AMES PROJECTS FOURTH-QUARTER EBIT PROFIT
AMES PROJECTS FOURTH-QUARTER EBIT PROFIT ROCKY HILL, Conn., Nov. 13 /PRNewswire/ -- Ames Department Stores,
Inc. (NYSE: ADD) said today that it will file a Form 8-K with the Securities and Exchange Commission that forecasts fourth-quarter earnings before interest, taxes, restructuring and Chapter 11 expense (EBIT) of between $2 million and $10 million compared with an EBIT loss of $5 million in the same period last year.
The fourth-quarter forecast does not include results from 77 stores that will close in early 1992. These stores' results will be part of a third-quarter restructuring charge, however. For the full year ending Jan. 25, 1992, Ames forecasts an EBIT loss of between $82 million and $90 million vs. an EBIT loss of $300 million for the year ending Jan. 26, 1991. Ames cautions that information based on projections should not be relied upon. Stephen L. Pistner, Ames' chairman and chief executive officer, said, "The anticipated reduction in our operating loss from last year of more than $200 million reflects the advances we are making in revitalizing Ames. We are continuing to make progress toward our primary goal of emerging from Chapter 11 as a strong, viable and competitive company. "Our cash position remains strong. This year we did not begin drawing on our $250 million debtor-in-possession credit facility to finance our inventory until the beginning of the fourth quarter; last year we began borrowing in early October. We anticipate full repayment of our borrowings by mid-December." Pistner said, "We have continued to take early action to further reduce our operating expenses both through selective store closings and cost-cutting measures. We have already achieved a substantial improvement in our gross margin rate. We expect to finish the year with a 20 percent year-to-year improvement in gross margin, to 26.1 percent, and a reduction in our inventory shrinkage of more than one-third. We have also exceeded our cost-reduction expectations by $5 million." Ames said its results for the third quarter ended Oct. 26 will be reported Dec. 10. As previously reported, Ames expects to record a restructuring charge in the third quarter to reflect the announced closing of 77 stores in the first quarter of next year. After the stores are closed, Ames will operate 371 stores in 15 Northeastern states. -0- 11/13/91 /CONTACT: Doug Ewing, 203-257-2600, or Bill Roberts, 203-257-2666, both of Ames; or Andrea Priest of Adams & Rinehart, 212-557-0100, for Ames/ (ADD) CO: Ames Department Stores Inc. ST: Connecticut IN: REA SU: FC -- NY075 -- 4048 11/13/91 14:58 EST
|Printer friendly Cite/link Email Feedback|
|Date:||Nov 13, 1991|
|Previous Article:||RITTENHOUSE CAPITAL ISSUES ANNOUNCEMENT|
|Next Article:||AT&T UNIVERSAL CARD ANNOUNCES INTEREST RATE DECREASE|