Braun's Fashions Corporation Reports
Strong First Quarter Results
MINNEAPOLIS, MN - June 18, 1997 - With 19% growth in
same-store sales and significantly stronger profit margins,
(Nasdaq: BFCI) posted its third consecutive quarter of sharply
higher net income.
"Our strong first quarter results mark the third
consecutive quarter of substantial improvement, with 19% growth
in same-store sales and significantly stronger profit
margins," said Nicholas H. Cook, Chairman and Chief
Executive Officer. "While we do not project sustaining the
high double-digit increases in same-store sales of the past three
quarters, we are building positive sales momentum with our
customer base, which continues to expand as consumers
increasingly recognize the quality and value of our
merchandise."
Cook noted that Braun's private label merchandise accounts for
more than 65% of the Company's total sales, with direct import
goods representing approximately 50% of total merchandise
purchased. This strategy gives Braun's the ability to
differentiate itself from its competitors and to provide its
customers with quality goods at excellent values.
First Quarter Fiscal 1998 Results In the first quarter ended
May 31, 1997, Braun's net income rose to $960,000 or $0.20 per
share, from a net loss of $218,000 or $0.06 per share in the
year-ago quarter. First quarter fiscal 1998 results include an
extraordinary gain of $105,000 or $0.02 per share related to the
April 1997 purchase at a discount from par of $800,000 principal
face amount of 12% Senior Notes due 2005. The first quarter
earnings increase was mainly due to strong improvements in
same-store sales and profit margins. Quarterly comparisons of net
income per share were affected by a 26% increase in weighted
average shares outstanding in the first quarter of fiscal 1998 as
compared to the same quarter last year.
Overall, sales increased 2% to $21.8 million in the first
quarter of fiscal 1998, despite operating 51 fewer stores than a
year ago. Underperforming stores were closed during the company's
Chapter 11 bankruptcy reorganization, which was successfully
completed on December 3, 1996. During the first quarter of fiscal
1998, Braun's opened 5 stores and closed 5 stores as leases
expired. At the close of the first quarter, Braun's operated 170
stores in 20 states.
Same-store sales increased 19% in the first quarter of fiscal
1998 to $21.1 million on 167 stores operating during the
comparable first quarters. Operating income on those stores rose
by 179%. With that performance, same store operating margin as a
percent of sales more than doubled to 7.2% from 3.0%. Cook said
that fiscal 1998 same-store comparisons were adversely affected
by the unseasonably cold weather during May in the upper Midwest,
where most of Braun's stores are located. He added that sales
have increased recently with the region's warmer weather.
Gross margin was 35.1%, up from 31.2% in last year's first
quarter. On a same-store basis, gross margin increased to 35.1%
from 33.8%. Cook said that stores closed during the past year had
lower gross margins than continuing stores, and that same-store
gross margin comparisons better reflect Braun's profitability
going forward. He added that inventory is current and on plan.
Operating income rose to $1.6 million compared with $7,000 in
the year-ago quarter, due to improvements in gross margin and
lower selling, general and administrative expenses (SG&A).
Braun's reduced SG&A expenses to $5.5 million from $5.9
million during the first quarter, which decreased SG&A
expenses as a percentage of total sales to 25.1% from 27.6% in
the prior year.
Sound Financial Position
The company's financial condition remained sound at the end of
the first quarter. Cash and equivalents stood at $9.8 million.
Its current ratio was a healthy 3.3-to-1 and its quick ratio was
1.5-to-1. Working capital amounted to $15.7 million. Long-term
debt stood at $9.6 million and represented 36.8% of total
capitalization. Shareholders equity rose to $16.5 million at the
end of the first quarter from $13.4 million at the same time a
year earlier.
Cook concluded, "We look forward to continued progress as
we focus on the needs of our target customer - the
value-conscious, working woman in mid- sized markets of the upper
Midwest. We've established clear competitive advantages,
particularly with the quality and pricing of our private label
and direct import merchandise, and we continue to increase our
profitability and sales per square foot."
This release contains forward-looking statements regarding
future performance of the company. The achievement of such
results is subject to certain risks and uncertainties, including
changes in economic and market conditions, the effect of consumer
tastes and spending habits, the realization of expected economies
gained through the use of private label and direct import
merchandise, management of growth and other factors outside the
company's control, including factors discussed from time to time
in the company's filings with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on
forward-looking statements, which reflect management's analysis
only as of the date hereof. The company undertakes no obligation
to update these forward-looking statements to reflect events or
circumstances that may arise after the date hereof.
Braun's Fashions Corporation is a Minneapolis-based specialty
retailer of women's clothing and accessories that focuses on
quality/value-priced fashions for working women. Presently, the
company has 170 stores operating in 20 states, located primarily
in the upper Midwest. Braun's common stock is traded on the
Nasdaq Stock Market under the ticker symbol BFCI.
Financial Highlights
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
May 31, 1997 June 1, 1996
Net sales $21,842 $21,504
Net income (loss) before
extraordinary gain $855 $(218)
Extraordinary gain 105 --
Net income (loss) $960 $(218)
Earnings (loss) per share (a):
Net income (loss) before
extraordinary gain $0.18 $(0.06)
Extraordinary gain 0.02 --
Net income (loss) $0.20 $(0.06)
Three Months Ended
May 31, 1997 % of Sales June 1, 1996
% of Sales
Net sales $21,842 100.0 $21,504
100.0
Cost of sales 14,183 64.9 14,798
68.8
Gross profit 7,659 35.1 6,706
31.2
Selling, general and
administrative 5,472 25.1 5,936
27.6
Depreciation and amortization 606 2.8 763
3.6
Operating income 1,581 7.2 7
0.0
Interest, net 201 0.9 359
1.6
Income (loss) before
income taxes 1,380 6.3 (352)
(1.6)
Income tax provision (benefit) 525 2.4 (134)
(0.6)
Net income (loss) before
extraordinary gain 855 3.9 (218)
(1.0)
Extraordinary gain 105 0.5
-- --
Net income (loss) $960 4.4 $(218)
(1.0)
Earnings (loss) per share (a):
Net income (loss) before
extraordinary gain $0.18 $(0.06)
-- --
Extraordinary gain 0.02
-- -- --
Net income (loss) $0.20 $(0.06)
-- --
(a) Based on the weighted average number of outstanding shares
of common
stock and common stock equivalents of 4,776,700 for the
period ended
May 31, 1997 and 3,793,312 for the period ended June 1,
1996.
Braun's Fashions Corporation
Comparative Financial Statements of Continuing Stores
(Dollars in Thousands)
(Unaudited)
Three Months Ended Three
Months Ended
May 31, 1997 June
1, 1996
Net sales $21,084 100.0% $17,780
100.0%
Merchandise, buying and
occupancy 13,686 64.9% 11,765
66.2%
Gross profit 7,398 35.1% 6,015
33.8%
Selling, general and
administrative 5,291 25.1% 4,896
27.6%
Depreciation and
amortization 596 2.8% 577
3.2%
Operating income $1,511 7.2% $542
3.0%
Number of continuing stores 167 -- 167
--
SOURCE Braun's Fashion Corporation/CONTACT: Herbert D.
Froemming, President and Chief Operating Officer, of Braun's
Fashion Corporation, 612-551-5000, or General, Larry Stein, or
Analysts, Bill Schmidle, all of The Financial Relations Board,
Inc., 312-266-7800/
LOT$OFF Corporation Announces Emergence
From Bankruptcy
SAN ANTONIO, Texas, June 18, 1997 - San Antonio based LOT$OFF
Corporation announced today that the effective date of its court
confirmed plan of reorganization was June 16, 1997, at which time
the key elements of the plan were implemented, including the
changing of the Company's corporate name from 50-OFF Stores, Inc.
to LOT$OFF Corporation (Nasdaq: FOFF)("LOT$OFF").
Among those key elements were the cancellation of all common
stock in 50- OFF Stores, Inc. and the issuance of 855,320 shares
of LOT$OFF Series A Preferred Stock (each such share is
convertible into two shares of LOT$OFF Common Stock and is
entitled to a 5.5%, $0.275, cumulative annual dividend; LOTSP:
CUSIP .545674202) and 855,320 shares of LOT$OFF Common Stock
(LOTS: CUSIP .545674103) to subscribers to its previously
reported rights offering for $4,276,600.
LOT$OFF also entered into a $15,000,000 revolving credit
agreement maturing on June 16, 2000 with General Electric Capital
Corporation ("GECC"). The new credit facility bears
interest at a floating rate equal to the published rate for
thirty-day commercial paper issued by major corporations plus
3.00% per annum and provides for an unused facility fee of 0.5%
per annum. Borrowings under the facility are available in
aggregate amounts up to 65% of LOT$OFF eligible inventory for the
period from August 15 through December 15 and up to 60% for the
period from December 16 through August 14, subject to certain
required reserves. The proceeds of the facility, together with
the net proceeds from the rights offering, will be used to
refinance the Company's debtor in possession facility, also with
GECC, to provide post- confirmation working capital and for
selected other general corporate purposes, including the LOT$OFF
exit from bankruptcy. As of today, LOT$OFF had $6,227,000
available for borrowing under the line (after reserves of
$1,044,000), of which $2,560,000 was committed, leaving a net
availability of $3,667,000.
Through the plan of reorganization, LOT$OFF has restructured
its obligations and capitalization in order to strengthen its
financial position so management can more fully implement its
business plan and improve the Company's operating performance.
LOT$OFF's ability to successfully reorganize and continue as a
going concern will be affected by a number of factors, including,
but not limited to, the degree of success in reversing the
Company's recent business trends and the ability to alleviate
trade credit concerns and restore merchandise flow to adequate
levels. While management believes that the recent closing of
stores and the implementation of expense cuts commensurate with
the downsizing of the total stores in operation (from 101 to 41
core stores in Texas, Louisiana, Oklahoma, New Mexico and
Tennessee) facilitates its efforts to improve the Company's
operating performance and that the recapitalization implemented
on June 16, 1997 should strengthen its financial position and
alleviate concerns of credit and merchandise suppliers, no
assurance can be given that LOT$OFF will be successful in its
continuing efforts to reverse negative business trends, which
have continued through the effective date, and return to
profitability.
SOURCE LOT$OFF Corporation /CONTACT: Charles Furhmann, CEO of
LOT$OFF Corporation, 210- 804-4904/
StreamLogic Corp. considers
restructuring alternatives
MENLO PARK, Calif.--June 18, 1997--StreamLogic Corp.
(NASDAQ:STLC) issued a press release on June 17, 1997, announcing
its preliminary results for the fourth quarter and for the fiscal
year ended March 28, 1997.
The company announced that in light of these results, the
necessity to conserve its remaining cash resources and the
substantial likelihood of continuing operating losses for the
first quarter of fiscal 1998, that the company is considering
various restructuring alternatives, including the possibility of
seeking protection under the federal bankruptcy laws, which could
materially and adversely affect shareholder value.
In addition, in the June 17, 1997, release, the company
announced that it had been unable to make its scheduled principal
and interest payment due as of June 15, 1997, under the company's
6 percent Convertible Subordinated Debentures due 2012.
The company is correcting this information. The principal and
interest payment is not due until Sept. 15. Accordingly, the
company is not in technical payment default under the Debentures;
however, no assurance can be given that the company will be able
to make the appropriate principal and interest payment on the
correct due date of Sept. 15, 1997.
All other information contained within the earlier June 17
release remains true and correct as of the date of this release
and is incorporated by reference into this release.
CONTACT: StreamLogic Corp. Mark M. Glickman, 415/833-4833