-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VZvNOk2vTi+BO+pSlr7AlGJQIzs8zdmFg1s7Xip0IL4pWQ/SISnkPNIgfvmT9Zjm Cz30d3VfT/5Tpzahxr15xQ== 0000076744-01-000003.txt : 20010123 0000076744-01-000003.hdr.sgml : 20010123 ACCESSION NUMBER: 0000076744-01-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010111 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010111 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAYLESS CASHWAYS INC CENTRAL INDEX KEY: 0000076744 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-LUMBER & OTHER BUILDING MATERIALS DEALERS [5211] IRS NUMBER: 420945849 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08210 FILM NUMBER: 1506860 BUSINESS ADDRESS: STREET 1: 800 NW CHIPMAN ROAD STREET 2: P O BOX 648001 CITY: LEES SUMMIT STATE: MO ZIP: 64064-8001 BUSINESS PHONE: 8163476000 8-K 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 11, 2001 PAYLESS CASHWAYS, INC. (Exact name of registrant as specified in its charter) DELAWARE 0-4437 42-0945849 (State or other jurisdiction Commission File Number) (IRS Employer of incorporation) Identification No.) 800 NW Chipman Road, Suite 5900 P.O. Box 648001 Lee's Summit, Missouri 64064-8001 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (816) 347-6000 Not applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 7. Financial Statements and Exhibits. (c) EXHIBITS. The following exhibits are filed herewith: 99.1 Press Release dated January 10, 2001. Item 9. Regulation FD Disclosure. On January 10, 2001, the Company issued a press release announcing its operating results for the fourth quarter and fiscal year ended November 25, 2000. A copy of this press release is attached as Exhibit 99.1 hereto and incorporated herein by reference. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ate: January 11, 2001 PAYLESS CASHWAYS, INC. By:_________________________________________ Richard B. Witaszak, Senior Vice President - Finance and Chief Financial Officer EX-99.77Q1 2 0002.txt PRESS RELEASE CONTACT: Richard B. Witaszak Sr. V.P.- Finance and CFO (816) 347-6974 webinvestor@payless.cashways.com PAYLESS CASHWAYS, INC. 800 N.W. Chipman Road o Suite 5900 Lee's Summit, Missouri 64063 www.payless.cashways.com OTC Bulletin BOard: PCSH PAYLESS CASHWAYS, INC. REPORTS 89% IMPROVEMENT IN FISCAL YEAR 2000 PRO FORMA OPERATING RESULTS LEE'S SUMMIT, Mo.-- January 10, 2001 -- Payless Cashways, Inc. (OTC Bulletin Board: PCSH), a full line building materials and finishing products company focusing on the professional builder, remodel and repair contractor, institutional buyer, and project oriented consumer, today reported operating results for the fourth quarter and fiscal year ended November 25, 2000. - -------------------------------------------------------------------------------------------------------------------------
Summary of Financial Highlights (Pro Forma excluding Special Charges) (amounts in thousands except percentages and per share amounts) ------------------------------------------- ------------------------------------------ Fourth Quarter Ended Fiscal Year Ended ------------------------------------------- ------------------------------------------ ---------------- --------------- ---------- ---------------- -------------- ---------- Nov. 25, 2000 Nov. 27, 1999 Change Nov. 25, 2000 Nov. 27, 1999 Change ---------------- --------------- ---------- ---------------- -------------- ---------- Net Sales $ 332,125 $ 434,604 - 24 % $ 1,492,783 $ 1,811,365 - 18 % Gross Margin $ 91,788 $ 116,005 - 21 % $ 406,056 $ 481,247 - 16 % SG&A $ 72,541 $ 97,130 - 25 % $ 340,474 $ 420,382 - 19 % EBITDA $ 19,573 $ 19,270 + 2 % $ 67,646 $ 62,847 + 8 % Income/(Loss) Before Taxes $ 1,960 $ 240 + 717 % $ (3,973) $ (9,943) + 60 % Net Income/(Loss) $ 1,003 $ 141 + 611 % $ (652) $ (5,837) + 89 % Net Income / (Loss) Per Common Share $ .05 $ .01 + 611 % $ (.03) $ (.29) + 89 % Wtd. Avg. Shares Outstanding 20,000 20,000 -- 20,000 20,000 -- - ---------------------------------- ---------------- --------------- ---------- ---------------- -------------- ----------
KEY DEVELOPMENTS - FOURTH QUARTER & FISCAL 2000 o 10th consecutive quarter of EBITDA improvement. o Quarterly EBITDA ratio of 5.9% highest achieved in last 16 quarters. o Full Year EBITDA ratio improvement of 100 basis points. o Second consecutive year of gross margin rate improvement. o Lowest annual SG&A rate since 1994. o Pro forma net loss of $0.7 million best performance since 1994. "Fiscal 2000 was a year of continued improvement for our Company. We made tremendous progress in the complex process of reengineering our business model and our profit model. At the same time, in a very difficult operating environ- ment where we experienced a dramatic fall in commodity prices, rising interest costs, and the negative sales impact of transitioning from a mass advertising format to a targeted marketing approach, our bottom line results continued to improve over the prior year. President & CEO Millard Barron Fourth Quarter 2000 Results The Company reported fourth quarter pro forma net income of $1.0 million compared to $0.1 million in the fourth quarter of the previous year, excluding 2000 and 1999 non-routine and special charges discussed below. Net loss after non-routine and special charges was $18.9 million for the fourth quarter of 2000 compared to a loss of $2.7 million in 1999. Pro forma earnings per share for the fourth quarter of 2000 was $.05 compared to $.01 in the fourth quarter of 1999. Loss per common share after non-routine and special charges in the fourth quarter of 2000 was $0.94 compared to a loss per common share of $0.14 in the same quarter of 1999. Pro forma earnings before interest, taxes, depreciation, and amortization (EBITDA), were $19.6 million or 5.9% of sales for the 2000 fourth quarter, compared to $19.3 million or 4.4% of sales for the same period last year. Fourth quarter 2000 Pro-forma EBITDA benefited from a $1.1 million reversal of items expensed in earlier quarters and reflected as special charges in the fourth quarter and a $0.2 million LIFO credit. Comparatively, fourth quarter 1999 Pro-forma EBITDA benefited from a $1.6 million LIFO credit. Net sales for the fourth quarter of 2000 were $332.1 million, a 24.5% same-store decrease and a 23.6% decrease in total, versus fourth quarter of 1999 sales of $434.6 million. On a same-store sales basis, sales to the professional customer decreased 19.0%, and sales to the DIY customer decreased 31.4% for the quarter. Same store sales were negatively impacted by significant deflation in lumber and wallboard prices, reductions in advertising activity and an increase in new competition. The Company is in the process of closing 22 existing retail locations. Accordingly, in the fourth quarter, the Company recorded a special charge of $20.4 million for severance, fixed asset impairment and disposal costs and lease commitments, and a non-routine $11.8 million gross margin charge for inventory liquidation at these stores. Last year, the Company also recorded a special charge in the fourth quarter of $1.1 million and a non-routine $0.5 million gross margin charge related to inventory liquidation at a store it closed. Fiscal 2000 Operating Results For fiscal 2000, the Company reported a pro forma net loss of $0.7 million, or $0.03 per share, compared to a pro forma net loss of $5.8 million, or $0.29 per share, for fiscal 1999, excluding non-routine and special charges and credits affecting both periods. Net loss for fiscal 2000 after non-routine and special charges was $20.6 million, or $1.03 per share, versus a net loss of $8.1 million, or $0.41 per share, for fiscal 1999. The net loss for 2000 includes fourth quarter special and non-routine charges associated with the closing of 22 retail locations as detailed above. The net loss for fiscal 1999 includes non-routine and special charges for store closing and administrative staff elimination costs recorded in the second and fourth quarters, accelerated depreciation charges recorded in the third and fourth quarters, a pension benefit curtailment gain recorded in the second quarter, and an extraordinary charge related to the early extinguishment of debt recorded in the fourth quarter. Net sales in fiscal year 2000 were $1.5 billion, a decrease of 15.1% on a same-store sales basis and 17.6% in total, compared with last year's sales of $1.8 billion. On a same-store sales basis, sales to the professional customer declined 9.9% and sales to the DIY customer decreased 21.2%, largely due to significant deflation in commodity prices, reductions in advertising activity and new competition. Pro forma EBITDA for fiscal year 2000 was $67.6 million, compared to $62.8 million during fiscal year 1999. EBITDA for fiscal 2000 benefited from a $0.2 million LIFO credit compared to a $0.9 million LIFO credit in fiscal 1999. Payless Cashways Management Comments Payless Cashways President & CEO Millard Barron commented, "Fiscal 2000 was a year of continued improvement for our Company. We made tremendous progress in the complex process of reengineering our business model and our profit model. At the same time, in a very difficult operating environment where we experienced a dramatic fall in commodity prices, rising interest costs, and the negative sales impact of transitioning from a mass advertising format to a targeted marketing approach, our bottom line results continued to improve over the prior year. 2000 was our second consecutive year with an increase in gross margin after eight years of decline, and our SG&A expense rate was the best performance since 1994." Mr. Barron continued, "We continue to strengthen our team and our culture, while we improve overall efficiencies and make the hard decisions necessary to eliminate under-producing assets. We have enhanced existing businesses as well as developed new ones, invested in technology for improvements today and in the future, and reorganized key resources around our mission statement and target customers. Our pro-forma bottom line performance is the best since 1994, a result of the continuing support of our customers, associates, vendors, lenders and shareholders. I look forward to 2001 with confidence and optimism." About the Company Payless Cashways, Inc. is a full-line building materials and finishing products company focusing on the professional builder, remodel and repair contractor, institutional buyer, and project-oriented consumer. The Company operates 128 retail stores and 5 Builders Resource facilities in 17 states located in the Midwestern, Southwestern, Pacific Coast and Rocky Mountain areas. The Company also operates 12 distribution and manufacturing facilities in 7 states. The stores operate under the names Payless Cashways, Furrow, Lumberjack, Hugh M. Woods, Knox Lumber and Contractor Supply. Forward-Looking Statements This paragraph is included in this release to comply with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are certain important factors that could cause results to differ materially from those anticipated by the forward-looking statements made above. Investors are cautioned that all forward-looking statements involve risk and uncertainty. Among the factors that could cause results to differ materially are the following: competitor activities; stability of customer demand; weather; stability of the work force; supplier and lender support; consumer spending; interest rates; new and existing housing activity; commodity prices-specifically lumber and wallboard; customer and product mix; growth of certain market segments; an excess of retail space devoted to the sale of building materials and the success of the Company's strategy. Additional information concerning these and other factors is contained in the Company's SEC filings, which are available by contacting the Company or on the Company's web site, payless.cashways.com. PAYLESS CASHWAYS, INC. Fourth Quarter Ended and Year Ended November 25, 2000 Pro Forma Operating Data (Unaudited) (a) (b) (In thousands, except percentages and per share amounts) Thirteen Weeks Ended
November 25, 2000 November 27, 1999 ------------------------- ---------------------- Amount Percent Amount Percent ----------- -------- -------- ------- Net sales $ 332,125 100.0 % $ 434,604 100.0 % Cost of merchandise sold 240,337 72.4 318,599 73.3 ----------- ------ ----------- ------ Gross margin 91,788 27.6 116,005 26.7 Selling, general and administrative 72,541 21.8 97,130 22.4 Provision for depreciation and amortization 7,389 2.2 9,424 2.2 Other income (326) (.1) (395) (.1) ------------ ----- ----------- ------ Operating Income 12,184 3.7 9,846 2.2 Interest expense 10,224 3.1 9,606 2.2 ----------- ------ ----------- ------ Income before income taxes 1,960 0.6 240 -- Federal and state income taxes 957 0.3 99 -- ----------- ------ ----------- ------- NET INCOME $ 1,003 0.3 % $ 141 -- % =========== ====== ============ ======= Net income per common share-basic $ 0.05 $ 0.01 =========== =========== Weighted average common shares outstanding 20,000 20,000 =========== =========== Fifty-Two Weeks Ended ------------------------------------------------------- November 25, 2000 November 27, 1999 ------------------------- ------------------------ Amount Percent Amount Percent ----------- -------- ---------- ------- Net sales $ 1,492,783 100.0 % $1,811,365 100.0 % Cost of merchandise sold 1,086,727 72.8 1,330,118 73.4 ----------- -------- ----------- ------ Gross margin 406,056 27.2 481,247 26.6 Selling, general and administrative 340,474 22.8 420,382 23.2 Provision for depreciation and amortization 30,067 2.0 37,027 2.0 Other income (2,064) (.1) (1,982) (.1) ----------- ------ ----------- ------ Operating Income 37,579 2.5 25,820 1.5 Interest expense 41,552 2.8 35,763 2.0 ----------- ------ ----------- ------ Loss before income taxes (3,973) (.3) (9,943) (.5) Federal and state income taxes (3,321) (.2) (4,106) (.2) ---------- ------ ----------- ------ NET LOSS $ (652) (.1) % $ (5,837) (.3) % ========== ====== =========== ====== Net loss per common share-basic $ (0.03) $ (0.29) ========== =========== Weighted average common shares outstanding 20,000 20,000 ========== ===========
[FN] (a) The pro forma operating data for fiscal 2000 excludes a fourth quarter special charge for store closings and associated costs of $20.4 million. It also excludes a non-routine fourth quarter margin charge for inventory liquidation at these closing stores of $11.8 million. (b) The pro forma operating data for fiscal 1999 excludes $2.0 million and $1.1 million for fourth and third quarter depreciation charges, respectively, related to the accelerated depreciation of certain leasehold improvements and assets related to closed stores. Additionally, it excludes a fourth and second quarter special charge for store closings and costs associated with the elimination of administrative staff of $1.1 million and $5.2 million, respectively. It also excludes a fourth and second quarter margin charge for inventory liquidation at these closing stores of $.5 million and $3.4 million, respectively. A second quarter special credit of $10.6 million, which represents a pension benefit curtailment gain recorded as a result of freezing benefits under the Company's pension plan, is excluded from the 1999 pro forma operating data. A fourth quarter $.7 million extraordinary item representing losses on early extinguishment of debt is also excluded from the 1999 pro forma operating data. PAYLESS CASHWAYS, INC. Fourth Quarter and Year Ended November 25, 2000 Operating Data (Unaudited) (In thousands, except percentages and per share amounts) Thirteen Weeks Ended
------------------------------------------------------- November 25, 2000 November 27, 1999 ------------------------- ------------------------- Amount Percent Amount Percent ----------- -------- ----------- ------- Net sales $ 332,125 100.0 % $ 434,604 100.0 % Cost of merchandise sold 252,137 75.9 319,099 73.4 ----------- -------- ----------- ------ Gross margin 79,988 24.1 115,505 26.6 Selling, general and administrative 72,541 21.8 97,130 22.4 Provision for depreciation and amortization 7,389 2.2 11,445 2.6 Special charges 20,400 6.2 1,085 .2 Other income (326) (.1) (395) (.1) ------------ ------ ----------- ------ Operating Income (20,016) (6.0) 6,240 1.5 Interest expense 10,224 3.1 9,606 2.2 ----------- ------ ----------- ------ Loss before income taxes (30,240) (9.1) (3,366) (.7) Federal and state income taxes (11,344) (3.4) (1,390) (.3) ---------- ------ ----------- ------ Loss before extraordinary items (18,896) (5.7) (1,976) (.4) Extraordinary items -- -- 729 .2 ----------- ------ ----------- ------ NET LOSS $ (18,896) (5.7) % $ (2,705) (.6) % ========== ====== ========= ====== Net income per common share-basic $ (0.94) $ (0.14) =========== =========== Weighted average common shares outstanding 20,000 20,000 ========== =========== Fifty-Two Weeks Ended ------------------------------------------------------- November 25, 2000 November 27, 1999 ------------------------ ------------------------- Amount Percent Amount Percent ----------- -------- ----------- ------- Net sales $ 1,492,783 100.0 % $ 1,811,365 100.0 % Cost of merchandise sold 1,098,527 73.6 1,333,968 73.6 ----------- -------- ----------- ------ Gross margin 394,256 26.4 477,397 26.4 Selling, general and administrative 340,474 22.8 420,382 23.2 Provision for depreciation and amortization 30,067 2.0 40,167 2.2 Special charges (credits), net 20,400 1.3 (4,315) (.2) Other income (2,064) (.1) (1,982) (.1) ----------- ------ ----------- ------ Operating Income 5,379 .4 23,145 1.3 Interest expense 41,552 2.8 35,763 2.0 ----------- -------- ----------- ------ Loss before income taxes (36,173) (2.4) (12,618) (.7) Federal and state income taxes (15,622) (1.0) (5,211) (.3) ---------- -------- ----------- ------- Loss before extraordinary items (20,551) (1.4) (7,407) (.4) Extraordinary items -- -- 729 -- ---------- -------- ----------- ------ NET LOSS $ (20,551) (1.4) % $ (8,136) (.4)% ==========- ======== =========== ====== Net loss per common share-basic $ (1.03) $ (.41) ========== =========== Weighted average common shares outstanding 20,000 20,000 ========== ===========
PAYLESS CASHWAYS, INC. Condensed Balance Sheets (Unaudited) (a) (In thousands)
November 25, November 27, 2000 1999 ------------- ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,485 $ 1,111 Merchandise inventories 311,489 349,332 Prepaid expenses and other current assets 19,246 22,013 Income taxes receivable -- 679 ------------- ------------- TOTAL CURRENT ASSETS 332,220 373,135 OTHER ASSETS Real estate held for sale 3,785 8,851 Deferred financing costs 3,051 3,944 Other 3,090 1,549 LAND, BUILDINGS, EQUIPMENT & SOFTWARE, NET 335,512 340,912 ------------- ------------- $ 677,658 $ 728,391 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $ 10,181 $ 3,265 Trade accounts payable 38,633 51,480 Other current liabilities 76,537 73,880 Income taxes payable 927 1,851 Deferred income taxes 5,510 2,157 ------------- ------------- TOTAL CURRENT LIABILITIES 131,788 132,633 LONG-TERM DEBT, less portion classified as current liability 363,432 374,154 NON-CURRENT LIABILITIES 49,692 68,307 SHAREHOLDERS' EQUITY Common stock 200 200 Additional paid-in capital 183,600 183,600 Accumulated deficit (51,054) (30,503) ------------- ------------ TOTAL SHAREHOLDERS' EQUITY (b) 132,746 153,297 ------------- ------------- $ 677,658 $ 728,391 ============= =============
[FN] (a) Certain reclassifications have been made to the 1999 financial statements to conform to the 2000 presentation. (b) The covenant included in the 1999 Credit agreement with Congress Financial regarding minimum "adjusted net worth" excludes the effects of certain non- cash charges and credits. The cumulative amount of such non-cash charges at November 25, 2000 was $11.6 million. -----END PRIVACY-ENHANCED MESSAGE-----