GLENDORA, N.J., Nov. 28, 2001 (PRIMEZONE) -- U.S. Vision, Inc. (Nasdaq:USVI) today announced financial results for the third quarter ended October 31, 2001.
Net sales for the three months ended October 31, 2001 decreased 8.5% to $34.2 million compared to $37.4 million for the same period last year. The decrease was due to the closing of 84 unproductive stores and a 2.7% decrease in comparable store sales. The Company reported a net loss for the third quarter of $773,000, or $0.10 per share, compared to net income of $1.4 million, or $0.17 per share, in the third quarter of last year.
Net sales for the nine months ended October 31, 2001 declined 10.0% to $104.5 million compared to $116.1 million for the same period last year. The decline was due to the closing of 110 unproductive stores and a 3.1% decrease in comparable store sales. Net income for the nine months ended October 31, 2001, was $508,000, or $0.06 per share, compared to $4.7 million, or $0.60 per share, for the same period last year.
The prior year results benefited from the capitalization of certain costs (including salaries and interest expense) incurred in connection with the development of our point of sales system. Excluding the impact of those costs and the expenses incurred in connection with the proposed merger of the Company with the NOROB Group, Inc., the loss for the current quarter would have been $192,000 and net income for the nine month period would have been $2.2 million. The Company announced earlier this week that the proposed merger with NOROB has been terminated.
Commenting on the results, William A. Schwartz, President and Chief Executive Officer, stated, "A weak year for most of retail, including the optical industry and U. S. Vision, was compounded by the events of September 11, but through the nine months ending October 31, 2001, we had decreased SG&A expenses by $4.3 million. Cost of sales as a percentage of net sales for the nine months ended October 31, 2001 decreased by 0.2% due to preemptive action taken by management. However the positive benefits of these initiatives on our results were overwhelmed by the negative impact on sales and margins due to September 11 and its aftermath."
Mr. Schwartz concluded, "As a result of the events of September 11 and the slowdown in the economy, management has taken a number of actions to reduce costs and improve profitability. Such actions include price increases, closing unprofitable stores, staff reductions, pay freezes, unpaid leaves, department consolidations, and reductions in travel and advertising. Due to the timing of these actions, the benefits are not expected to begin to be realized until the first quarter of fiscal 2002."
U.S. Vision also announced that Carmen J. Nepa III has been named Chief Financial Officer of the Company. Mr. Nepa joins U.S. Vision from the Philadelphia office of Ernst & Young LLP, the Company's independent auditors.
U.S. Vision's management will conduct a conference call today at 4:30 P.M. (EST) to discuss the third quarter results. The dial-in number for that call is 212-896-6076. A replay of the conference call will be available from 6:30 PM (EST) on Wednesday, November 28, 2001, through 6:30 PM (EST) on Friday, November 30, 2001, and the replay dial-in number is 858-812-6440 (access code 20007761).
U.S. Vision is a leading national retailer of optical products and services primarily through licensed retail optical departments located in regional and national department stores. The Company currently operates approximately 618 locations in 47 states in the United States and Canada. U.S. Vision's retail optical departments offer an extensive selection of designer brand and private label prescription eyewear, contact lenses, sunglasses and accessories, as well as on-site eye examinations performed by independent optometrists.
This press release contains statements that are forward-looking within the meaning of applicable federal securities laws including but not limited to statements regarding the Company's expectations concerning its financial performance and operations. These statements are based on the Company's current expectations and assumptions, which are subject to a number of risks and uncertainties that could cause the actual results to differ materially from those anticipated. Factors that could cause actual results to differ include the factors set forth under the caption "Caution Regarding Forward Looking Statements" in the Company's Annual Report on Form 10-K for fiscal year ended January 31, 2001 and as they may be updated in any subsequent Quarterly Reports on Form 10-Q, all as filed with the Securities and Exchange Commission.
U.S. Vision, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
October 31, October 31,
2001 2000 2001 2000
---------- ---------- ---------- ----------
Net sales $ 34,231 $ 37,395 $ 104,507 $ 116,060
Cost of sales 10,314 11,143 31,441 35,158
---------- ---------- ---------- ----------
Gross profit 23,917 26,252 73,066 80,902
Operating expenses:
Selling,
general and
administrative 23,154 23,633 67,756 72,022
expenses
Depreciation and
amortization 1,312 1,135 3,961 3,628
---------- ---------- ---------- ----------
24,466 24,768 71,717 75,650
---------- ---------- ---------- ----------
Operating income
(loss) (549) 1,484 1,349 5,252
Interest expense,
net 224 91 800 338
---------- ---------- ---------- ----------
Income (loss)
before income
tax provision (773) 1,393 549 4,914
Income tax
provision 0 35 41 217
---------- ---------- ---------- ----------
Net income (loss) $ (773) $ 1,358 $ 508 $ 4,697
========== ========== ========== ==========
Net income (loss)
per share
- diluted $ (0.10) $ 0.17 $ 0.06 $ 0.60
========== ========== ========== ==========
Shares used in
computing net
income (loss)
per share
- diluted 7,802,942 7,855,476 7,952,893 7,820,453
========== ========== ========== ==========
U.S. Vision, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
October 31, January 31,
2001 2001
--------- ---------
Assets
Current assets:
Cash $ 537 $ 240
Accounts receivable 11,450 10,879
Inventory 20,752 20,954
Other 931 1,130
--------- ---------
Total current assets 33,670 33,203
Property, plant, and equipment, net 39,008 40,524
Goodwill, net 6,095 6,356
Other assets 630 995
--------- ---------
$ 79,403 $ 81,078
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Liabilities and stockholders' equity
Current liabilities:
Accounts payable-trade $ 5,944 $ 4,865
Accrued expenses and other 5,351 6,483
Current portion of obligations
under capital lease 1,025 945
Current portion of long-term debt 364 450
--------- ---------
Total current liabilities 12,684 12,743
Obligations under capital lease 1,734 2,272
Long-term debt, less current portion 14,662 16,112
Other long-term liabilities 369 505
Stockholders' equity:
Common stock 78 78
Additional paid-in capital 115,766 115,766
Accumulated deficit (65,890) (66,398)
--------- ---------
Total stockholders' equity 49,954 49,446
--------- ---------
$ 79,403 $ 81,078
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