Printer Friendly

AILEEN, INC. REPORTS FISCAL 1993 RESULTS AND LOAN NEGOTIATIONS

 NEW YORK, Jan. 7 /PRNewswire/ -- Aileen, Inc. (NYSE: AEE), a manufacturer and retailer of women's apparel which operates 148 retail outlets in 40 states, today announced its results of operations for the fiscal year and quarter ended Oct. 30, 1993. Such results, on a comparative basis with the prior year's results, are as follows:
 AILEEN, INC.
 STATEMENT OF INCOME
 (Audited) (Audited)
 52 Weeks Ended 52 Weeks Ended
 Oct. 30, 1993 Oct. 31, 1992
 Net Retail Sales $60,346,000 $61,563,000
 Net Other Sales 489,000 2,558,000
 Total Net Sales $60,835,000 $64,121,000
 Net Income (Loss) ($4,751,000) $1,014,000
 Net Income (Loss)
 Per Share ($.89) $.19
 (Unaudited) (Unaudited)
 13 Weeks Ended 13 Weeks Ended
 Oct. 30, 1993 Oct. 31, 1992
 Net Retail Sales $14,219,000 $15,936,000
 Net Other Sales 67,000 320,000
 Total Net Sales $14,286,000 $16,256,000
 Net (Loss) ($1,184,000) ($364,000)
 Net (Loss) Per Share ($.22) ($.07)
 The net losses for both the 52-week and the 13-week periods ended Oct. 30, 1993 reflect the inclusion of $919,000 of income in the form of business interruption insurance proceeds, which were received by the Company in connection with a previously reported fire at one of its sewing plants; an additional $1,551,000 of such insurance proceeds will be reflected in the Company's results of operations for the fiscal quarter ending Jan. 29, 1994.
 Comparable store sales statistics, reflecting the sales of the 102 stores open throughout both the fiscal year ended Oct. 30, 1993 and the fiscal year ended Oct. 31, 1992, declined by approximately 13% from 1992 to 1993. Comparable store sales statistics for the fourth fiscal quarter, reflecting the sales of the 117 stores open throughout such quarters in both 1992 and 1993, show a drop of approximately 19%. The Company had 144 retail stores open at the end of fiscal 1993, compared to 131 stores open at the end of fiscal 1992. During fiscal 1993, the Company opened 22 new stores and closed nine stores.
 In announcing the year-end and fourth-quarter results for fiscal 1993, the Company also reported that it has yet to reach an agreement with its institutional lender, NationsBank of Virginia (the Bank), on a restructure of the Bank's $4 million revolving credit loan, which is unsecured, and $744,000 term loan, which is secured by equipment having a net book value of approximately $1,300,000. As previously reported, the Bank waived certain financial covenant defaults which existed as of July 31, 1993 at the end of the Company's third fiscal quarter. Such waiver was subject to a mutual agreement being reached by Oct. 31, 1993 on the modification of the financial covenants and the delivery of collateral to the Bank as security for the revolving credit loan. When that date passed without such a mutual agreement, the Company and the Bank entered into an agreement providing for the current series of restructuring negotiations. While the Company is seeking substitute and additional financing, the Bank has requested that collateral be provided for the unsecured loan (which has ceased to revolve), but the Company thus far has declined to provide such collateral in the absence of additional funding from the Bank or the obtaining of a new credit facility. Discussions with the Bank concerning the possibility of the delivery of such collateral are continuing. Despite the existence of covenant defaults and the termination of the revolving credit line, the Company has made all payments required to be made through Dec. 31, 1993 on the debt of the Company to the Bank.
 As a result of the reduction in the revolving credit line from $6 million to $4 million following the end of the third fiscal quarter and significant sales declines in the fourth quarter of fiscal 1993 and the first quarter of fiscal 1994, the Company is experiencing a serious cash shortfall, with a substantial portion of past due trade payables being at least 60 days late. Rent payments have also been delayed, though such delays have generally been applicable to the Company's underperforming retail store units. Unlike most retailers, the Company, as a vertically integrated manufacturer producing all the garments sold in its stores, is not dependent on its vendors for finished goods; however, the Company does rely on its vendors for a continuing flow of the raw materials needed to keep its garment production on schedule.
 The Statement of Income information set forth above has been prepared upon the assumption that the Company will continue as a going concern. In view of the cash flow problems which the Company is encountering and the present uncertainty regarding its prospects for restructuring its existing debt and/or obtaining new credit facilities, the Company's independent auditors have advised the Company that, unless it is able to resolve these issues prior to the finalization of the audited fiscal 1993 financial statements, the accountants' report on such statements will likely include a "going concern" qualification. Without a satisfactory new credit facility or other financial accommodations from the Bank and the Company's vendors in the near term (there being no assurance that the Company will be able to so obtain such new financing or accommodations), the Company may be forced to seek to reorganize under the federal bankruptcy laws.
 -0- 1/7/94
 /CONTACT: Steve Delman of Aileen, 212-398-9770/
 (AEE)


CO: Aileen, Inc. ST: New York IN: REA SU: ERN

JG-PS -- NY041 -- 0231 01/07/94 15:25 EST
COPYRIGHT 1994 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1994 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jan 7, 1994
Words:921
Previous Article:CMS ENERGY ANNOUNCES LARGEST POWER PLANT FINANCING IN ARGENTINE
Next Article:TGI FRIDAY'S INC. NAMES NEW PRESIDENT
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters