Cardis Corp., the Buena Park auto parts wholesaler and retailer that emerged from a bankruptcy reorganization 15 months ago, said Thursday that it lost $1.7 million last quarter and is seeking to restructure loans with two creditors.
The company, which operates nine auto parts warehouses and 21 CarQuest retail stores in California, said it was also seeking more loans and considering issuing more stock to shore up its balance sheet, which is burdened with heavy debt.
Cardis added that it has launched a cost-cutting program, including laying off 50 employees. The company blamed its problems on slumping sales during the recession.
Cardis reported a loss of $1.7 million for the third quarter ending Jan. 31, compared to a loss of $1 million last year. Sales were $19 million for the quarter, compared to $20.4 million last year.
For the first nine months of the current fiscal year, Cardis had a $3.7-million loss compared to $1.9 million a year ago. Sales were $61.6 million compared to $63.6 million last year.
The company owes more than $50 million to two big creditors, Security Pacific National Bank and a group of suppliers. A $500,000 payment to the bank and $400,000 to the suppliers are due April 30. Cardis is seeking to delay or restructure the payments.
The latest troubles come a year after Cardis emerged from Chapter 11 bankruptcy and sold its biggest business--the 243-store TuneUp Masters chain--to Xpert-TUM Acquisition Inc., part of another chain of tuneup shops based in Memphis, Tenn.
Xpert-TUM paid $56 million for the company and assumed TuneUp Masters’ debt. But Cardis didn’t get any money from the sale. The proceeds went to a bank that had loaned Cardis the money to acquire TuneUp Masters.
A group of Beverly Hills investors founded Cardis in 1983. The company bought TuneUp Masters three years later from its founder, race car driver Andy Granatelli.
Analysts said Cardis took on too much debt in its ambitious expansion drive.