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REEDS JEWELERS ANNOUNCES YEAR-END REVENUES AND EARNINGS; SALES REVENUES UP 5.6 PERCENT; TOTAL REVENUES UP 5.8 PERCENT; NET EARNINGS AND EARNINGS PER SHARE UP 14.3 PERCENT

REEDS JEWELERS ANNOUNCES YEAR-END REVENUES AND EARNINGS; SALES REVENUES UP 5.6 PERCENT; TOTAL REVENUES UP 5.8 PERCENT; NET EARNINGS AND EARNINGS
 PER SHARE UP 14.3 PERCENT
 WILMINGTON, N.C., May 5 /PRNewswire/ -- Reeds Jewelers (NASDAQ-NMS: REED) today announced that consolidated sales revenues for the fiscal year ended Feb. 29, 1992 increased 5.6 percent to a record $53.725 million from $50.878 million in the previous year. Total revenues increased 5.8 percent to $59.660 million from $56.376 million. As a result, earnings before income taxes rose 8.6 percent to $1.809 million from $1.665 million. Net earnings rose 14.3 percent to $1.102 million from $964 thousand. Earnings per share also rose 14.3 percent to $.32 per share from $.28 per share.
 Finance charges and other credit-related charges accounted for 88.8 percent of other revenues, up from 87.1 percent in the previous year. Gross profits increased 1.1 percent to $22.603 million (42.1 percent of net sales) from $22.340 million (43.9 percent of net sales). Gross margins were impacted by highly competitive pricing and an increase in promotional events designed to build market share, as well as a 3.0 percent increase in occupancy costs. All of the major components of selling, general, and administrative expenses -- advertising, postage, payroll, supplies, and telephone -- were lower as a percentage of net sales, reflecting the company's constant attention to efficient and cost-effective operation. Interest expense was 6.0 percent less this year than last as a result of 0.5 percent lower average borrowings against the company's revolving credit facility and the lower prime rate upon which the company's interest cost is based. Reeds continues to sell approximately 54 percent of its business on its own proprietary charge card, but also continues to be careful and conservative in its management of in-house credit extension. Charge sales grew 4.5 percent this year, while cash sales were 6.9 percent higher. Delinquent balances were 17 percent lower at Feb. 29, 1992 than at Feb. 28, 1991. Notwithstanding the improved portfolio quality, the company increased its allowance for future write-offs of bad debt by $211 thousand to 7.50 percent from 7.25 percent of accounts receivable, which accounted for 52.5 percent of the increase in bad debt expense; actual net write-offs were up 7.2 percent from the year before.
 Alan M. Zimmer, President and Chief Executive Officer, said: "We are pleased with the positive sales and earnings results which Reeds Jewelers enjoyed in the fiscal year just ended. Comparable store sales (sales for stores opened for at least 24 months) were up 1.8 percent. We are especially pleased about our performance in the weak economic environment during most of last year. We are excited about the opportunities which we believe exist in our industry and we remain committed to prudent and profitable growth. According to National Jeweler, a trade publication, Reeds is now the 11th largest jeweler in the nation, moving up from 12th a year ago. We have positioned the company for both sales and earnings growth in the future by continuing to invest in prime locations in many of the premier malls in our marketing area. We have built a strong management team -- our two independent directors themselves have significant experience as CEO's; our five operating executives are young, averaging 40 years of age, but benefit from a total of 60 years of experience in the jewelry industry; our middle managers have been carefully selected to provide the necessary depth to efficiently support continued profitability. Our recently developed and implemented computer systems represent the state-of-the-art for our industry and are expected to support our needs for years to come. We also continue to invest heavily in the training and development of all our people, believing that opportunity, responsibility, and challenge are important factors contributing to the loyalty of our associates. We believe we have positioned Reeds Jewelers to take advantage of an improved economy and to become an even more dominant player in our industry."
 Reeds Jewelers is a retail chain of 67 jewelry stores operating primarily in regionally enclosed malls located in 12 Sunbelt states. The company emphasizes "Quality, Value, and Service" as the cornerstone of its promotionally-oriented strategy to build market share and earnings.
 REEDS JEWELERS, INC.
 FINANCIAL HIGHLIGHTS
 Condensed Statements of Earnings
 (in thousands, except per share data)
 For the Years Ended
 February 29/28,
 1992 1991 Pct. Change
 Revenues:
 Net sales $53,725 $50,878 5.6
 Other (principally
 finance charges) 5,935 5,498 7.9
 Total Revenues 59,660 56,376 5.8
 Costs and expenses:
 Cost of sales
 (including occupancy) 31,122 28,538 9.1
 Selling, general, and
 administrative 20,067 19,682 2.0
 Interest 3,596 3,827 (6.0)
 Bad debt 3,066 2,664 15.1
 Earnings before income taxes 1,809 1,665 8.6
 Provision for income taxes 707 701 0.9
 Net earnings $ 1,102 $ 964 14.3
 Net earnings per share $ .32 $ .28 14.3
 -0- 5/5/92
 /CONTACT: Alan M. Zimmer, President & CEO, 919-350-3111, or James R. Rouse, Treasurer & CFO, 919-350-3116, both of Reeds Jewelers, Inc./
 (REED) CO: Reeds Jewelers, Inc. ST: North Carolina IN: REA SU: ERN


CM -- CH005 -- 6512 05/05/92 11:33 EDT
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