Sound Advice, Inc. reports 1996 first quarter results

Business Wire, Nov 14, 1995

DANIA, Fla.--(BUSINESS WIRE)--Nov. 14, 1995--Sound Advice, Inc. (Nasdaq/NNM:SUND) today reported financial results for the fiscal 1996 first quarter ended September 30, 1995. Net sales totaled $44,165,000, compared to $46,721,000 in the fiscal 1995 period. Sound Advice reported a net loss for the first quarter of $757,000, or $0.20 per share. In the corresponding year-ago period, the Company earned $436,000, or $0.12 per share.

Results for the quarter reflected decreased store traffic in August due to weather- related events, including Hurricane Erin. The storm coincided with Sound Advice's annual "scratch and dent" sale, typically a popular event among customers. Results were affected to a lesser extent by increased competition from national electronics retailers, particularly in certain of Sound Advice's South Florida market areas. These retailers compete with Sound Advice primarily on lower-end electronic products which comprise a smaller percentage of the Company's product mix as compared to its competitors. As a result of the weather and competition factors, Sound Advice's first quarter comparable store net sales decreased 10.8% from the year-ago period. However, September same-store sales increased 4.5%, indicating the temporary effect of the weather problems.

Sound Advice's gross profit margin decreased to 28.6% of net sales for the fiscal 1996 first quarter, compared to 31.1% in the year-ago quarter. The decrease was the result of the inclusion of personal computers to the product mix in the recent quarter, as well as the result of the Company selling at reduced margins certain lower-end electronic products in order to eliminate them from the Company's product mix. Selling, general and administrative expenses decreased $192,000 for the fiscal 1996 first quarter over the year ago figure, due largely to reduced commissions on decreased sales and decreased depreciation and amortization expenses.

Peter Beshouri, Chairman and CEO, commented, "The first quarter was difficult for Sound Advice, as a challenging overall retailing environment was exacerbated by unusually severe weather conditions. However, we are encouraged by the stability of margins in our core higher-end audio, video and mobile electronics lines, as well as the rebound in September comparable store sales. We remain optimistic about the upcoming holiday season."

Sound Advice, Inc. is a specialty retailer of a broad range of high quality, upscale entertainment and consumer electronics products. It currently operates 21 stores in the South Florida, Orlando, Tampa/St. Petersburg, Ft. Myers and Jacksonville markets.

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