Wednesday, April 21, 1999
Elder-Beerman says earnings, outlook up
BY LISA BIANK FASIG
The Cincinnati Enquirer
Elder-Beerman Stores Corp. Tuesday posted higher earnings for fiscal 1998 — its first full year out of bankruptcy — and said it is positioning itself for years of steadier expansion.
“1998, if you put a headline on it, was a year of big growth,” said Scott Davido, executive vice president and chief financial officer at Elder. “This is a year when we step back, we take a breath, and we make sure our execution is as good and sharp as it can be.”
The Dayton, Ohio-based retailer, which emerged from Chapter 11 bankruptcy protection in December 1997, said earnings after factoring in gains and charges rose to $25.5 million, or $1.76 a diluted share. That compares with a net loss of $29 million for fiscal year 1997.
Earnings before gains and charges rose to $13.8 million, or 95 cents a diluted share. The charge relates to integration costs of Elder's Stone & Thomas acquisition last year. Gains are related to the sale of real estate, reorganization income and tax benefits. The $13.8 million figure excludes those items and is based on a 38 percent income tax rate.
Sales, which include receipts from the 11 Stone & Thomas stores, advanced 8.8 percent, to $632.4 million from $581.4 million in 1997.
Analysts said the performance is in line with expectations for an extremely active year. Since emerging from Chapter 11 bankruptcy, Elder posted a secondary stock offering and opened 14 new department stores, which include Stone & Thomas. It runs 60 department stores.
“Going forward, I think we're going to see much steadier growth for these guys,” said Jeff Stinson, an analyst covering Elder for Midwest Research Maxus Group in Cleveland.
Mr. Stinson, along with another analyst, Jeff Stein, agree with 1999 Elder expectations that store square footage will grow by 4 percent to 5 percent and sales at stores open a year will increase 2 percent to 3 percent. Elder does not release earnings expectations, but the analysts both predict earnings per share will reach $1.
“We think that this year will be a year of execution for the company,” said Mr. Stein, of McDonald & Co. Securities, also in Cleveland.
Elder-Beerman plans to open three stores in 1999, each following a prototype that involves a smaller format but equal volume. Elder also is developing a process to closely track sales and replenishment at each store.
“We're doing the right thing this year,” Mr. Davido said. “We're setting the platform for strong growth in 2000.”
In other earnings reports:
Globe Business Resources Inc. Tuesday said its fourth-quarter net income advanced more than 500 percent and its fiscal 1998 earnings rose almost 27 percent, to $1.10 a diluted share.
The corporate housing and furniture rental company said annual net income rose to $5.15 million in the year. That compared with almost $4.07 million, or 89 cents a share, in 1997.
Revenues rose almost 42 percent, to $147.5 million from $103.9 million in the year before.
For the quarter, net income rose to $974,000, or 21 cents a diluted share, from $160,000, or 3 cents a diluted share in the same period a year before. Sales increased to $36.7 million from $28.6 million in 1997.
Globe in 1997 posted an 83 percent drop in its fiscal fourth-quarter earnings. It blamed the decline on several corporate housing acquisitions, computer system conversion troubles and increased spending caused by its expansion.
Globe entered the corporate housing business three years ago and is striving to become the leading national player in temporary relocation.
• Chemed Corp.: The owner of Roto-Rooter Group and Patient Care said earnings rose 44 percent in the first quarter, before factoring in capital gains for 1998 and 1999. After capital gains, it recorded a loss over the year-ago quarter.
Before capital gains, earnings at the Cincinnati holding company rose to $3.4 million, or 33 cents a share, from $2.4 million, or 24 cents a share. Capital gains totaled $1.9 million in 1999 and $3.9 million in 1998.
Income including capital gains declined to $5.4 million, or 51 cents a share, from $6.3 million, or 63 cents a share.
Revenue rose to $104.1 million in the first quarter of 1999 from $88.4 million in the same quarter in 1998.
Chemed credits unprecedented growth at its Roto-Rooter subsidiary for the company's performance. Roto-Rooter revenue increased 35 percent and its earnings advanced 53 percent.
• LSI Industries Inc.: The Blue Ash manufacturer of lighting and graphics reported record sales and earnings for the third quarter.
For the three months ended March 31, LSI reported net income of $3.1 million, or 30 cents a share, up 61 percent from the $1.9 million, or 20 cents a share, a year earlier.
Revenues rose 23 percent to $53.4 million from $43.4 million a year earlier. Commercial and industrial lighting sales sales rose 56 percent to $17.3 million, fueled by the January acquisition of LSI Midwest Lighting, a fluorescent lighting manufacturer.
This month, LSI also completed its previously announced purchase of Retail Graphics Inc., a Woonsocket, R.I., maker of retail store graphics, for $3.3 million in cash and stock. Last year, Retail Graphics had sales of $4 million.
• Westwood Homestead Financial Corp.: Higher fee income helped the bank holding company report higher first-quarter earnings.
The parent of Westwood Homestead Savings Bank earned $330,000, or 16 cents a share, up from $306,000, or 12 cents a share, a year ago.
The thrift said more loan sales and service fees helped trigger a 49 percent gain in fee income.
Westwood Homestead, with assets of $130 million, operates branches in Westwood and Mount Adams.
Enquirer reporters Mike Boyer and Jeff McKinney contributed to this report.
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