AUSTIN, Texas – Marine retailer Travis Boats & Motors, Inc. (Nasdaq: TRVS) saw a decline in net sales for the fourth quarter and fiscal year ended September 30; however, the company also saw a decline in its net loss for the quarter and year, it reported in a statement today.
"Although it was a difficult year, our associates embraced our business plan objectives and I am pleased with the execution of our inventory sell-through, implementation of expense controls and our debt management," said Mark Walton, president of Travis Boats. "We continue to make meaningful progress on these and other key objectives."
Net and same store sales down for quarter
Net sales were $31,566,000 for the quarter ended September 30, compared to net sales of $40,644,000 for the same quarter of the prior fiscal year.
The retailer attributed the decline in net sales to operating fewer stores, a decline in comparable store sales and the decline in average retail prices due to the aggressive sell-through of non-current inventory.
Comparable store sales declined 17.4 percent (30 stores in base) for the quarter ended September 30.
For the quarter ended September 30, the company reported a net loss of $4,274,000 ($0.99 per basic and diluted share) after preferred stock dividends of $120,000. The company had a net loss of $8,699,000 ($2.01 per basic and diluted share), after preferred stock dividends of $120,000 for the same quarter of the prior fiscal year.
Fiscal year results reflect same trend
For the fiscal year ended September 30, net sales totaled $140,715,000, compared to net sales of $176,523,000 for the fiscal year ended September 30, 2002.
Comparable store sales declined 15.7 percent (30 stores in base) for the fiscal year ended September 30. The company had 30 and 34 stores in operation on September 30, 2003 and 2002, respectively.
The operation of fewer stores accounted for approximately $2,530,000 of the decline in net sales for the quarter and approximately $10,690,000 of the decline in net sales for the fiscal year ended September 30, respectively, according to the company.
For the fiscal year ended September 30, the company reported a net loss of $9,379,000. This compares to a net loss prior to the cumulative effect of accounting change, of $10,451,000 for the fiscal year ended September 30, 2002, after dividends of $187,000. Inclusive of the cumulative effect of accounting change, the company's net loss for the fiscal year ended September 30, 2002 was approximately $16,979,000.
The net loss for the quarter and fiscal year ended September 30, 2003 was due in part to the impact of the reduction in net sales and gross profit due to the accelerated sell-through of approximately $20 million in inventory, the operation of fewer store locations and the expenses of closing four store locations, Travis reported.
Travis continues store sale/leasebacks
The results for the quarter and fiscal year ended September 30, 2003 exclude the gain of approximately $1,100,000 resulting from the company completing sale/leaseback transactions on its Texas store locations in Austin and Dallas, according to Travis.
Both locations were sold to investors in market value transactions and leased back by the company in a series of long-term leases. Travis reported.
As a result of these transactions, the company will recognize a gain of approximately $1.1 million. For financial reporting, the gain will be deferred ratably over a period of approximately ten years and is not reflected in the results of operations as of September 30. Several other properties are also currently being marketed for sale/leasebacks.
Inventory sell-through met objectives
In mid March, Travis began implementation of a plan strategy that included acceleration of the sell-through of prior year and discontinued inventory. The sell-through resulted in a short-term adverse effect on the company's average retail prices and gross profits for the period of April - September of 2003, offset by a significant improvement in working capital from its inventory borrowing base requirements, Travis reported.
"The sell-through met our plan objectives in both the amount of aged inventory sold and in the incremental working capital of an estimated $2,500,000 realized by the company in the process," the company said. "As of this date, management believes the sell-through to be substantially complete and has developed additional controls and procedures to maintain the current status of its inventory."
Richard Birnbaum, chairman of Travis Boats said, "The last several months have been a rebuilding process as we reposition Travis for the future. Our initiatives related to inventory management and the sell-through of non- currents, operational excellence, and expense control are beginning to take hold. Looking forward, our focus on human capital, customer service, and marketing will add to this formula."
Travis Boats & Motors, Inc., is a multi-state superstore retailer of recreational boats, motors, trailers and related marine accessories in the southern United States. The company operates 30 store locations in Texas, Arkansas, Oklahoma, Louisiana, Alabama, Tennessee, Mississippi, Georgia and Florida under the name Travis Boating Center.
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