Styling Technology Reports 1998 Fourth Quarter and Fiscal Year Results; Company Also Announces New Generation of Biogenol Brand.SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Feb. 25, 1999--Styling Technology Corp. (Nasdaq:STYL STYL Speak to You Later STYL Same to You, Loser ) Thursday reported financial results for the quarter and year ended Dec. 31, 1998. For the fourth quarter, 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 totaled $28.5 million, up 128% from $12.5 million in the year-ago fourth quarter. Net income, before centralization cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. and reengineering costs on a net of tax basis, totaled $1.2 million, or $0.29 per 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. share, for the quarter ended Dec. 31, 1998, which represents a decrease of 9% compared with net income, before extraordinary item, of $1.3 million, or $0.31 per diluted share, for the fourth quarter of 1997. Net income after the centralization and reengineering costs equaled $926,000, or $0.23 per diluted share. 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.
For the year ended Dec. 31, 1998, the company had net sales of $90.4 million, up 137% from $38.1 million in the year ended Dec. 31, 1997. Net income, before centralization and reengineering costs on a net of tax basis and before the extraordinary item, totaled $5.4 million, or $1.26 per diluted share, for the year ended Dec. 31, 1998. Net income, before the extraordinary item for the year ended Dec. 31, 1998, was $5.2 million, or $1.20 per diluted share, compared with $4.2 million, or $1.02 per diluted share, in 1997. Net income after the extraordinary item for the twelve months ended Dec. 31, 1998 was $4.1 million, or $0.95 per diluted share, compared with net income after the extraordinary item of $2.8 million, or $0.69 per diluted share, for the corresponding twelve months of 1997. EBITDA for the year ended Dec. 31, 1998 (before centralization and reengineering costs) was $23.5 million, an increase of 114% from $11.0 million for the corresponding period last year. The one-time, noncash charge Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. incurred during the second quarter of approximately $1.1 million related to the write-off of unamortized financing costs associated with the company's previous credit facility. "We are very pleased with the results of our second full year as a public company," said Sam Leopold, Styling Technology's president, chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "During the fourth quarter of 1998, we concentrated on the centralization and integration of our business in our new Scottsdale facility, positioning the company for strong internal growth. "Our exclusive hair care lines, ABBA and Framesi, continued to deliver strong operating results and provide us with a strong base in the hair care category from which to develop exciting and creative new products." Leopold continued: "The centralization and reengineering project announced earlier in the year is proceeding according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. our internal plans. As the project progressed during the fourth quarter, our main focus was continuing to exceed our customers' expectations in both product and service with no disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. to their businesses. "The project will continue throughout the first and second quarters of 1999, and we will continue to put the highest priority on seamless service to each customer." Company Announces New Generation of Technologically Advanced Hair Care Products The company expects to leverage its investment in its ABBA and Framesi brands with a high level of new product activity in the spring and summer. The company will be introducing a new generation of its successful Framesi(R) Biogenol(R) line of hair care products featuring new, technologically advanced product formulations to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. market demand for a superior home hair care system for salon-colored hair. The company expects this introduction to have an immediate and continued positive impact on its hair care sales. In addition, the company plans to introduce two new hair care brands, in addition to its ABBA and Framesi brands, in the spring and summer of 1999. "Styling Technology's driving goal is to become the one-stop shop One-Stop Shop A company or a location that offers a multitude of services to a client or a customer. The idea is to provide convenient and efficient service and also to create the opportunity for the company to sell more products to clients and customers. for professional salon Salon, annual exhibition of art works chosen by jury and presented by the French Academy since 1737; it was originally held in the Salon d'Apollon of the Louvre. By the mid-19th cent. the Salon had become an expression of conservative, established tastes in art. products," said Leopold. "Our new brand introductions validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data the company's ability to leverage its growing stature stature /sta·ture/ (stach´ur) the height or tallness of a person standing.stat´ural stat·ure n. The height of a person. stature the height of an animal in the standing position. in the industry to create exciting new products for our customers. The innovations in our Biogenol product line demonstrate our continued commitment to the brands we have acquired." Styling Technology Corp. is a leading developer, producer and marketer of a wide array of professional salon products, addressing all salon product categories, including hair care, nail care, and skin and body care products, as well as salon appliances and sundries sun·dries pl.n. Articles too small or numerous to be specified; miscellaneous items. [From sundry. . Through strategic acquisitions, the company has acquired well-recognized brand names, a strong distribution network, established marketing and salon industry education programs, and significant production and sourcing capabilities. The company sells its products primarily to salon products and tanning tanning, process by which skins and hides are converted into leather. Vegetable tanning, a method requiring more than a month even with modern machinery and tanning liquors, employs tannin; its use is shown in Egyptian tomb paintings dating from 3000 B.C. supply distributors, beauty supply outlets and chain salons. For information on Styling Technology Corp. via facsimile at no cost call 800/PRO-INFO and dial client code STYL. The statements in this release regarding plans for the business centralization and integration, acquisitions, engineering costs, capital expenditures and potential improvements in operating results 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. within the meaning 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. Although Styling Technology believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from Styling Technology's expectations include the company's ability to acquire additional businesses and to integrate the operations of such acquisitions, the ability to enhance operating efficiencies, industry conditions, demand for its products and other risks detailed from time to time in Styling Technology's SEC reports, including its Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. Report for the fiscal year ended Dec. 31, 1997. -0-
Styling Technology Corp.
Operating Highlights
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31,
1998 1997 1998 1997
Net Sales $ 28,535 $ 12,523 $ 90,373 $ 38,108
Cost of Sales 12,192 5,409 39,222 16,756
Gross Margin 16,343 7,114 51,151 21,352
Selling, General
& Administrative 11,116 3,896 32,715 12,201
Centralization and
Reengineering Costs 422 -- 422 --
Total Selling, General
& Administrative 11,538 3,896 33,137 12,201
Income from Operations 4,805 3,218 18,014 9,151
Interest Expense and
Other, Net 3,469 896 9,206 1,847
Income before
Extraordinary Item
and Income Taxes 1,336 2,322 8,808 7,304
Provision for
Income Taxes 410 1,028 3,635 3,097
Income before
Extraordinary Item 926 1,294 5,173 4,207
Extraordinary Item,
Net of Taxes -- 1,377 1,091 1,377
Net Income $ 926 $ (83) $ 4,082 $ 2,830
Earnings per Diluted Share
before Centralization and
Reengineering Costs and
Extraordinary Item
(Net of Taxes) $ 0.29 $ 0.31 $ 1.26 $ 1.02
Earnings per Diluted Share
before Extraordinary Item 0.23 0.31 1.20 1.02
Earnings per Diluted Share
after Extraordinary Item 0.23 (0.02) 0.95 0.69
Weighted Average Shares
Outstanding 4,114 4,237 4,313 4,113
EBITDA(a) before
Centralization and
Reengineering Costs 7,164 3,902 23,539 10,983
EBITDA after
Centralization and
Reengineering Costs $ 6,742 $ 3,902 $ 23,117 $ 10,983
(a) Earnings before interest, taxes, depreciation, and amortization is
a supplemental financial measure used by certain investors to evaluate
operating performance.
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