Wiz Q3 Sales Down 21.5%; Losses Grow
By Jeff Malester -- TWICE, 11/11/2002
BETHPAGE, N.Y. — Following a restructuring of consumer electronics retailer The Wiz, begun in the third quarter, parent company Cablevision Systems reported a 21.5 percent pro forma third quarter drop in sales for continuing operations at its retail electronics segment.
The remaining 17 Wiz locations recorded an actual $66.9 million in the third quarter sales, down from a pro forma $85.2 million in the year-ago three months ending Sept. 30.
Cablevision, a major cable TV provider which also owns Madison Square Garden, the New York Knicks, the New York Rangers and Radio City Music Hall, said its loss for the 17 remaining Wiz stores was an adjusted $25 million in the third quarter. That is compared to an adjusted $14.5 million loss for the year-earlier period, with the actual loss being pegged at $28.2 million.
Cablevision's restructuring plan for The Wiz included closing 26 locations, reducing the retailer's workforce by 1,300, changing the compensation structure and renovating the remaining Wiz units. The plan, said Cablevision, is expected to bring The Wiz to a breakeven level in 2003.
The restructuring charge associated with the 26 Wiz closings in the third quarter totaled $9.5 million, related to severance payments and store shutdowns.
Net losses related to closed Wiz stores was reported as discontinued operations, net of tax, in Cablevision's consolidated statements of operations for the third quarter.
For the nine months, the continuing Wiz stores recorded a 15.2 percent pro forma decrease in revenue, hitting an actual $215.8 million in the period, ended Sept. 30, compared with a pro forma $254.4 million in the same three months in 2001.
Cablevision reported its loss for the remaining Wiz stores was an adjusted $62.4 million for the nine months, compared with the $44.1 million for the year-earlier period. Actual loss was $64.8 million.
Adjusted losses for The Wiz for the three- and nine-month periods stand for adjusted operating cash flow, or AOCF, which is defined by Cablevision as operating profit before depreciation and amortization, excluding the effects of long-term incentive and stock plans income or expense and restructuring charges.
Consolidated pro forma Cablevision revenue for the third quarter increased 6.2 percent, reaching $951.1 million, up from $895.6 million in the third quarter of 2001. Net loss for the three months from continuing operations was $51.8 million, compared with a net loss from continuing operations of $70.4 million year-on-year.
For the nine months, consolidated pro forma Cablevision revenue climbed 5.9 percent, to $3 billion, up from $2.8 billion in the same period last year. Net loss from continuing operations for the nine months was $392.6 million.
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