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SOUTHLAND REPORTS 1992 FIRST-QUARTER RESULTS

 SOUTHLAND REPORTS 1992 FIRST-QUARTER RESULTS
 DALLAS, May 13 /PRNewswire/ -- The Southland Corporation today


reported revenues of $1.77 billion for the quarter ended March 31, 1992, down 5.7 percent from the prior year's quarter due to 230 fewer convenience stores, lower retail gasoline prices and the continuing phase-out of outside foodservice business at its five distribution centers. The company reported a net loss for the quarter of $44.9 million, ($.11 per share (A)) versus earnings of $91.2 million ($.68 per share (A)) for the same period last year, which included an extraordinary gain of $143.8 million ($1.07 per share (A)) related to the company's financial restructuring consummated on March 5, 1991.
 Excluding that gain, the company would have recorded a net loss of $52.6 million ($.39 per share (A)) for last year's first quarter. The quarter-to-quarter comparison reflected $18.7 million less total interest expense in 1992 primarily due to lower balances and declining interest rates on the company's senior term loan and no borrowings under its revolving credit facility, and the absence of restructuring expenses this year.
 As stated in its March 27, 1992, announcement of year-end financial results, Southland has requested its senior bank lenders to extend the company's revolving credit facility beyond its Dec. 31, 1992, expiration.
 (A) Per-share amounts are both primary and fully diluted.
 The company also intends, in the second half of 1992, to arrange a new financing with some assistance from Ito-Yokado Co., Ltd., the 51 percent owner of IYG Holding Company, which owns 70 percent of Southland's stock. After completion of the new financing, Southland expects to prepay a significant portion of the $730 million term loan.
 During the first quarter, same-store merchandise sales (sales at stores open more than one year) at the company's 7-Eleven and other convenience stores decreased 2.3 percent, while the merchandise gross profit margin was essentially flat for the quarter. The company's convenience stores that sell gasoline recorded a half-cent uptick in gross profit margin for the quarter to 10.6 cents per gallon, along with increases in both per-store gallonage and gross profits for the quarter.
 Clark Matthews, Southland's president and chief executive officer, commented, "Over the last several months, we've been working to provide better, more consistent value to our customers, while improving 7-Eleven's overall profitability. We're doing that by moving toward 'everyday fair pricing' -- reducing prices on some items and increasing them on others -- and through less discounting and promotional activity combined with attention to more efficient buying practices.
 "Through these and other initiatives we've undertaken the last few months," Matthews continued, "we're building strategies that will enable us to manage our business more profitably over the long term, even though start-up costs may continue to negatively impact earnings for some time yet. In the meantime, however, we've just launched our new 1992 advertising campaign -- the first national advertising we've aired in over six months -- right on the brink of the all-important summer selling season for 7-Eleven, and we hope to see some offsetting positive impact from that."
 Southland is required to prepare its financial statements since completing its reorganization in accordance with Statement of Financial Accounting Standards No. 15 (SFAS No. 15).
 Under SFAS No. 15, the liability for the company's restructured public debt as recorded on the balance sheet includes all future undiscounted cash payments, both principal and interest. For that reason, no interest expense will be recognized over the life of these securities, although the interest payments are tax deductible. The liability is reduced by the amount of the interest payments at the time they are disbursed. Those cash interest payments will total $65 million annually from 1992 through 1996.
 With more than 13,000 convenience stores around the world, 7-Eleven is the premier name and largest chain in the convenience retailing industry. Over 6,300 7-Eleven stores are operated or franchised in the United States and Canada by The Southland Corporation. Southland is 70- percent owned by IYG Holding Company, a wholly owned subsidiary of Ito- Yokado Co., Ltd. (NASDAQ: IYCOY) and Seven-Eleven Japan Co., Ltd. Seven-Eleven Japan operates approximately 4,600 7-Eleven stores under an area license agreement with Southland. Another 2,400 7-Eleven stores are operated by area licensees of Southland in parts of the U.S. and 17 other countries.
 THE SOUTHLAND CORPORATION AND SUBSIDIARIES
 Consolidated Statements of Operations
 (Dollars In thousands, except per-share data, unaudited)
 Three Months Ended
 March 31 1992 1991
 Total revenues $1,777,025 $1,883,927
 Cost of sales and expenses:
 Cost of goods sold 1,411,479 1,503,221
 SG&A expenses 371,208 377,130
 Interest expense 33,856 52,572
 Contributions to Employees'
 Savings & Profit Sharing Plan 4,105 3,629
 Total of sales and expenses 1,820,648 1,936,552
 Loss before income taxes and
 extraordinary item (43,623) (52,625)
 Income taxes 1,300 --
 Loss before extraordinary item (44,923) (52,625)
 Extraordinary gain on debt
 restructuring -- 143,824
 Net earnings (loss) ($44,923) $91,199
 Earnings (loss) per average common
 share outstanding (primary &
 fully diluted):
 Before extraordinary item ($0.11) ($0.39)
 Extraordinary item -- 1.07
 Net earnings (loss) ($0.11) $0.68
 Average primary & diluted shares 410,022 133,456
 THE SOUTHLAND CORPORATION AND SUBSIDIARIES
 Condensed Consolidated Balance Sheets
 (Dollars in thousands, except per-share data)
 March 31, Dec. 31,
 1992 1991
 (Unaudited)
 Current assets:
 Cash and cash equivalents $ 184,437 $ 238,561
 Accounts and notes receivable 108,173 125,631
 Inventories 237,210 227,215
 Deposits and prepaid expenses 51,448 48,582
 Total current assets 581,268 639,989
 Property, plant and equipment 1,544,010 1,575,614
 Other assets 369,924 380,184
 Total $2,495,202 $2,595,787
 Liabilities and shareholders'
 equity (deficit)
 Current liabilities:
 Accounts payable and accrued
 expenses $ 547,058 $ 594,200
 Income taxes 5,435 5,230
 Long-term debt due within
 one year 217,577 168,246
 Total current liabilities 770,070 767,676
 Deferred credits and other
 liabilities 139,258 138,655
 Long-term debt 2,815,007 2,873,603
 Redeemable common stock
 purchase warrants 26,136 26,136
 Commitments and contingencies
 shareholders' equity (deficit):
 Common stock, $.0001 par value 41 41
 Additional capital 599,588 599,588
 Accumulated deficit (1,854,898) (1,809,912)
 Total shareholders' equity
 (deficit) (1,255,269) (1,210,283)
 Total $2,495,202 $2,595,787
 -0- 5/13/92
 /CONTACT: Cecilia Stubbs Norwood of The Southland Corporation, 214-828-7272, or for a recorded Update, 214-828-7587/
 (IYCOY) CO: Southland Corporation ST: Texas IN: REA SU: ERN


AH -- NY103 -- 9898 05/13/92 16:40 EDT
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Date:May 13, 1992
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