Exhibit 99.1
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| Company Contact: |
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| Ronald Ristau |
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| Chief Operating Officer |
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| Chief Financial Officer |
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| (212) 884-2000 |
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| Investor/Media Contact: |
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| Integrated Corporate Relations |
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| (203) 682-8200 |
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| Investor: Allison Malkin |
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| Media: Megan McDonnell |
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NEW YORK & COMPANY, INC. ANNOUNCES FIRST QUARTER 2005 RESULTS
Net Income Increased 65.4% to $21.5 Million, or $0.38 Per Diluted Share
Company Projects Fiscal Year 2005 Diluted EPS of $1.18 to $1.24
New York, NY — May 19, 2005 — New York & Company, Inc. [NYSE:NWY], a specialty apparel chain with 482 stores, today announced financial results for the first quarter ended April 30, 2005.
Net sales for the first quarter of fiscal 2005 increased 7.1% to $270.0 million from $252.1 million in the first quarter of fiscal 2004. Comparable store sales for the first quarter of fiscal 2005 increased 3.9% compared to a 14.1% increase in the prior year quarter. Gross profit for the first quarter of fiscal 2005 was $98.3 million, or 36.4% of net sales, compared to $91.8 million, or 36.4% of net sales, in the first quarter of fiscal 2004. Selling, general and administrative expenses were $60.9 million, or 22.5% of net sales, for the first quarter of fiscal 2005 compared to $59.7 million, or 23.7% of net sales, in the first quarter of fiscal 2004. Operating income for the first quarter of fiscal 2005 increased 16.5% to $37.4 million, or 13.9% of net sales, compared to $32.1 million, or 12.7% of net sales, in the first quarter of fiscal 2004. Net income available for common stockholders for the first quarter of fiscal 2005 increased 65.4% to $21.5 million, or $0.38 per diluted share, compared to $13.0 million, or $0.25 per diluted share, in the first quarter of fiscal 2004.
“We are pleased with our first quarter results which met the high end of our projections,” stated Richard P. Crystal, New York & Company’s Chairman and CEO. “We attribute our success to our fashion assortment which continues to be well received by our customers. We also continue to benefit from our operating model that provides us with increased leverage and operating margin expansion as we grow.”
The Company’s balance sheet included $85.1 million in cash and working capital of $103.4 million at April 30, 2005. Fiscal first quarter 2005 inventory was current and favorable to plan at $99.5 million compared to first quarter-end inventory of $85.8 million in fiscal 2004. This increase is attributed primarily to support new store openings, changes in inventory lead time planning and product mix.
Capital spending for the first quarter of fiscal 2005 was $15.4 million, compared to $10.0 million for the first quarter of fiscal 2004. These amounts do not reflect landlord allowances which are recorded on the balance sheet as a deferred credit as opposed to a reduction in capital spending. During the first quarter of fiscal 2005, the Company successfully opened eight new stores, closed two stores, and completed eight remodels, ending the quarter operating 482 stores in 45 states, as compared to 472 stores at the end of the first quarter of fiscal 2004. Total selling square footage at the end of the first quarter of fiscal 2005 was 3.196 million, compared to 3.313
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million at the end of the first quarter of fiscal 2004. See Exhibits (1)-(3) at the end of this release for more details.
Guidance
The Company currently forecasts net sales for the second quarter of fiscal 2005 in the range of $258.0 million to $263.0 million, an increase of 6.3% to 8.3%, compared to actual second quarter fiscal 2004 net sales of $242.8 million. Included in this estimate is a comparable store sales increase in the range of 2.0% to 4.0%. Net income available to common stockholders continues to be estimated in the range of $11.3 million to $13.1 million, compared to a net loss of $8.9 million in the second quarter of fiscal 2004. Second quarter fiscal 2005 diluted earnings per share continues to be estimated in the range of $0.19 to $0.23, compared to second quarter fiscal 2004 diluted loss per share of $0.20. The Company continues to expect diluted shares outstanding to approximate 58.3 million shares at the end of the second quarter of fiscal 2005, compared to 45.3 million shares at the end of the second quarter of fiscal 2004. The increase in share count is the result of the initial public offering, potential option vesting in 2005, and the exclusion of antidilutive options in 2004 due to the net loss reported for second quarter last year.
For the fiscal 2005 year, the Company is forecasting net sales in the range of $1,117.0 million to $1,135.0 million compared to actual fiscal 2004 net sales of $1,040.0 million. Net income available to common stockholders is being revised to a range of $68.4 million to $72.0 million, or $1.18 to $1.24 per diluted share compared to its previous guidance range of $67.5 million to $72.0 million, or $1.16 to $1.24 per diluted share, versus actual fiscal 2004 net income of $17.4 million, or $0.33 per diluted share. This change primarily reflects first quarter performance. The Company expects full year diluted shares outstanding to be approximately 58.1 million at the end of fiscal 2005, as compared to 52.7 million at the end of fiscal 2004. The increase in share count is primarily the result of the initial public offering, potential option vesting in fiscal 2005 and a common stock warrant repurchase in the first quarter of fiscal 2004.
Store Expansion Plans
During the second quarter of fiscal 2005, the Company plans to open 15 new stores and remodel 26 locations. Included within these new and remodeled locations are 16 side by side apparel/accessory stores. The Company expects to close one store during the second quarter of fiscal 2005 and anticipates having 496 stores in operation at the end of the quarter, as compared to 474 stores in operation at the end of the second quarter of fiscal 2004. Total selling square footage at the end of the second quarter of fiscal 2005 is expected to approximate 3.214 million, compared to 3.293 million at the end of the second quarter of fiscal 2004. Exhibit (4) at the end of this release details the actual and projected store openings, closings, remodels and the related selling square footage by quarter for fiscal 2005.
The Company anticipates capital spending in the second quarter of fiscal 2005 to be in the range of $33.0 million to $36.0 million, as compared to $12.4 million in the second quarter of fiscal 2004, due to increases in new stores and remodels. These amounts do not reflect landlord allowances which are recorded on the balance sheet as a deferred credit as opposed to a reduction in capital spending.
For the full fiscal year 2005, capital spending is estimated to be in the range of $78.0 million to $80.0 million, compared to $54.3 million in fiscal 2004. These amounts do not reflect landlord allowances which are recorded on the balance sheet as a deferred credit as opposed to a reduction in capital spending.
Inventory levels are planned to increase to support new store openings and comparable store sales growth, which is consistent with the Company’s disciplined inventory control process. The Company expects inventory turn to range from 7.7 to 8.0 times in fiscal 2005, compared to 7.9 times in fiscal 2004.
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Conference Call Information
A conference call to discuss first quarter of fiscal 2005 results is scheduled for today (Thursday, May 19, 2005) at 9:00 AM Eastern Time. Investors and analysts interested in participating in the call are invited to dial (800) 289-0572 approximately ten minutes prior to the start of the call. The conference call will also be web-cast live at www.nyandcompany.com. A replay of this call will be available until May 26, 2005 and can be accessed by dialing (888) 203-1112 and entering code 8149711.
Forward-Looking Statements: This press release contains certain forward-looking statements. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These include, but are not limited to: (i) our ability to open and operate new stores successfully; (ii) seasonal fluctuations in our business; (iii) our ability to anticipate and respond to fashion trends and launch new product lines successfully; (iv) general economic conditions, consumer confidence and spending patterns; (v) our dependence on mall traffic for our sales; (vi) the susceptibility of our business to extreme and/or unseasonable weather conditions; (vii) our ability to retain and recruit key personnel; (viii) our reliance on third parties to manage some aspects of our business; (ix) changes in the cost of raw materials and labor; (x) our reliance on foreign sources of production; (xi) the ability of our manufacturers to manufacture and deliver products in a timely manner while meeting our quality standards; (xii) our reliance on manufacturers to maintain ethical business practices; (xiii) our ability to protect our trademarks and other intellectual property rights; (xiv) our dependence on the success of our brand; (xv) competition in our market, including promotional and pricing competition; (xvi) our reliance on the effective use of customer information; (xvii) the effects of government regulation; (xviii) the control of our company by our sponsors and (xix) other risks and uncertainties as described in our documents filed with the SEC, including our Annual Report on Form 10-K. We undertake no obligation to revise the forward-looking statements included in this press release to reflect any future events or circumstances.
About New York & Company
New York & Company, Inc., founded in 1918, is a leading specialty retailer of fashion-oriented, moderately-priced women’s apparel. The company’s proprietary branded New York & Company merchandise is sold exclusively through its national network of 482 retail stores in 45 states, as of April 30, 2005. Additionally, certain product, press release and SEC filing information concerning the Company are available at the Company’s website www.nyandcompany.com.
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Exhibit (1)
New York & Company, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(Amounts in thousands, except per share amounts) |
| Three months ended April 30, 2005 |
| Three months ended May 1, 2004 |
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Net sales |
| $ | 269,975 |
| $ | 252,095 |
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Cost of goods sold, buying and occupancy costs |
| 171,665 |
| 160,259 |
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Gross profit |
| 98,310 |
| 91,836 |
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Selling, general and administrative expenses |
| 60,926 |
| 59,746 | (a) | ||
Operating income |
| 37,384 |
| 32,090 |
| ||
Interest expense, net |
| 1,409 |
| 1,754 |
| ||
Accrued dividends-redeemable preferred stock |
| — |
| 2,230 |
| ||
Loss on modification and extinguishment of debt |
| — |
| 352 |
| ||
Loss on derivative instrument (related to LFAS, Inc. warrant) |
| — |
| 2,466 |
| ||
Income before income taxes |
| 35,975 |
| 25,288 |
| ||
Provision for income taxes |
| 14,495 |
| 12,294 |
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Net income available for common stockholders |
| $ | 21,480 |
| $ | 12,994 |
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Basic earnings per share: |
| $ | 0.40 |
| $ | 0.30 |
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Diluted earnings per share: |
| $ | 0.38 |
| $ | 0.25 |
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Weighted average shares outstanding: |
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Basic |
| 53,340 |
| 43,761 |
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Diluted |
| 56,673 |
| 52,909 |
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(a) Includes charges of approximately $1.0 million related to the terminated advisory services agreement with Bear Stearns Merchant Manager II, LLC.
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Exhibit (2)
New York & Company, Inc. and Subsidiaries
Consolidated Balance Sheets
|
| April 30, |
| January 29, 2005 |
| May 1, 2004 |
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(Amounts in thousands, except per share amounts) |
| (Unaudited) |
| (Audited) |
| (Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
| $ | 85,134 |
| $ | 85,161 |
| $ | 78,757 |
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Accounts receivable |
| 23,312 |
| 13,069 |
| 15,882 |
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Inventories, net |
| 99,508 |
| 93,379 |
| 85,794 |
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Prepaid expenses |
| 15,778 |
| 17,875 |
| 14,795 |
| ||||||
Deferred income taxes |
| — |
| — |
| 89 |
| ||||||
Other current assets |
| 1,997 |
| 1,256 |
| 1,879 |
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Total current assets |
| 225,729 |
| 210,740 |
| 197,196 |
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Property and equipment, net |
| 110,746 |
| 100,681 |
| 72,250 |
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Intangible assets |
| 14,843 |
| 14,843 |
| 14,515 |
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Deferred income taxes |
| — |
| — |
| 1,882 |
| ||||||
Other assets |
| 3,545 |
| 3,924 |
| 5,579 |
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Total assets |
| $ | 354,863 |
| $ | 330,188 |
| $ | 291,422 |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
| $ | 64,982 |
| $ | 74,045 |
| $ | 55,702 |
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Accrued expenses |
| 45,741 |
| 51,802 |
| 52,766 |
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Income taxes payable |
| 9,908 |
| — |
| 11,072 |
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Deferred income taxes |
| 1,684 |
| 1,788 |
| — |
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Other current liabilities |
| — |
| — |
| 18,737 |
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Total current liabilities |
| 122,315 |
| 127,635 |
| 138,277 |
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Long-term debt |
| 75,000 |
| 75,000 |
| 75,000 |
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Deferred income taxes |
| 6,966 |
| 6,698 |
| — |
| ||||||
Series A redeemable preferred stock, 12.5% cumulative, non-voting, par value $0.01; No shares authorized and outstanding at April 30, 2005 and January 29, 2005; 63 shares issued and outstanding at May 1, 2004 |
| — |
| — |
| 71,903 |
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Other liabilities |
| 24,658 |
| 17,572 |
| 16,379 |
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Total liabilities |
| 228,939 |
| 226,905 |
| 301,559 |
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Commitments and contingencies |
| — |
| — |
| — |
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Stockholders’ equity (deficit): |
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Common stock, voting, par value $0.001; 300,000 shares authorized; 53,476, 53,283, and 45,567 shares issued and outstanding at April 30, 2005, January 29, 2005, and May 1, 2004, respectively |
| 53 |
| 53 |
| 46 |
| ||||||
Additional paid-in capital |
| 110,611 |
| 109,448 |
| — |
| ||||||
Less stock subscription receivable |
| — |
| — |
| (225 | ) | ||||||
Retained earnings (deficit) |
| 15,964 |
| (5,514 | ) | (9,958 | ) | ||||||
Accumulated other comprehensive loss |
| (704 | ) | (704 | ) | — |
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Total stockholders’ equity (deficit) |
| 125,924 |
| 103,283 |
| (10,137 | ) | ||||||
Total liabilities and stockholders’ equity |
| $ | 354,863 |
| $ | 330,188 |
| $ | 291,422 |
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5
Exhibit (3)
New York & Company, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands) |
| Three Months Ended April 30, 2005 |
| Three Months Ended May 1, 2004 |
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Operating activities |
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Net income |
| $ | 21,480 |
| $ | 12,994 |
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Adjustment to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
| 5,446 |
| 4,749 |
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Amortization / write off of deferred financing costs |
| 289 |
| 586 |
| ||
Share-based compensation |
| 212 |
| 121 |
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Deferred income taxes |
| 164 |
| — |
| ||
Accrued dividends — redeemable preferred stock |
| — |
| 2,230 |
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Loss on derivative instrument |
| — |
| 2,466 |
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Change in operating assets and liabilities: |
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|
|
|
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Accounts receivable |
| (10,243 | ) | (5,016 | ) | ||
Inventories, net |
| (6,129 | ) | (7,574 | ) | ||
Prepaid expenses |
| 2,097 |
| 113 |
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Accounts payable |
| (9,063 | ) | 7,931 |
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Accrued expenses |
| (6,061 | ) | (725 | ) | ||
Income taxes payable |
| 9,908 |
| 954 |
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Change in other assets and liabilities |
| 6,332 |
| 844 |
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Net cash provided by operating activities |
| 14,432 |
| 19,673 |
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Investing activities |
|
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Capital expenditures |
| (15,411 | ) | (10,009 | ) | ||
Net cash used in investing activities |
| (15,411 | ) | (10,009 | ) | ||
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Financing activities |
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Proceeds from exercise of stock options |
| 51 |
| — |
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Tax benefit from exercise of stock options |
| 901 |
| — |
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Proceeds from issuance of long-term debt |
| — |
| 75,000 |
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Repayment of long-term debt |
| — |
| (82,500 | ) | ||
Payment of financing costs |
| — |
| (2,205 | ) | ||
Repurchase of common stock warrant |
| — |
| (20,000 | ) | ||
Net cash provided by (used in) financing activities |
| 952 |
| (29,705 | ) | ||
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Net decrease in cash and cash equivalents |
| (27 | ) | (20,041 | ) | ||
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Cash and cash equivalents at beginning of period |
| 85,161 |
| 98,798 |
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Cash and cash equivalents at end of period |
| $ | 85,134 |
| $ | 78,757 |
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Exhibit (4)
New York & Company, Inc. and Subsidiaries
Fiscal 2005 Projected Store Count and Selling Square Footage
Quarter |
| Total stores open at beginning of the quarter |
| Number of stores opened during the quarter |
| Number of stores remodeled during the quarter |
| Number of stores closed during the quarter |
| Total stores open at end of the quarter |
|
1st Quarter (Actual) |
| 476 |
| 8 |
| 8 |
| (2) |
| 482 |
|
2nd Quarter (Projected) |
| 482 |
| 15 |
| 26 |
| (1) |
| 496 |
|
3rd Quarter (Projected) |
| 496 |
| 22 |
| 7 |
| — |
| 518 |
|
4th Quarter (Projected) |
| 518 |
| 2 |
| 2 |
| (5) |
| 515 |
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Quarter |
| Total selling square feet at beginning of the quarter |
| Selling square feet for stores opened during the quarter |
| Reduction of selling square feet for stores remodeled during the quarter |
| Reduction of selling square feet for stores closed during the quarter |
| Total selling square feet at end of |
|
1st Quarter (Actual) |
| 3,189,770 |
| 32,908 |
| (15,823) |
| (10,644) |
| 3,196,211 |
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2nd Quarter (Projected) |
| 3,196,211 |
| 71,290 |
| (47,656) |
| (5,589) |
| 3,214,256 |
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3rd Quarter (Projected) |
| 3,214,256 |
| 93,311 |
| (9,957) |
| — |
| 3,297,610 |
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4th Quarter (Projected) |
| 3,297,610 |
| 14,201 |
| (1,498) |
| (33,794) |
| 3,276,519 |
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