Reddi Brake Posts Loss; Reorganization Expected
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Reddi Brake Supply Corp., based in Ventura, announced a net loss of $2.1 million or 10 cents per share for the three months ended Sept. 30, its first quarter of fiscal 1996.
The loss came on revenues of $16.7 million. This compares with first-quarter 1995 revenues of $15.3 million, with a net loss of $103,092 or 1 cent per share.
The company attributed the loss to a lower gross margin (36% versus 42%) and higher operating and corporate expenses. Reddi Brake officials said both factors are being addressed in an informal reorganization plan announced last month.
Reddi Brake also reported that October sales for warehouses open at least 12 months declined 1.6% from the same period a year earlier. Richard J. McGorrian, Reddi Brake’s president and chief executive officer, attributed the decline to a shortage of fast-moving inventory items in the 84-warehouse system.
As a remedy, the company is working with a creditors committee to develop an interim arrangement for getting new fast-moving inventory into the warehouses while the details of the reorganization plan are being developed.
Reddi Brake operates in 26 states, providing brake systems, chassis components and other auto undercarriage parts to professional installers.
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