WAXMAN INDUSTRIES, INC. REPORTS RESULTS
FOR FIRST QUARTER OF FISCAL 1992
BEDFORD HEIGHTS, Ohio, Nov. 7 /PRNewswire/ -- Waxman Industries, Inc. (NYSE: WAX), a leading supplier to the home repair and remodeling market throughout the United States and Canada, today reported results for the Company's first quarter ended Sept. 30, 1991.
Sales for the quarter totaled $99,751,000, compared with $107,181,000 in the first quarter of the prior year. Sales from U.S. operations increased approximately three percent over the year-ago period, while sales in Canada declined 14.5 percent due to the continuing weak economy there. However, sales in Canada increased approximately nine percent over the immediately preceding fiscal quarter, which was the fourth quarter of fiscal 1991. This improvement in sales is consistent with other indications that the Canadian economy has begun to recover from the recession.
Operating income for the first quarter totaled $7,197,000 versus $9,174,000 in the prior year period, while net income was $625,000, or 7 cents per share, compared with $1,450,000, or 15 cents per share last year. Operating cash flow (operating income before depreciation and amortization) for the first quarter was $9,234,000 versus $11,166,000 in the prior year period. Interest expense declined to $6,115,000 in the current quarter from $6,839,000 in the year-ago period.
Commenting on the Company's performance, Armond Waxman, president and co-chief executive officer, said, "Although our first quarter sales were below the prior year level, due primarily to the recession in Canada, we regard it as a positive sign that sales increased in both the U.S. and Canada compared with the immediately preceding quarter.
"In the U.S., we have started to see the benefits of the newly created Waxman Consumer Group which encompasses all of our U.S. operations, and allows us to market our products in a single coordinated effort. As previously announced, Waxman was selected by Kmart Corporation as its new national vendor of packaged plumbing products for the retail chain's 2,200 stores. We expect shipments of this new program to begin in April 1992. Our Mail Order/Telemarketing Group is continuing to expand its market presence through the opening of new warehouses. During the first quarter, we opened a new mail order warehouse located in El Paso, Texas, and we expect to open four or five additional mail order warehouses during the remainder of fiscal 1992.
"In Canada, sales remain below their pre-recession levels, but the picture there has begun to brighten. For the second straight quarter, sales were up over the trailing quarter. Additionally, the prime interest rate in Canada, which reached 14.75 percent in April, 1990, has fallen steadily and is now at a thirteen-year low of 8.5 percent. In addition to benefitting the economic recovery, the drop in interest rates will favorably impact our interest expense, as our Canadian debt is at variable rates.
"The improving outlook in Canada prompted us to resume our expansion plans for Ideal Plumbing which had been put on hold as a result of the recession. During the first quarter, we opened two new Ideal branches, one in British Columbia and one in Quebec.
"As previously announced, during the first quarter we completed the refinancing of our senior bank indebtedness through a private placement of $50 million of 7-year senior secured notes and 5-year warrants to purchase 1 million shares of common stock. Concurrently with the private placement, we entered into a new 3-year, $24 million bank credit facility for working capital needs, which is currently unused. The refinancing, by extending the maturity of our domestic senior debt, has provided us with greater financial flexibility."
Waxman Industries, Inc. is a leading supplier to the home repair and remodeling market in the United States and Canada. In the U.S., the Company's plumbing, electrical and hardware products are sold primarily to home improvement centers, warehouse home centers, mass merchandisers, hardware stores, lumber yards, wholesalers and, through telemarketing, to more than 30,000 independent retailers, contractors and locksmiths. The Company assembles, packages and markets many of these products under its proprietary trade names. In Canada, the Company is one of the largest suppliers of plumbing and heating products, serving 10,000 customers across Canada, including repair and remodeling contractors, residential and commercial construction contractors and specialty retailers.
WAXMAN INDUSTRIES, INC.
CONSOLIDATED INCOME STATEMENTS
Three Months Ended September 30,
1991 1990 (1)
(In Thousands, Except Per Share Amounts)
Net sales $ 99,751 $107,181
Cost of Sales 69,947 75,719
Gross Profit 29,804 31,462
Operating Expenses 22,607 22,288
Operating Income 7,197 9,174
Interest Expense, net 6,115 6,839
Income Before Income Taxes 1,082 2,335
Income Taxes 457 885
Net Income $ 625 $ 1,450
Earnings Per Share:
Primary $ .07 $ .15
Fully diluted $ .07 $ .15
Average Shares Outstanding:
Primary 9,459 9,861
Fully duluted 9,478 10,154
(1) Certain prior year amounts have been reclassified to conform with the Sept. 30, 1991 presentation.
/CONTACT: Armond Waxman or Jerome Jacques of Waxman Industries, Inc., 216-439-1830; or Patrick Gallagher of Edward Howard & Co., 216-781-2400, for Waxman Industries, Inc./
(WAX) CO: Waxman Industries, Inc. ST: Ohio IN: SU: ERN KK -- CL021 -- 2322 11/07/91 14:54 EST