Reddi Brake Files for Reporting Extension

Reddi Brake Supply Corp., which suffered a net loss of about $2 million during the three months ended Sept. 30, has filed an extension with the Securities and Exchange Commission for reporting those first quarter results.

The company anticipates reporting net sales of $16.7 million for the three months ended Sept. 30, as compared to net sales of $15.3 million for the same period last year. Company officials said the net loss of $2 million is attributable to many factors, including a 6% drop in the gross profit percentage to 36% for the quarter that ended in September.

Last year’s gross margin was heavily influenced by free or highly discounted merchandise provided by vendors, officials said.

The net loss also can be attributed to an increase in selling and warehouse expenses, mainly from a personnel buildup designed to bring about an increase in sales. The anticipated sales growth was not achieved, Reddi Brake officials said.

The company also announced a voluntary arrangement with its principal trade creditors, who have agreed to work with Reddi Brake on new repayment terms.

The creditors granted Reddi Brake a moratorium of at least 30 days, selected a creditors’ committee to monitor the program, and are implementing terms to facilitate a flow of critical goods and services to Reddi Brake.

The company also announced it has reached agreement with MacDonald Computer Systems to supply and install a new management information and control system. The system will be installed for limited warehouse testing in December and is scheduled to be operational throughout the company by March.

Reddi Brake Supply Corp., based in Ventura, operates 85 outlets in 26 states, providing brake systems, chassis components and other auto undercarriage parts to professional installers.