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CARTER HAWLEY HALE REPORTS SECOND QUARTER RESULTS, SPECIFIES PROGRESS AND PLANS IN TURNAROUND; ANNOUNCES ONE-TIME CHARGE AND RESULTING SAVINGS

 LOS ANGELES, Aug. 25 /PRNewswire/ -- Carter Hawley Hale Stores Inc. (NYSE: CHH) today reported second quarter total sales of $474.9 million, a decrease of 1.3 percent from $481.3 million recorded during the same period a year ago. The company's net loss for the quarter, which included a $25.0 million charge for non-recurring costs, was $42.5 million or ($1.12) per share, compared to a net loss of $14.6 million in the year-ago quarter.
 Comparable store sales increased 1.3 percent over the second quarter last year.
 The $25.0 million one-time charge is a major step associated with the company's recently completed strategic plan. Implementation of the plan has already begun and is expected to result in annualized cost savings of $40 million. These cost savings are entirely attributable to the elimination of redundant and low value-added functions within the support and administrative areas of the company. The charge is comprised of severance and other benefit costs to be incurred from staff reductions, related consulting fees and the costs of implementing other efficiencies under the plan.
 In order to continue to reposition the company's merchandise offerings, operating profit was further reduced by the decision to take $6 million of inventory clearance markdowns, which were over and above the markdowns taken in the normal course of business. CHH expects to record additional markdowns during the fall season to complete this inventory repositioning. Excluding the special items, operating profit would have been $10.2 million in the quarter, down slightly from last year's $12.2 million.
 David L. Dworkin, president and chief executive officer, said, "We took numerous steps in the second quarter which demonstrate our commitment to change the way we do business in order to restore profitability. Results do not yet reflect critical changes we have already accomplished or have concrete plans to achieve."
 Dworkin continued, "We have identified the most serious problem areas and are improving them, within the context of reinventing CHH. Having just completed my first full quarter at the helm, I'm pleased with the significant progress attained already in addressing the issues of management quality, merchandise assortment, space reallocation and store remodeling. Toward these ends, we have involved people from all levels of the company in determining the optimal direction and value of all of our business activities. Since completion of this bottoms-up study, we have:
 -- Streamlined our organizational structure, bringing senior
 management closer to our customers;
 -- Conducted market research to better serve and understand our
 customers, and to pinpoint their preferences on a highly
 segmented basis. We have also begun to change the image of our
 stores to meet the criteria of these customers;
 -- Developed and implemented far more market-specific advertising
 through an approach which focuses on each market segment and
 ethnic group;
 -- Embarked on an aggressive store remodeling program initially
 focused on our most profitable stores and utilizing a `quick-
 win' low-cost renovation strategy. This includes extensive
 refixturing to remedy a basic lack of appropriate fixture
 capacity;
 -- Assembled a senior management team that is highly respected in
 the industry.
 "We are beginning to see some dramatic success stories as our strategies bear fruit, and believe these serve as indicators for the future. These include:
 -- Successfully initiated a value-pricing strategy in our menswear
 business and will expand this program to all merchandise
 offerings by the fourth quarter. For example, value pricing has
 increased sales of a men's dress shirt from between 200 and 300
 per week to approximately 2,000 per week.
 -- Demonstrated the effectiveness of our remodeling strategy in the
 Santa Anita men's store and the `quick-win' strategy in the San
 Francisco home store. Through July the Santa Anita men's store
 has generated sales gains of 34 percent and the San Francisco
 home store, since its completion, has generated a 19 percent
 sales increase.
 -- Expanded our communications with significant ethnic groups
 through radio, television and print advertising. We are now
 producing Spanish-language radio, television and print ads and
 testing Chinese and Korean broadcast ads."
 Concluding, Dworkin said, "We are building solid underpinnings to support our principal objective of attaining high levels of productivity and profitability. It will take some more time as we continue to address our problems, but our enormous potential becomes more visible every day."
 Carter Hawley Hale Stores Inc. is one of the leading operators of full-line department stores in the western United States, with annual sales in excess of $2.1 billion. It operates 83 department stores under the names of The Broadway, Emporium and Weinstocks.
 CARTER HAWLEY HALE STORES INC.
 Consolidated Statement of Earnings
 (In thousands)
 (Unaudited)
 13 Weeks Ended 26 Weeks Ended
 July 31, Aug. 1, July 31, Aug. 1,
 1993 1992 1993 1992
 Sales $474,935 $481,342 $917,415 $914,969
 Finance charge revenue 19,865 20,006 41,093 42,564
 Cost of goods sold,
 including occupancy
 and buying costs 360,343 357,212 689,797 677,024
 Selling, general and
 administrative
 expenses 130,237 131,887 259,450 262,634
 Charge for non-recurring
 costs 25,000 --- 25,000 ---
 Earnings (loss) from
 operations before
 interest expense and
 reorganization costs (20,780) 12,249 (15,739) 17,875
 Interest expense, net 21,690 22,531 43,990 44,936
 Loss from operations
 before reorganization
 costs (42,470) (10,282) (59,729) (27,061)
 Reorganization costs --- 4,320 --- 7,912
 Pretax loss (42,470) (14,602) (59,729) (34,973)
 Income tax benefit --- --- 6,900 ---
 Loss before cumulative
 effect of change in
 accounting (42,470) (14,602) (52,829) (34,973)
 Cumulative effect of
 change in accounting for
 income taxes --- --- --- 18,832
 Net loss ($42,470) ($14,602) ($52,829) ($16,141)
 Loss per common share ($1.12) (a) ($1.44) (a)
 Average shares 38,015 --- 36,608 ---
 (a) Per share data for periods in 1992 have been omitted as these amounts do not reflect the current capital structure.
 CARTER HAWLEY HALE STORES INC.
 Consolidated Balance Sheet
 (In thousands)
 (Unaudited)
 July 31, Jan. 30, Aug. 1,
 1993 1993 1992
 Assets
 Current assets
 Cash $14,966 $18,617 $37,059
 Accounts receivable, net 484,525 579,794 512,163
 Merchandise inventories 405,768 467,709 349,625
 Other current assets 22,231 12,913 27,359
 Total 927,490 1,079,033 926,206
 Property and equipment, net 785,140 788,129 499,918
 Other assets 41,182 45,740 94,966
 Total $1,753,812 $1,912,902 $1,521,090
 Liabilities and Shareholders'
 Equity
 Current liabilities
 Notes payable --- $52,315 $67,000
 Current installments 3,195 7,070 2,866
 Accounts payable 116,920 172,159 113,881
 Accrued expenses 121,351 142,973 216,926
 Current income taxes 2,923 3,038 10,889
 Total 244,389 377,555 411,562
 Liabilities subject to settlement
 under reorganization proceedings --- --- 593,183
 Receivables-based financing 362,035 467,577 400,630
 Other long-term debt 511,577 515,658 453,174
 Capital lease obligations 46,078 47,558 53,805
 Other liabilities 114,649 117,343 133,353
 Deferred income taxes 5,550 12,450 ---
 Shareholders' equity
 Preferred stock,
 $.01 par value 11 11 ---
 Common stock,
 $.01 par value 467 352 303
 Other paid-in capital 499,165 351,678 643,194
 Accumulated deficit (30,109) 22,720 (1,168,114)
 Total 469,534 374,761 (524,617)
 Total $1,753,812 $1,912,902 $1,521,090
 CARTER HAWLEY HALE STORES INC.
 Consolidated Statement of Cash Flows
 (In thousands)
 (Unaudited)
 26 Weeks Ended
 July 31, 1993 Aug. 1, 1992
 Operating activities
 Loss from operations ($52,829) ($34,973)
 Adjustments to reconcile loss from
 operations to net operating cash flows
 Depreciation and amortization 16,950 20,475
 Deferred taxes (6,900) ---
 Changes in operating assets and liabilities
 Customer receivables, net 94,146 100,325
 Merchandise inventories 61,941 34,821
 Accounts payable and
 accrued liabilities (67,275) (50,075)
 Other, net (10,502) (4,537)
 Net cash provided by operating activities 35,531 66,036
 Investing activities
 Proceeds from asset sales 5,600 ---
 Purchases of property and equipment (19,204) (6,419)
 Net cash used by investing activities (13,604) (6,419)
 Financing activities
 Postemergence debt activity
 Net change in financing under
 receivables-based facility (105,542) ---
 Net change in financing under
 working capital facility (52,315) ---
 Postpetition debt activity
 Net change in financing under
 receivables-based facility --- (88,624)
 Net change in financing under
 working capital facility --- 30,000
 Retirements of long-term debt and
 capital lease obligations (15,323) (1,450)
 Issuances of common stock 147,602 ---
 Net cash used by financing activities (25,578) (60,074)
 Net decrease in cash (3,651) (457)
 Cash at the beginning of the period 18,617 37,516
 Cash at the end of the period $14,966 $37,059
 -0- 8/25/93
 /CONTACT: Davis Weinstock or Mike Reitbrock of Clark & Weinstock, 212-953-2550/
 (CHH)


CO: Carter Hawley Hale Stores Inc. ST: California IN: REA SU: ERN

MF-JL -- LA013 -- 5696 08/25/93 08:32 EDT
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Date:Aug 25, 1993
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