Contact: Walfrido A. Martinez
Senior Vice President and Chief Financial Officer
E&B Marine Inc.
(908) 819-7400
FOR IMMEDIATE RELEASE
Edison, N.J., November 1--E&B Marine Inc. (NASDAQ: EBMA)
reported today that sales increased 7.0 percent for the third
quarter of 1995. Due to expenses related to new stores and a tax
provision in 1995 instead of the tax benefit of $2,500,000
recognized in 1994, earnings per share decreased from the $.96
earned in the third quarter of 1994 to $.20 in 1995. The Company
also announced that it is attempting to simplify its capitalization
structure by offering to exchange up to 181,531 shares of the
Company's Common Stock for up to 1,032,418 warrants and options.
Finally, the Company announced that a Shareholders' Agreement among
a group of shareholders, including the Company's principal
shareholders, that participated in restructuring the Company's debt
in 1989 has been terminated allowing the group to freely transfer
their shares of common stock, including in open-market
transactions. To the Company's knowledge, these shareholders hold
shares of common stock constituting approximately two-thirds of the
issued and outstanding shares of common stock.
Sales of $29,367,000 for the third quarter ended September 30,
1995 increased $1,911,000 from the $27,456,000 recorded in the
third quarter ended September 24, 1994. Retail store sales
increased 9.0 percent from the third quarter of 1994. Sales in
stores opened during comparable periods (those opened at least a
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E&B Marine Inc.
(908) 819-7400
Page 2
year) in 1995 and 1994 decreased $327,000 or 1.4 percent. Mail-
order sales decreased $216,000 or 5.5 percent from the third
quarter of 1994. The increase in sales was primarily attributable
to the new retail stores opened subsequent to the third quarter of
1994. Comparable retail store sales for the third quarter of 1995
would have increased 6.5 percent and Mail-order sales would have
increased 2.0 percent from the third quarter of 1994 had fiscal
1994 been a 52 week year.
For the nine month period ended September 30, 1995 sales of
$91,278,000 increased $7,830,000 or 9.4 percent over the prior
year. Comparable retail store sales for the nine months ended
would have increased 1.9 percent from the same nine month period
ended September 24, 1994 had fiscal 1994 been a 52 week year.
Net income before taxes for the third quarter of 1995 was
$1,370,000 compared to $1,712,000 reported in the third quarter of
1994. Net income after taxes in 1995 was $821,000 after a tax
provision of $549,000. In 1994, the provision for income taxes was
a benefit of $2,500,000. Net income per share in the third quarter
of 1995 was $.20 compared to a net income per share of $.96 in
1994. The weighted average number of outstanding shares for the
third quarter of 1995 was 3,744,000 versus 3,692,000 for the
comparable 1994 period.
Selling, general and administrative expenses increased 12.9
percent from the comparable third quarter in 1994. As a percentage
of sales, selling, general and administrative expenses increased to
21.9 percent in 1995 from 20.7 percent in 1994. During the third
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E&B Marine Inc.
(908) 819-7400
Page 3
quarter of 1995, additional expenses related to the new retail
stores were incurred.
The Company is offering certain of its warrant and option
holders the opportunity to exchange certain warrants and options
for shares of the Company's common stock based on a value of such
warrants and options determined by an independent investment
banking firm and approved by a Special Committee of the Board of
Directors of the Company, and as authorized by the Company's Board
of Directors. The Company stated that it has received indications
that a significant portion of the warrants and options affected
will be exchanged, including those held by the Company's largest
shareholder. If all options and warrants included in this offer
were exchanged, the resulting noncash compensation expense net of
taxes attributed to the exchange would reduce the earnings per
share for the Company by approximately $.08 per share.
The exchange offer will be made only by letter to the affected
warrant and option holders. The common stock offered in exchange
for the affected warrants and options has not been and will not be
registered under the Securities Act of 1933 and may not be sold in
the United States absent registration thereof under the Securities
Act of 1933 or absent an applicable exemption from registration
requirements thereunder.
Kenneth G. Peskin, the Company's Chairman and Chief Executive
Officer, said: "I am pleased to announce that our second store in
Chicago's metropolitan area in Highland Park has already been
opened and our Babylon, New York store has been relocated to West
Islip, Long Island to a larger and more advantageous location."
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E&B Marine Inc.
(908) 819-7400
Page 4
E&B Marine Inc. is one of the nation's largest direct-mail
merchandisers and specialty retailers of marine supplies and
apparel with 61 retail outlets and a catalog operation.
* * * * * *
November 1, 1995
E&B MARINE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
PERIODS ENDED SEPTEMBER 30, 1995 AND SEPTEMBER 24, 1994
UNAUDITED
Dollars in Thousands, NINE MONTHS THREE MONTHS
except per share amounts 1995 1994 1995 1994
------- -------- ------- -------
Net sales $91,278 $83,448 $29,367 $27,456
Cost of goods sold excluding
amortization and depreciation 65,658 59,881 20,997 19,518
------- ------- ------- -------
Gross profit 25,620 23,567 8,370 7,938
Selling, general and
administrative expenses 19,288 16,978 6,421 5,689
Depreciation and amortization 847 924 277 328
------- ------- ------- -------
Income from operations before
interest and income taxes 5,485 5,665 1,672 1,921
Interest expense 1,068 828 302 209
------- ------- ------- -------
Income before income taxes 4,417 4,837 1,370 1,712
Income taxes 1,770 (2,500) 549 (2,500)
------- ------- ------- -------
Net Income $2,647 $7,337 $821 $4,212
======= ======= ======= =======
Per share amounts:
Net Income $0.64 $1.69 $0.20 $0.96
Weighted average number
of shares outstanding 3,729,000 3,690,000 3,744,000 3,692,000
========= ========= ========= =========
(1) See accompanying note.
1: Income per Common Share
The Company has computed Income per Common Share on the basis of
the weighted average number of Common Shares and common equivalent
shares outstanding during the period, in accordance with the
modified treasury stock method. This method assumes that common
stock equivalents (options and warrants) are exercised and treasury
shares are assumed to be purchased (not to exceed 20% of the
weighted average number of Common Shares outstanding) from the
proceeds using the average market price for the period. Any excess
proceeds not utilized for the purchase of treasury shares are
assumed to reduce outstanding debt with an appropriate reduction of
interest expense. Proceeds which exceed outstanding debt are
assumed to be invested in government securities. Under such
assumptions, for the nine months ended September 30, 1995 and
September 24, 1994 and for the three months ended September 30,
1995 and September 24, 1994, 827,000, 814,000, 865,000 and 820,000
incremental Common Shares, respectively, have been added to the
weighted average number of shares outstanding and net interest has
been adjusted by approximately $280,000, $294,000, $105,000 and
$99,000, respectively. The 1995 interest amounts have been tax
effected at 40 percent.
No fully diluted per share amounts are shown in 1995 and 1994 since
the closing market price is less than the average market price for
the period.