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REVCO REPORTS INCREASED SALES AND OPERATING PROFIT FOR THIRD QUARTER

 TWINSBURG, Ohio, March 10 /PRNewswire/ -- Revco D.S., Inc. (NYSE: RXR) today reported results for the third quarter of its 1993 fiscal year.
 For the quarter ended Feb. 6, sales advanced to $552.4 million, a 5.7 percent increase from last year's third quarter sales of $522.9 million. Comparable store sales increased 4.6 percent for the quarter. Operating profit rose to $24.6 million, a 36.4 percent increase from last year's $18.0 million. Earnings before interest, income taxes, depreciation, amortization and reorganization expenses ("EBITDA") were $35.4 million, an improvement of 18.8 percent over the $29.8 million reported for last year's third quarter.
 Net income for the quarter was $4.3 million, $.11 per share, compared with last year's third quarter net income of $16.2 million. The same quarter last year included one-time favorable income adjustments totalling $13.9 million, representing a refund of $9.5 million plus associated interest of $4.4 million on the finalization of a tax settlement with the Internal Revenue Service.
 The third quarter this year includes a non-recurring pre-tax charge of $2.8 million in net interest expense ($1.0 million on an after-tax basis) associated with the Revco recapitalization that was concluded during the quarter, as discussed below. The non-recurring charge represents net interest expense for the period in which both old and new debt securities were outstanding.
 For the current year's third quarter, net income excluding amortization of goodwill was $8.3 million, $.21 per share.
 For the fiscal year to date, sales advanced to $1.5 billion, a 6.0 percent increase from last year's sales of $1.4 billion. Comparable store sales increased 5.3 percent for the 36 weeks. Operating profit increased significantly to $40.0 million, a 65.5 percent increase from last year's $24.2 million. EBITDA was $71.3 million, a 20.1 percent improvement over the $59.4 million reported for last year. Net income was $2.2 million, $.06 per share, an improvement of $10.5 million from last year's net loss of $8.3 million despite the impact of the non- recurring items discussed above for the quarter.
 For the current fiscal year to date, net income excluding amortization of goodwill was $14.4 million, $.39 per share.
 D. Dwayne Hoven, Revco president and chief operating officer, said, "We are pleased with our operating results for the first three quarters. They clearly reflect our continuing ability to manage margins and control expense, which allows us to turn modest sales increases into strong operating profit improvements."
 Recapitalization completed, improves capital structure
 During the quarter, Revco completed a recapitalization of the company. Through this program, Revco reduced its total debt by $151.0 million and increased (through a rights offering) its stockholders' equity by $108.0 million, reducing the company's ratio of debt to total capitalization from 57 percent to 37 percent.
 Gregory K. Raven, executive vice president-finance and chief financial officer, noted that the combination of debt reduction and lower interest rates should reduce Revco's annual interest expense by approximately $20 million.
 Since the recapitalization, the company has not borrowed under its $150 million revolving credit facility. In addition, during the third and early in the fourth fiscal quarters, the company has made $15 million in payments on its $150 million term loan, $11.25 million of which represent prepayments. Cash reserves subsequent to the recapitalization remain strong, $23.1 million as of Feb. 6.
 Based in Twinsburg, Ohio, Revco operates more than 1,180 drug stores in nine contiguous eastern states, and fills more than 46 million prescriptions annually.
 Revco D.S., Inc. and Subsidiaries
 Consolidated Results of Operations
 (dollars in thousands)
 Third Quarter (Unaudited)
 12 Weeks Ended
 Feb. 6, 1993 Feb. 8, 1992
 Sales $552,438 $522,886
 Cost of sales 391,084 368,858
 Operating expenses 125,982 124,249
 Depreciation expense 6,759 8,215
 Goodwill amortization 4,062 3,561
 Operating profit 24,551 18,003
 Interest expense, net 12,109 4,250
 Income before reorganization items
 and income taxes 12,442 13,753
 Reorganization items 0 7,080
 Income (loss) before income taxes 12,442 6,673
 Income tax provision (benefit) 8,176 (9,522)
 Net income (loss) $4,266 $16,195
 Earnings per share $0.11 --
 Supplementary data:
 Average number of shares
 outstanding 39,072,593 --
 Earnings before income taxes,
 reorganization items, interest,
 depreciation and amortization $35,372 $29,779
 Number of drug stores at end of
 period 1,165 1,141
 36 Weeks Ended
 Feb. 6, 1993 Feb. 8, 1992
 Sales $1,510,630 $1,425,651
 Cost of sales 1,065,779 1,003,592
 Operating expenses 373,569 362,694
 Depreciation expense 19,060 24,494
 Goodwill amortization 12,186 10,683
 Operating profit 40,036 24,188
 Interest expense, net 33,624 23,687
 Income before reorganization items
 and income taxes 6,412 501
 Reorganization items 0 18,372
 Income (loss) before income taxes 6,412 (17,871)
 Income tax provision (benefit) 4,213 (9,522)
 Net income (loss) $2,199 ($8,349)
 Earnings per share $0.06 --
 Supplementary data:
 Average number of shares
 outstanding 36,923,614 --
 Earnings before income taxes,
 reorganization items, interest,
 depreciation and amortization $71,282 $59,365
 Number of drug stores at end of
 period 1,165 1,141
 Per share data are not presented for fiscal 1992, due to the general lack of comparability as a result of the revised capital structure of the company.
 -0- 3/10/93
 /CONTACT: Diana Lueptow of Revco D.S., Inc., 216-425-9811, ext. 6145; or investor relations, ext. 2811/
 (RXR)


CO: Revco D.S., Inc. ST: Ohio IN: REA SU: ERN

KK -- CL004 -- 4839 03/10/93 09:40 EST
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Date:Mar 10, 1993
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