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HIGHLAND SUPERSTORES, INC. REPORTS THIRD-QUARTER RESULTS

 HIGHLAND SUPERSTORES, INC. REPORTS THIRD-QUARTER RESULTS
 PLYMOUTH, Mich., Dec. 13 /PRNewswire/ -- Highland Superstores, Inc.


(NASDAQ: HIGHC) today reported a net loss of $3.5 million ($.19 per share) for the third quarter of fiscal 1991, compared to a net loss of $4.8 million ($.26 per share) for the third quarter of the prior year.
 Net loss for the nine months ended Oct. 31, 1991, which includes a one-time first-quarter charge relating to a change in accounting principle and certain restructuring charges, was $156.9 million ($8.59 per share), compared to a net loss of $13.6 million ($.74 per share) for the comparable prior-year period.
 Net sales and other revenues for the third-quarter and nine-month periods were $115.0 million and $420.8 million, respectively, compared with net sales and other revenues of $193.1 million and $574.9 million, respectively, during the comparable prior-year periods. Sales for the third-quarter and nine-month periods exclude Texas and New England sales beginning June 1991, and Minneapolis/St. Paul and upstate New York sales beginning April 1991, the months in which the company announced that it was exiting these markets.
 Comparable store sales increased 2.3 percent for the quarter and decreased 2.1 percent for the nine months ended Oct. 31, 1991.
 Notwithstanding the increase in comparable store sales for the third quarter, the company's sales and merchandise margins continue to be affected by industrywide weak demand for consumer electronics and appliances and intense competition in the company's markets. These conditions are expected to continue through the remainder of 1991 and in 1992.
 Highland Superstores, Inc., headquartered in Plymouth (Detroit), operates 49 stores in Michigan, Illinois, Ohio and Indiana.
 HIGHLAND SUPERSTORES, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited; dollar amounts in thousands, except per-share data)
 Three Months Ended Nine Months Ended
 Oct. 31 Oct. 31
 1991 1990 1991 1990
 Net sales and other
 revenues $115,048 $193,059 $420,759 $574,864
 Cost and expenses:
 Cost of sales 79,457 133,703 291,462 396,476
 Selling, general and
 administrative
 expenses 37,050 64,005 141,965 191,858
 Restructuring charge --- --- 68,556 ---
 Operating loss (1,459) (4,649) (81,224) (13,470)
 Other income (expense):
 Interest expense (3,047) (3,089) (9,980) (8,257)
 Other income, net 975 190 2,109 555
 (2,072) (2,899) (7,871) (7,702)
 Loss before income taxes
 and cumulative effect
 of change in accounting
 principle (3,531) (7,548) (89,095) (21,172)
 Credit for income taxes --- (2,717) --- (7,622)
 Loss before cumulative
 effect of change in
 accounting principle (3,531) (4,831) (89,095) (13,550)
 Cumulative effect to
 Feb. 1, 1991, of
 change in extended
 warranty contract
 accounting --- --- (67,798) ---
 Net loss ($3,531) ($4,831) ($156,893) ($13,550)
 Weighted average No.
 of shares
 outstanding 18,271,240 18,257,840 18,266,440 18,257,840
 Net loss per share
 amounts:
 Loss before cumulative
 effect of change in
 accounting principle ($.19) ($.26) ($4.88) ($.74)
 Cumulative effect to
 Feb. 1, 1991, of
 change in extended
 warranty contract
 accounting --- --- (3.71) ---
 Net loss ($.19) ($.26) ($8.59) ($.74)
 Pro forma amounts
 assuming the change
 in extended warranty
 contract accounting
 was applied
 retroactively:
 Loss before income
 taxes ($3,531) ($7,503) ($89,095) ($23,857)
 Net loss ($3,531) ($7,503) ($89,095) ($23,857)
 Net loss per share ($.19) ($.41) ($4.88) ($1.31)
 Stores (open at end
 of period) 50 92 50 92
 HIGHLAND SUPERSTORES, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited; dollar amounts in thousands)
 Oct. 31, 1991 Oct. 31, 1990 Jan. 31, 1991
 Assets
 Current assets:
 Cash and equivalents $10,979 $7,703 $47,814
 Accounts receivable,
 trade and other 3,588 8,038 9,847
 Merchandise inventory 125,736 208,752 161,286
 Prepaid expenses 751 6,597 1,133
 Total current assets 141,054 231,090 220,080
 Investments --- 3,657 3,658
 Assets held for sale 4,000 --- ---
 Property and equipment,
 net 74,133 139,644 137,126
 Other assets 686 508 369
 Total assets $219,873 $374,899 $361,233
 Liabilities
 Current liabilities:
 Short-term borrowings --- $43,000 ---
 Accounts payable 27,715 52,178 47,496
 Accrued liabilities and
 other 33,429 52,074 52,527
 Deferred revenue on
 extended warranty
 contracts, current
 portion 30,162 12,298 12,817
 Long-term debt, current
 portion 91,805 4,893 14,079
 Accrual for restructuring 15,552 3,199 1,350
 Total current
 liabilities 198,663 167,642 128,269
 Deferred revenue on
 extended warranty
 contracts, less current
 portion 44,258 --- ---
 Long-term debt, less
 current portion 22,573 92,481 121,513
 Deferred income taxes --- 5,318 196
 Shareholders' equity
 (deficiency) (45,621) 109,458 111,255
 Total liabilities and
 shareholders' equity $219,873 $374,899 $361,233
 -0- 12/13/91
 /CONTACT: Danette Wineberg, vice president, Highland Superstores, 313-451-3532/
 (HIGH) CO: Highland Superstores, Inc. ST: Michigan IN: REA SU: ERN


SB-ML -- DE020 -- 2527 12/13/91 16:44 EST
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Date:Dec 13, 1991
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