Cole National Third Quarter EPS Increases 500 Percent On More Shares Outstanding
Year To Date EPS Up 74 Percent
CLEVELAND, Nov. 26 /PRNewswire/ -- Cole National Corporation (NYSE: CNJ), a leading vision care and personalization retailer, reported for the third quarter ended November 2, 1996, a 500% increase in EPS to $.1O on 15% more shares outstanding. Total sales for the quarter increased to $146,702,000 and comparable store sales rose 3.3% on top of last year's 7.1% increase.
Brian Smith, President, said "results were driven by a 0.6% improvement in gross margin and lower interest expense. Gross margin benefited from lower product costs in both the optical and gift businesses, as well as from improved optical lab productivity and the sale of additional personalization in the gift business."
Nine month sales rose to $443,057,000 with a comparable store sales increase of 6.3% on top of last year's 5.0% increase. Earnings per share before an extraordinary charge were $.66, an increase of 74% over last year.
Mr. Smith stated, "I am encouraged about the upcoming holiday season because of the sales performance of new gift merchandise, such as our exclusive seasonal blanket throw, Arctic plush items, gift baskets and the good start for November's sales in our gift business."
The Company completed its acquisition of Pearle Inc. on November 15, 1996. Jeffrey A. Cole, Chairman, said "the acquisition of Pearle is the most significant event in the Company's fifty-two year history. Our plans for Pearle will focus on improving the profitability of Company-owned stores and reducing the overlap in administrative costs. There is an opportunity to increase sales and gross margin in these stores by applying our selling techniques, which emphasize lenses and coatings that improve a customer's vision, along with introducing the sale of eyeglass warranties. We will be evaluating the in-store lab production of eyeglasses used in Pearle's 342 Company-owned stores. Our preliminary view is that lower volume stores can be converted to centralized lab production, providing an opportunity to reduce costs. We expect that the offering of our existing managed vision care programs to Pearle will have a positive effect on sales for both Company stores and franchised locations. Also, the addition of the Pearle brand name will make Cole's managed vision care network more attractive to managed vision care buyers as well as participants."
The Company will be evaluating Pearle's operations and its integration into Cole. While this evaluation is in process and not near completion, the expectation is that a charge for business integration and consolidation costs is likely to be taken in the fourth quarter of 1996.
On November 6, 1996, the Company acquired 73 Sears Optical locations and two freestanding stores in Canada. The Company expects that these stores will add approximately $15 million to full year sales. During the quarter the Company opened 11 personalization superstores and 10 freestanding Sears Optical units, bringing the total number of stores in these formats to 80 and 75, respectively.
Cole National, including Pearle franchisees, has more than 3,000 locations in the United States, Canada, Puerto Rico and Virgin Islands, as well as a 20% stake in Pearle Trust BV, which has 183 stores in the Netherlands and Belgium.
The expectations, beliefs and other non-historical statements contained in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially due to a variety of factors that can adversely affect the Company, such as the integration of Pearle's operations, the ability to select and stock merchandise attractive to customers, general economic cycles affecting consumer spending, weather factors affecting retail operations, its quality controls in optical manufacturing and engraving, operating factors affecting customer satisfaction, the Company's relationships with its host stores and franchisees, the mix of goods sold, pricing and other competitive factors, and the seasonality of the Company's business.
COLE NATIONAL CORPORATION Results of Operations (Unaudited) 13 Weeks Ended 39 Weeks Ended Nov. 2, Oct. 28, Nov. 2, Oct. 28, 1996 1995 1996 1995 Net sales $146,702,000 $138,646,000 $443,057,000 $401,999,000
Costs and expenses:
Cost of goods sold 44,773,000 43,181,000 136,673,000 125,246,000 Operating expenses 91,024,000 85,900,000 266,175,000 242,233,000
amortization 4,420,000 3,885,000 12,949,000 11,563,000
Total costs and
expenses 140,217,000 132,966,000 415,797,000 379,042,000 Income from operations 6,485,000 5,680,000 27,260,000 22,957,000 Interest expense, net 4,390,000 5,272,000 14,171,000 15,872,000
Income before income
extraordinary item 2,095,000 408,000 13,089,000 7,085,000 Income tax expense 922,000 179,000 5,759,000 3,117,000
extraordinary item 1,173,000 229,000 7,330,000 3,968,000
Extraordinary loss on
of debt -- -- (682,000) -- Net income $1,173,000 $229,000 $6,648,000 $3,968,000
Earnings per share:
extraordinary item $0.10 $0.02 $0.66 $0.38 Extraordinary loss -- -- (.06) -- Net income $0.10 $0.02 $0.60 $0.38 Weighted average shares 11,943,949 10,420,063 11,127,211 10,411,274 Balance Sheet (Unaudited) Nov. 2, Oct. 28, Assets 1996 1995
Cash and investments $29,380,000 $8,988,000 Inventories 103,778,000 100,047,000 Deferred income tax benefits 10,675,000 13,301,000 Other current assets 28,111,000 25,534,000 Total current assets 171,944,000 147,870,000 Property and equipment, net 72,376,000 62,992,000 Other assets, net 87,794,000 86,832,000 Total assets $332,114,000 $297,694,000
Liabilities and Stockholders' Equity
Current portion of long-term debt $1,117,000 $534,000 Accounts payable 40,058,000 37,714,000 Accrued liabilities 66,559,000 62,317,000 Total current liabilities 107,734,000 100,565,000 Long-term debt, net of discount 168,412,000 186,174,000 Deferred income taxes and other 5,545,000 3,631,000 Stockholders' equity 50,423,000 7,324,000
Total liabilities and
stockholders' equity $332,114,000 $297,694,000
SOURCE Cole National Corporation
/CONTACT: Joseph Gaglioti of Cole National Corporation, 216-449-4100/
CO: Cole National Corporation ST: Ohio IN: REA SU: ERN
TC-BG -- CLTU004 -- 4199 11/26/96 08:46 EST http://www.prnewswire.com
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|Date:||Nov 26, 1996|
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