Margin-cutting to meet new competition, along with increased overhead and interest expenses, resulted in a fourth-quarter net loss for Sound Advice that was steep enough to produce a loss for the full fiscal year.
For the three months ended June 30 the Florida-based regional retailer had a loss of $745,000, against year-earlier earnings of $218,000, while sales rose 4.3% to $39.1 million from $37.4 million.
For all of fiscal 1995, Sound Advice showed a $481,000 net loss, as opposed to earnings of $1.73 million in fiscal 1994.
Sales, at $190.5 million were up 9% from the $174.8 million of the preceding year. Sound Advice said comparable-store sales for the year were up 5.9%.
In a statement, Sound Advice said its sales increases stemmed primarily from the introduction of personal computer products, the opening of a new store (its 21st) in Ft. Meyers and the relocation of an existing outlet in Hollywood.
For the quarter, Sound Advice’s gross margin was 28.7% of sales, down 3.7 points from the 32.3% margin in the same period last year. That drop, the retailer said, “reflected temporary margin pressures related to the grand opening of a national competitor”– presumably Incredible Universe — which when combined with increased SG&A expenses and higher borrowing costs produced the loss for the period.
Sound Advice’s interest expense more that doubled for the quarter and nearly tripled for the year. Additionally, the retailer stated, the results for the full year were after $597,000 in one-time pre-tax charges. They included a $400,000 write-down of the assessed value of management information systems and $197,000 write-off of expenses for the postponement of plans to enter the Washington/Baltimore market. Excluding those charges, Sound Advice’s full-year income from operations was $1.4 million, down 68.9% from the $4.5 million of fiscal 1994.
Separately, Sound Advice said its bank credit agreement has officially expired, but the company is currently engaged in negotiations to extend its existing bank credit facility. The current facility has been extended for a short period to enable the chain and its lender to work out terms for a permanent extension. Sound Advice said it has asked the Securities And Exchange Commission for an extension of the deadline for the filing of its annual report so it can include in it the finalized credit information.
Losses For Qtr., Full Year Posted At Sound Advice
Margin-cutting to meet new competition, along with increased overhead and interest expenses, resulted in a fourth-quarter net loss for Sound Advice that was steep enough to produce a loss for the full fiscal year.
For the three months ended June 30 the Florida-based regional retailer had a loss of $745,000, against year-earlier earnings of $218,000, while sales rose 4.3% to $39.1 million from $37.4 million.
For all of fiscal 1995, Sound Advice showed a $481,000 net loss, as opposed to earnings of $1.73 million in fiscal 1994.
Sales, at $190.5 million were up 9% from the $174.8 million of the preceding year. Sound Advice said comparable-store sales for the year were up 5.9%.
In a statement, Sound Advice said its sales increases stemmed primarily from the introduction of personal computer products, the opening of a new store (its 21st) in Ft. Meyers and the relocation of an existing outlet in Hollywood.
For the quarter, Sound Advice’s gross margin was 28.7% of sales, down 3.7 points from the 32.3% margin in the same period last year. That drop, the retailer said, “reflected temporary margin pressures related to the grand opening of a national competitor”– presumably Incredible Universe — which when combined with increased SG&A expenses and higher borrowing costs produced the loss for the period.
Sound Advice’s interest expense more that doubled for the quarter and nearly tripled for the year. Additionally, the retailer stated, the results for the full year were after $597,000 in one-time pre-tax charges. They included a $400,000 write-down of the assessed value of management information systems and $197,000 write-off of expenses for the postponement of plans to enter the Washington/Baltimore market. Excluding those charges, Sound Advice’s full-year income from operations was $1.4 million, down 68.9% from the $4.5 million of fiscal 1994.
Separately, Sound Advice said its bank credit agreement has officially expired, but the company is currently engaged in negotiations to extend its existing bank credit facility. The current facility has been extended for a short period to enable the chain and its lender to work out terms for a permanent extension. Sound Advice said it has asked the Securities And Exchange Commission for an extension of the deadline for the filing of its annual report so it can include in it the finalized credit information.
