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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) October 28, 1997
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HomeBase, Inc.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
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<S> <C>
1-10259 33-0109661
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(Commission File number) (I.R.S. Employer Identification No.)
Support Center Offices 3345 Michelson Drive, Irvine, California 92715
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (714) 442-5000
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(Former name or former address, if changed since last report)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
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On October 28, 1997, HomeBase, Inc. ("HomeBase") issued a press release
in the form attached hereto as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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c. Exhibits
99.1 October 28, 1997 Press Release of HomeBase.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be filed on its behalf by
the undersigned hereunto duly authorized.
Date: October 28, 1997
HomeBase, Inc.
/s/ Allan P. Sherman
By______________________________
Allan P. Sherman
President and Chief Executive Officer
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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CONTACT: Suki Shattuck, Director of Investor Relations
HomeBase, Inc.
(714) 442-5448
Roger S. Pondel/Michele Feller
Pondel Parsons & Wilkinson
(310) 207-9300
HOMEBASE ANNOUNCES PRELIMINARY THIRD QUARTER RESULTS
INCLUDING A NON-RECURRING CHARGE TO CLOSE THREE STORES;
PLANS TO RAISE $100 MILLION TO FUND NEW STORE GROWTH
IRVINE, California -- October 28, 1997 - In a major change in strategy,
HomeBase, Inc. (NYSE: HBI) today announced that it is accelerating its store
remodeling program and expects to raise $100 million to fund an expanded new
store opening program. In connection with this strategy, the company will close
three unprofitable stores and take a related, non-recurring after-tax charge of
approximately $16.5 million in the third quarter of the current fiscal year.
Exclusive of the non-recurring charge, the company expects to report net
income of approximately $6.0 million, or $.15 per share, fully diluted, for the
third quarter ended October 25, 1997. After the non-recurring charge, HomeBase
expects to report a net loss of approximately $10.5 million, or $.27 per share,
fully diluted, compared with pro forma net income of $5.9 million, or $.16 per
share, fully diluted, for the third fiscal quarter of last year. HomeBase plans
to announce actual results for its third fiscal quarter on November 11, 1997.
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HOMEBASE ANNOUNCES PRELIMINARY THIRD QUARTER RESULTS PAGE 2
HomeBase's sales for the third quarter totaled $368.4 million versus
$366.4 million a year ago. Comparable store sales were down 1.2% from last
year's third quarter, but improved in trend over the preceding quarter.
Allan P. Sherman, president and chief executive officer, said, "The board
of directors has approved an accelerated growth strategy that includes
remodeling the remaining 17 stores in the company's remodel program over the
next six months (barring any unforeseen permit issues), rather than the
previously planned two years. This will allow us to maximize the impact of
advertising HomeBase's new prototype design in all our markets and capitalize on
opportunities during the company's peak spring and summer selling season.
Although no assurances can be given regarding the new stores, remodeled
HomeBase stores have historically achieved average first-year sales trend
improvements of 10% and 100 basis point improvement in selling margins."
The company's new strategy includes a major increase in the number of new
store openings over the next three years. After scheduled openings of two to
four new stores next year, the pace of expansion will increase to opening eight
to 10 new stores in each of the following two years. The increase in new store
growth is expected to strengthen the company's market position in the western
United States and position it for improved profitability.
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HOMEBASE ANNOUNCES PRELIMINARY THIRD QUARTER RESULTS PAGE 3
"We are taking a proactive approach in growing HomeBase as part of our
objective to provide a solid return for our shareholders," said Sherman. "We
have a proven successful formula with our new prototype design, and we intend
to vigorously pursue the opportunities afforded by the improving Southern
California housing market, low interest rates, and generally strong economic
conditions in the western United States."
Sherman said the company expects to finance this new store-opening
schedule by offering up to $100 million aggregate face amount of convertible
subordinated debentures through a Rule 144A/Regulation S private placement. The
company intends to complete the offering as quickly as possible, subject to
market conditions. The securities to be offered will not be registered under the
Securities Act of 1933, as amended, and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements.
Headquartered in Irvine, California, HomeBase, Inc. was founded in 1983
and operates 85 home improvement warehouses in 10 western states. HomeBase, Inc.
(formerly Waban Inc.) is traded on the New York Stock Exchange under the symbol
"HBI" and can be located on the Internet at http://www.homebase.com.
Except for historical information, the matters discussed in this document
are forward-looking statements that involve risks and uncertainties that could
cause results to differ materially from those expressed in any of the forward-
looking statements. Such risks and uncertainties include, but are not limited
to, the company's ability to execute its new growth strategy discussed above,
the company's ability to consummate the financing on terms favorable to the
company or at all and the factors under the heading "Risk Factors" in the
Company's Proxy Statement/Prospectus for the 1997 Annual Meeting of Stockholders
and risk factors detailed in the Company's other filings with the Securities and
Exchange Commission.
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