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 BEDFORD HEIGHTS, Ohio, Oct. 27 /PRNewswire/ -- Waxman Industries, Inc. (NYSE: WAX), a leading supplier to the home repair and remodeling market throughout the United States and Canada, today reported results for the company's first quarter ended Sept. 30, 1993.
 Sales for the quarter totaled $91,400,000, compared with $101,323,000 in the first quarter of the prior year, a decrease of 9.8 percent. Sales from U.S. operations increased approximately 1.0 percent over the year-ago period, while sales in Canada declined 21.3 percent. The sales decrease in Canada is due primarily to the continuing weak economy there, combined with a 7.9 percent decrease between years in the average currency exchange rate used to translate the Canadian operations' income statement accounts into U.S. dollars. First quarter sales in Canada were also affected by the closing of a large branch operation in Edmonton, Alberta. Sales in Canada expressed in Canadian dollars declined 8.9 percent compared to the year-ago quarter, after excluding prior year sales from the closed branch.
 Operating income for the first quarter totaled $6,655,000 compared with $7,059,000 in the prior year period. Operating cash flow operating income before depreciation and amortization) for the first quarter totaled $8,880,000 compared with $9,363,000 in the prior year period. Interest expense totaled $6,076,000 in the current quarter compared to $6,327,000 in the year-ago period.
 Net income before cumulative effect of an accounting change totaled $529,000, or $.05 per share, compared with $422,000 or $.04 per share in the year-ago quarter. Net income totaled $529,000 or $.05 per share compared to a net loss of $1,688,000, or $.14 per share, in the year-ago quarter. The year-ago results include a charge of $2,110,000 or $.18 per share for the cumulative effect of a change in accounting. Net income in the current quarter was favorably impacted as a result of the utilization of net operating loss carryforwards.
 Commenting on the company's results, Armond Waxman, president and co- chief executive officer, said, "Sales from our U.S. operations increased by 1 percent overall as compared to the prior year first quarter and by 7.4 percent compared to the trailing fourth quarter. Barnett Inc., the largest unit in our Mail Order/Telemarketing Group, continued to expand its national network of warehouses, with the opening of its 27th warehouse in July, located in Baltimore. Barnett's 28th warehouse, located in Cincinnati, is scheduled to open November 1st. Barnett's first quarter sales increased 11.2 percent over the prior year quarter.
 "In Canada, we continue to be affected by the recession and the currency exchange rate. Our sales in Canada were also affected by the closing of our Edmonton operation. Notwithstanding the drop in sales, our operations in Canada were profitable for the quarter," he concluded.
 Subsequent to the end of the first quarter, the company completed the sale of one of its Canadian operations, H. Belanger Plumbing Accessories, Ltd. The company sold all of the capital stock of Belanger to a group led by the management of Belanger in exchange for cash and a promissory note. Belanger, based in Montreal, is engaged in the distribution of plumbing specialty products, including bulk and packaged products to plumbing and hardware wholesalers and retailers. During fiscal 1993, Belanger had net sales of $6,335,000.
 The company also announced that it intends to commence a consent solicitation to the holders of its Senior Secured Notes and Senior Subordinated Notes. The company will be soliciting the consent of the holders of these securities to waivers and amendments of certain provisions of the indentures governing the securities. The effect of the consents would be to cure an existing default under the Senior Secured Notes and to amend certain covenants in both the Senior Secured Notes and the Senior Subordinated Notes to reflect the company's current financial position so that future compliance with the covenants would not be negatively impacted by the company's fiscal 1993 operating results. Effectiveness of each of the waivers and the amendments requires the consent of holders of at least 66-2/3 percent of the outstanding principal amount of the securities. The company expects to complete the consent solicitation during November.
 Waxman Industries, Inc. is a leading supplier to the home repair and remodeling market in the United States and Canada. In the U.S., the company's plumbing, electrical and hardware products are sold primarily to home improvement centers, warehouse home centers, mass merchandisers, hardware stores, lumber yards and, through its mail order and telemarketing operations, to approximately 45,000 independent retailers, repair and remodeling contractors, property managers and locksmiths. The company assembles, packages and markets many of these products under its proprietary trade names. In Canada, the company is one of the largest suppliers of plumbing and heating products, serving approximately 10,000 customers across Canada, including repair and remodeling contractors, residential and commercial contractors and retailers.
 (In Thousands, Except Per Share Data)
 Quarter Ended September 30, 1993 1992
 Net Sales $ 91,400 $101,323
 Cost of Sales 63,684 71,493
 Gross Profit 27,716 29,830
 Operating Expenses 21,061 22,771
 Operating Income 6,655 7,059
 Interest Expense, net 6,076 6,327
 Income Before Income Taxes
 and Cumulative Effect of
 Accounting Change 579 732
 Provision for Income Taxes 50 310
 Net Income Before Cumulative
 Effect of Accounting Change 529 422
 Cumulative Effect of Change in
 Accounting for Warehouse and
 Catalog Costs, without Tax
 Benefit --- (2,110)
 Net Income (Loss) $ 529 $ (1,688)
 Primary and Fully Diluted
 Earnings Per Share:
 Income Before Cumulative
 Effect of Accounting Change $ .05 $ .04
 Cumulative Effect of Accounting
 Change --- $ (.18)
 Net Income (Loss) $ .05 $ (.14)
 Average Shares Outstanding 11,662 11,662
 As previously reported (A)
 Net Income --- $ 422
 Earnings Per Share --- $ .04
 (A) -- Fiscal year 1993 first quarter results have been restated for the cumulative effect of an accounting change adopted in the fourth quarter of fiscal year 1993 and applied retroactively to July 1, 1992.
 September 30 and June 30, 1993
 (In Thousands)
 September June
 Current Assets:
 Cash $ 2,488 $ 2,001
 Accounts receivable, net 60,592 58,435
 Inventories 95,973 96,941
 Prepaid expenses 6,986 7,089
 Net assets held for sale 10,436 10,266
 Total current assets 176,475 174,732
 Property and equipment, net 30,906 31,631
 Cost of Businesses in Excess of
 Net Assets Acquired, net and
 Other Assets 72,561 74,320
 Total $279,942 $280,683
 Current Liabilities:
 Bank debt $ 35,158 $ 38,671
 Long-term debt classified as current 184,436 184,761
 Accounts payable 42,088 40,277
 Accrued liabilities 11,563 9,478
 Total current liabilities 273,245 273,187
 Stockholders' equity before cumulative
 currency translation adjustments 12,676 12,147
 Cumulative currency translation adjustments (5,979) (4,651)
 Total Stockholders' Equity 6,697 7,496
 Total $279,942 $280,683
 -0- 10/27/93 R
 /CONTACT: Jerome C. Jacques of Waxman Industries, 216-439-1830/

CO: Waxman Industries ST: Ohio IN: CST SU: ERN

AR -- CL025 -- 7709 10/28/93 08:18 EDT
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Publication:PR Newswire
Date:Oct 28, 1993

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