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BEN FRANKLIN RETAIL STORES REPORTS FISCAL THIRD QUARTER & NINE MONTHS RESULTS; ANNOUNCES RESTRUCTURING PROGRAM FOR ITS WHOLESALING BUSINESS

 CAROL STREAM, Ill., Jan. 13 /PRNewswire/ -- Ben Franklin Retail Stores, Inc. (NASDAQ: BFRS) today reported a net loss of $3.4 million, or $.62 per share, for the third quarter of fiscal 1994. This loss is the result of a special charge of $3.4 million on an after-tax basis, or $.62 per share,
related primarily to a re-engineering of its wholesale operations. For the fiscal 1993 third quarter, net income was $830,000, or $.15 per share, which included an extraordinary item of $256,000 or $.05 per share. There was no extraordinary item in the third quarter of fiscal 1994.
 Net sales for the fiscal third quarter ended Dec. 31, 1993, were $86.1 million compared with $89.5 million in the prior year. Operating income was $615,000, prior to the $5.3 million restructuring charge, versus $1.1 million in the comparable period of fiscal 1993.
 "Our re-engineering of our wholesaling business is a direct and proactive approach to address the highly competitive business climate being experienced by our franchised variety stores. However, the company will continue with our growth plan in the crafts industry. The restructuring charge of $5.3 million covers costs associated with significant work-force and inventory reductions, as well as restructuring expenses for certain facilities," John Menzer, president and chief operating officer, said.
 "As the re-engineering process is completed, we anticipate realizing significant benefits from improved productivity and lower amounts of capital tied up in slow moving inventory. These benefits should translate into future savings of over $1.5 million pre-tax annually," Menzer added, "and substantially improve our competitive position and financial return from our wholesale operations."
 "Importantly, the company is well positioned to continue to take advantage of the substantial opportunities that exist in the profitable and growing crafts segments of our business," Menzer said. "Our balance sheet remains sound with over $57.7 million in stockholders' equity at quarter-end, and we have sufficient resources and operating cash flow to continue with our growth plans in the crafts industry."
 During the first three quarters of the current fiscal year, the company has opened 18 franchised Ben Franklin Crafts Superstores and anticipates opening an additional 11 superstores during the remainder of fiscal 1994, including seven franchised and four corporate superstores.
 Ben Franklin has signed agreements for the opening of 117 franchised craft superstores over the next five years, including the 41 stores opened to date. "Our company would expect the demand for craft superstore franchises to continue to grow, based on the initial success of our stores and the availability of additional under-retailed markets," Menzer said.
 First Nine Months Results:
 Net income for the first nine months was $5.2 million, or $.94 per share, which included an $8.0 million gain, or $1.44 per share, related to the adoption of FASB No. 109, "Accounting for Income Taxes," and the above-mentioned restructuring charge of $3.4 million on an after-tax basis, or $.62 per share. This compares with $1.9 million, or $.34 per share in fiscal 1993. Included in net income in the first nine months of fiscal 1993, was an extraordinary gain for the utilization of net operating loss carryforwards of $503,000, or $.09 per share.
 Net sales decreased to $256.8 million from $263.7 million the previous year. Operating income was $1.8 million, prior to the $5.3 million restructuring charge, compared with $2.6 million in the first nine months of fiscal 1993.
 Ben Franklin Retail Stores, Inc. is franchisor to 270 craft stores and 611 variety stores in 47 states. In addition, the company also owns and operates 11 Ben Franklin Crafts Superstores.
 BEN FRANKLIN RETAIL STORES, INC. AND SUBSIDIARIES
 Condensed Statements Of Consolidated Operations (Unaudited)
 And Summarized Balance Sheet Data (Unaudited)
 (In Thousands Except Per Share Amounts)
 Periods Ended Third Quarter Nine Months
 Dec. 31, 1993 1992 1993 1992
 Income Statement Data:
 Net sales $86,058 $89,496 $256,766 $263,663
 Operating costs
 Cost of sales, buying
 and occupancy 78,463 81,959 235,793 243,183
 General and administrative
 expenses 6,325 5,841 17,268 16,155
 Restructuring charge 5,254 -- 5,254 --
 Depreciation and
 amortization 655 614 1,861 1,768
 Total operating expenses 90,697 88,414 260,196 261,106
 Operating income (4,639) 1,082 (3,430) 2,557
 Interest expense - net 463 440 944 981
 Other expense (income) 171 (241) (62) (471)
 Income (loss) before income
 taxes, extraordinary item
 and cumulative effect
 of change in accounting
 principle (5,273) 883 (4,312) 2,047
 Income tax (benefit)
 expense (1,827) 309 (1,483) 658
 Income (loss) before
 extraordinary item and
 cumulative effect of
 change in accounting
 principle (3,446) 574 (2,829) 1,389
 Extraordinary item -
 utilization of net
 operating loss
 carryforward -- 256 -- 503
 Cumulative effect of
 change in accounting
 principle -- -- 8,042 --
 Net income (loss) $ (3,446) $ 830 $ 5,213 $ 1,892
 Primary earnings per share:
 Income (loss) before
 extraordinary item
 and cumulative effect
 of change in accounting
 principle $ (.62) $ .10 $ (.50) $ .25
 Extraordinary item -
 utilization of net
 operating loss
 carryforward -- .05 -- .09
 Cumulative effect of
 change in accounting
 principle -- -- 1.44 --
 Net income (loss) $ (.62) $ .15 $ .94 $ .34
 Average common shares
 outstanding 5,560 5,593 5,605 5,531
 Fully diluted earnings
 per share:
 Income (loss) before
 extraordinary item and
 cumulative effect of
 change in accounting
 principle $ (.33) $ N/A $ (.24) $ N/A
 Cumulative effect of
 change in accounting
 principle -- N/A .97 N/A
 Net income (loss) (.33) N/A .73 N/A
 Average common shares
 outstanding 9,270 N/A 8,256 N/A
 Summarized Balance Sheet Data:
 Periods Ended Dec. 31, 1993 March 31, 1993
 Total assets $163,100 $121,300
 Working capital 68,500 54,600
 Long-term obligations
 excluding current portion 36,500 4,700
 Stockholders' equity 57,700 52,500
 -0- 1/13/94
 /CONTACT: David A. Brainard, senior vice president and chief financial officer of Ben Franklin Retail Stores, Inc., 708-462-6345/
 (BFRS)


CO: Ben Franklin Retail Stores, Inc. ST: Illinois IN: REA HOU SU: ERN

LD -- NY006 -- 1718 01/13/94 09:35 EST
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Date:Jan 13, 1994
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