SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 3, 1995
PCA INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
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<CAPTION>
<S> <C> <C>
North Carolina 0-8550 56-0888429
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
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815 Matthews-Mint Hill Road
Matthews, North Carolina 28105
(Address of Principal Executive Offices)
(Zip Code)
(704) 847-8011
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former name or address, if changed from last report)
This filing contains 5 pages.
The exhibit index appears on page 4.
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Item 5. Other Events.
PCA International, Inc. issued a press release on February 3,
1995, a copy of which is attached hereto as Exhibit 99, and the
information set forth in such press release is incorporated herein by
reference.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: February 3, 1995
PCA INTERNATIONAL, INC.
By: /s/ John Grosso
John Grosso
President
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Exhibit Index
Exhibit No. Exhibit Page No.
99 Press release of PCA 5
International, Inc. dated
February 3, 1995
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February 3, 1995
TO OUR SHAREHOLDERS
Now that our photography and sales activities for the fourth quarter and
year ended January 29, 1995 are complete, we are in a position, prior to
the completion of our year-end audit, to estimate our results with some
accuracy.
For the quarter ended January 29, 1995, we expect to report per share
earnings from continuing operations will be up approximately 72% to
approximately $.43 a share compared to $.25 a share in the comparable
quarter of the prior year. For the six months ended January 29, 1995,
we believe earnings per share from continuing operations will increase
by 70% to approximately $.56 versus $.33 in the prior year. The gains
achieved in the second half made up for most of the first half shortfall
of $.29 a share caused by the Digital conversion start-up expenses and
the elimination of all traveling promotions. As a result, for the full
year ended January 29, 1995, we estimate earnings per share from
continuing operations will be approximately $.50 per share as compared
to $.56 per share in the prior full year and net income will be
approximately $.55 a share as compared to $.31 a share in 1993.
In our letter to you in the annual report, we characterized 1994 as a
year of transition. Our objectives were to complete the installation of
digital technology into all of our studios and to develop the marketing
and service capabilities to bring home the benefits of digital to our
customers. We had hoped to be well enough along in these programs to
enter 1995 with significant momentum.
Those goals were largely achieved. We completed the digital
installation by mid-year while at the same time opening 130 new
permanent studios. We began a new, company-wide, customer service
program in the third quarter. And during the peak Christmas season we
introduced a uniquely different three-pose advertised special offer to
our customers which emphasized the variety and benefits which our
digital imaging technology provides. The capital investment required to
achieve these goals, which over the past three years has exceeded $50
million, was funded principally from working capital, and we expect to
end the year with no long-term debt and less than a million dollars of
short-term debt.
The effect of these changes became evident in the second half of this
year. The major increase in earnings estimated in the fourth quarter
was achieved by increasing our average sales per customer by almost 50%
in the quarter. Free to choose exactly the portraits they wanted, our
customers in Kmart spent over $50 on average in both the third and
fourth quarters. We believe this was the highest average in the
children's portrait industry. Even more significant, the estimated
fourth quarter earnings gain was achieved with approximately 13% lower
sales. Part of the sales decline resulted from our abandonment of
traveling, but a major portion was because of fewer customers in our
permanent studios. This was by design. We decided to emphasize the
enhanced quality of the overall portrait experience in our Digital
Studios by offering more choice and service. We did not hire large
numbers of temporary seasonal field personnel and were able to service
our customers with experienced, full-time PCA employees. The results in
the fourth quarter seem to validate this strategy.
We shall report to you more fully our results for the year and our goals
for 1995 after our audit is complete. Because of the importance of the
fourth quarter to our year and the significant changes which have
occurred, we felt it appropriate to share preliminary results with you
when they became apparent.
Joseph H. Reich John Grosso
Chairman President
of the Board Chief Executive Officer
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