Dairy Mart Convenience Stores, Inc. today announced financial results for its first quarter ended April 29, 2000.
Despite continued strong growth in revenues in what historically has been a seasonably slow quarter, the Company reported reduced operating results consistent with overall industry trends.
Go deeper with GlobalData
As previously announced, the Company expected lower operating results in its first quarter. Dairy Mart, and the industry overall, have been impacted by three significant operating trends: 1) lower gasoline margins; 2) lower merchandise gross profit margins; and 3) continuing increases in operating expenses, related primarily to store labor. The Company incurred additional expenses of $0.5 million in the first quarter associated with the sale or closing of 20 non-strategic or underperforming stores.
Revenues for the first quarter increased 37%, to $172.9 million from $126.3 million for the same period last year, marking the sixth consecutive quarter of double-digit revenue growth. Merchandise sales of company-operated stores open at least a year increased 10.2% in the quarter. Gasoline revenues increased 77%, to $83.0 million compared with $46.8 million in the prior-year quarter. The average selling price of gasoline increased 39 cents per gallon, and total gallons of gasoline sold increased 27% percent, to 59.7 million gallons from 46.9 million gallons in the same quarter last year.
Net loss for the quarter was $2.9 million, or $0.59 per share, compared with net income of $0.1 million, or $0.02 per share, in the prior year. Results for the first quarter of last year, however, included a non-recurring gain associated with the sale of certain assets. Exclusive of this gain, the Company incurred a net loss of $0.6 million, or $0.11 per share. On an operating basis, earnings before interest, taxes, depreciation and amortization (EBITDA) for the 2001 first quarter were $1.4 million compared with $4.6 million in the prior year.
“The first quarter is typically a slow quarter for us,” said Robert B. Stein, Jr., Dairy Mart’s Chairman, President and Chief Executive Officer. “This year’s first quarter was especially difficult because gasoline margins were 3 cents per gallon below last year. On our volume, we estimate gasoline gross profits for the quarter were down $1.7 million from normal levels. Second-quarter margins are showing significant improvement, however, as the retail price of gasoline finally catches up to the quickly escalating cost of product.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“We continue to drive customer traffic to our stores, as evidenced by the growth in comparable-store sales and total gasoline gallons sold,” Stein added. “Additionally, we continue to place greater emphasis on higher-margin food service products.”
As previously announced, Dairy Mart has retained the investment banking firm of Morgan Keegan & Company, Inc. to explore all strategic options, including the possible sale of the entire Company.
Dairy Mart Convenience Stores, Inc. was named “Convenience Store Chain of the Year” in 1999 by Convenience Store Decisions magazine. Dairy Mart owns or operates approximately 600 retail stores in seven states located in the Midwest and Southeast. Through consulting and licensing agreements, the Company is also affiliated with more than 200 stores in Korea and approximately 400 locations in Malaysia. For more information, visit Dairy Mart’s web site at www.dairymart.com.
Any statements contained in this release that are not historical facts, including those relating to future operating results; improved gasoline and other gross margins; and possible strategic alternatives of the Company, including possible sale of the Company, that may be considered forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially. Factors that could cause actual results to differ from those forward-looking statements include competition, general economic conditions, current and anticipated gasoline market conditions and the impact on anticipated gasoline margins, the ability to find one or more suitable buyers for individual stores or the Company as a whole at acceptable prices, the ability of such buyers to finance the store purchases or the Company as a whole and other factors discussed in periodic reports filed by the Company with the Securities and Exchange Commission.
(Table Follows)
Dairy Mart Convenience Stores, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)
FOR THE FISCAL
QUARTER ENDED
———————————-
April 29, May 1,
2000 1999
———————————————————————-
Revenues $ 172,934 $ 126,292
Cost of goods sold and expenses:
Cost of goods sold 137,411 92,953
Operating and administrative expenses 37,736 30,354
Interest expense 3,126 2,790
————– ————
178,273 126,097
————– ————
Income (loss) before income taxes (5,339) 195
Benefit from (provision for) income taxes 2,458 (98)
————– ————
Net income $ (2,881) $ 97
————– ————
————– ————
Earnings per share
Basic $ (0.59) $ 0.02
Diluted $ (0.59) $ 0.02
Weighted average number of shares
Basic 4,896 4,855
Diluted 4,903 4,891
AMEX TRADING SYMBOL – DMC
