year. In particular, the substantial production volume of the Company's principal customer in 1998 provided greater production leverage and therefore a higher gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. than that realized in the current year. Selling, general and administrative expenses were essentially flat for the quarter as compared to the prior year. The Company experienced increases in information services See Information Systems. costs related to Enterprise System implementation, but these increases were offset by a decrease in marketing costs, and a prior year write off of loan fees not incurred in 1999. The Company incurred $1.6 million in various professional fees in conjunction with responding to a proposed privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned bid by O Acquisition LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a Delaware limited liability company formed by investment affiliates of Centre Partners Management LLC. That Bid did not take place. In addition, the Company is obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to reimburse re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. Centre Partners $2.5 million in submitted expenses related to their bid attempt, of which $1.7 million has been expensed as of August 31, 1999. The balance of $800,000 represents due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. costs related to the private placement transaction described below, and has been recorded as a prepaid expense Prepaid Expense An asset that arises on a balance sheet because of the payment of something in advance (prepayment). Services for the payment will be received in the near future. as of August 31, 1999. On September 27, 1999, the Company announced it had entered into a letter of intent with Centre Partners respecting a private placement of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. at $7.00 per share with each preferred share convertible into a common share on a one-for-one bases. That transaction, which is subject to regulatory approval, was recommended by the Independent Committee of directors of the Company, and unanimously approved by the Company's directors, following an eight week process conducted by the financial advisors to the Independent Committee which canvassed potential acquirors for the Company. This process did not identify any party interested in proceeding with an offer for the Company. Interest expense increased by $300,000 for the quarter over the prior year as a result of the increased borrowing levels supporting the working capital increases. OSF Inc. is a leading North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. producer of complete retail store interiors, predominantly for growth-oriented retail businesses having multiple stores. In partnership with its customers, OSF is involved in many aspects of its customers' store fixturing programs for new stores and store remodellings. This can include providing conceptual design services, manufacturing, installation and comprehensive project management services. OSF Inc.'s customers include Abercrombie & Fitch, Armani, Brookstone, Canadian Tire Canadian Tire (TSX: CTC, CTC.A) is one of Canada's 35 largest publicly traded companies and operates an inter-related network of businesses engaged in retailing (hardgoods, apparel and petroleum) and services (financial and automotive). , Consumer Value Stores, The Disney Stores, Dockers
Dockers is a brand of Levi Strauss & Co. Levi Strauss & Co. , Eddie Bauer Eddie Bauer (NASDAQ: EBHI) is a clothing store chain. Headquartered in Bellevue, Washington, and a subsidiary of Eddie Bauer Holdings (formerly Spiegel, Inc.), the company was founded in Seattle in 1920 as "Eddie Bauer's Sport Shop" by its namesake, Eddie Bauer (1899 – , Esprit, Estee Lauder, Levi Strauss
Levi Strauss, born Löb Strauß , The Limited Group of Stores, including Bath & Bodyworks, Express, Lane Bryant Lena Himmelstein Bryant Malsin (1879? - September 26, 1951) was an American clothing designer and retailer who founded the plus-size clothing chain Lane Bryant. Early Life & Career , Lerner, Structure and Victoria's Secret For the Sonata Arctica single, see Victoria's Secret (song) Victoria's Secret is an American retailer of high quality lingerie and beauty products.[2] , Loblaws, Nautica, Nordstroms, Office Depot Office Depot (NYSE: ODP) is one of the world's leading suppliers of office products and services. The Company's selection of brand name office supplies includes business machines, computers, computer software and office furniture, while its business services encompass copying, , Perry Ellis Perry Ellis (March 3, 1940 – May 30, 1986) was an American fashion designer who founded a sportswear house in the mid-1970s. The Rise of Perry Ellis Perry Edwin Ellis was born in Portsmouth, Virginia, on March 3, 1940, as the only child of Edwin and Winifred , Polo Ralph Lauren Polo Ralph Lauren (NYSE: RL) is American fashion designer Ralph Lauren's luxury lifestyle company. Polo Ralph Lauren specializes in high-end casual/semi-formal wear for men and women, as well as accessories, fragrance, and housewares. , Rite Aid Rite Aid (NYSE: RAD) is a United States retailer and pharmacy chain, operating over 5,000 stores in 31 states and the District of Columbia. Rite Aid Corporation is one of the nation's leading drugstore chains. Corporation, Sears Roebuck & Co., Shoppers Drug Mart For the Washington, DC area grocery chain, see . Shoppers Drug Mart Corporation TSX: SC is Canada's largest pharmacy chain with more than 1000 stores operating under the names Shoppers Drug Mart across 9 provinces and 2 territories and Pharmaprix in Quebec. , Tommy Hilfiger Thomas Jacob Hilfiger (born March 24, 1951 in Elmira, New York) is a world-famous American fashion designer and creator of the eponymous "Tommy Hilfiger" and "Tommy" brands. Biography Hilfiger was born March 24, 1951 and raised in Elmira, New York. , Venator Group, including Afterthoughts, Champs and Footlocker, Warner Brothers Warner Brothers (b. Eichelbaums) movie executives; Harry (Morris) (1881–1958), born in Krasnashiltz, Poland; Albert (1884–1967), born in Baltimore, Md.; Samuel (1887–1927), born in Baltimore, Md. and Zellers.
OSF Inc.
Consolidated Statement of Earnings
(unaudited) For the three For the nine
months ended months ended
(Canadian dollars in
thousands except per share
amounts) August August August August
31 31 31 31
1999 1998 1999 1998
-------------------------------------------------------------------
Sales $ 88,317 $ 67,275 $161,448 $185,273
Cost of goods sold 65,006 49,469 124,821 138,686
------------------------------------
Gross profit 23,311 17,806 36,627 46,587
------------------------------------
Selling, general and
administrative expenses 8,972 9,048 25,498 25,612
Professional fees resulting
from aborted privatization
agreement 3,253 - 3,253 -
------------------------------------
12,225 9,048 28,751 25,612
------------------------------------
Earnings before interest,
taxes, and amortization 11,086 8,758 7,876 20,975
------------------------------------
Amortization 2,260 2,095 6,610 5,919
Interest on long-term debt 1,806 899 5,380 1,283
Other interest 276 874 795 3,034
------------------------------------
4,342 3,868 12,785 10,236
------------------------------------
Earnings (loss) before income
taxes 6,744 4,890 (4,909) 10,739
Income taxes 2,785 2,038 (1,689) 4,143
------------------------------------
Net earnings (loss) $ 3,959 $ 2,852 $ (3,220) $ 6,596
------------------------------------
------------------------------------
Net earnings (loss) per common share:
Basic $ 0.22 $ 0.16 $ (0.18) $ 0.37
Fully Diluted $ 0.21 $ 0.15 $ (0.18) $ 0.35
OSF Inc.
Consolidated Balance Sheet
------------------------------------------------------------------
(unaudited)
(Canadian dollars in thousands)
As at August 31 August 31
1999 1998
------------------------------------------------------------------
Assets
Current
Accounts receivable $ 93,115 $ 66,539
Inventories 65,679 52,606
Income taxes recoverable 487 -
Current portion of future income
taxes 726 62
Prepaid expenses, deposits and other
assets 4,055 4,047
-------------------------------
164,062 123,254
Note receivable 746 702
Future income taxes 5,960 2,316
Deferred expenses 969 -
Capital assets - net of depreciation 58,323 58,253
-------------------------------
$ 230,060 $ 184,525
-------------------------------
-------------------------------
Liabilities
Current
Bank indebtedness $ 11,539 $ 1,194
Progress payments 17,213 15,913
Accounts payable and accrued
liabilities 39,755 21,906
Income taxes payable - 1,186
Current portion of future income
taxes 307 -
Current portion of deferred revenue 1,808 114
Current portion of long-term debt 889 749
-------------------------------
71,511 41,062
Deferred revenue 5,538 1,796
Long-term debt 91,309 91,384
Future income taxes 7,223 2,500
-------------------------------
$ 175,581 $ 136,742
-------------------------------
Shareholders' Equity
Capital stock $ 89,411 $ 89,411
Deficit (34,932) (41,628)
-------------------------------
54,479 47,783
-------------------------------
$ 230,060 $ 184,525
-------------------------------
-------------------------------
OSF Inc.
Consolidated Statement of Changes in Financial Position
------------------------------------------------------------------
(unaudited)
(Canadian dollars in thousands)
For the nine months ended August 31 August 31
1999 1998
------------------------------------------------------------------
Cash provided from (used for)
operating activities
Net earnings(loss) $ (3,220) $ 6,596
Item not affecting cash
Amortization 6,610 5,919
Future income taxes (1,435) (997)
Loss on disposal of capital assets 41 61
Amortization of debenture issue
expenses 226 -
Deferred revenue 5,748 (1,021)
---------------------------------
7,970 10,558
Cash flows provided from (used for)
changes in non-cash working capital
Accounts receivable 8,598 (5,542)
Inventories (29,986) (27,138)
Prepaid expenses, deposits and
other assets (24) 841
Progress payments 14,334 14,472
Accounts payable and accrued
liabilities 11,745 6,870
Income taxes payable (7,013) 3,193
-------------------------------
5,624 3,254
-------------------------------
Cash provided from (used for)
financing activities
Long-term debt 217 66,469
Bank indebtedness (535) (59,524)
Issue of common shares - 37
-------------------------------
(318) 6,982
-------------------------------
Cash flows provided from (used for)
investing activities
Purchase of capital assets (5,327) (10,448)
Notes receivable 21 212
-------------------------------
(5,306) (10,236)
-------------------------------
Change in cash during the period - -
Cash, beginning of period - -
-------------------------------
Cash, end of period $ - $ -
-------------------------------
-------------------------------
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