Exhibit 99.1
BARE ESCENTUALS, INC. REPORTS FIRST QUARTER FISCAL 2007 RESULTS
First Quarter Sales Increase 29% and Net Income Improves 40%
SAN FRANCISCO, CA (May 2, 2007) ― Bare Escentuals, Inc. (Nasdaq: BARE) today announced financial results for the first fiscal quarter ended April 1, 2007.
Net sales for the first quarter of fiscal 2007 were $115.6 million, an increase of approximately 29% from $89.9 million recorded in the same period last year. Net income for the first quarter of fiscal 2007 was $20.4 million, or $0.22 per diluted share on approximately 92.6 million shares outstanding, compared to $14.5 million, or $0.20 per diluted share on approximately 71.9 million shares outstanding, in the first quarter of fiscal 2006. Operating income for the first quarter of fiscal 2007 was $40.4 million, an increase of approximately 20% from $33.6 million in the same period last year.
“The first quarter of 2007 was a very good quarter for the company and a continuation of the strong growth we delivered in 2006,” said Leslie Blodgett, Chief Executive Officer. “While our sales and earnings speak to our outstanding performance, it is the strength of our brand and dedication of our customers that genuinely reflect our success. As we expand distribution channels worldwide, we remain committed to providing the highest quality bareMinerals products and customer service, as well as maintaining our brand excellence and industry leadership.”
Guidance
Based on stronger-than-expected first quarter results, Bare Escentuals expects fiscal 2007 diluted earnings per share to be in the range of $0.89 to $0.94 on approximately 93.2 million shares outstanding. This change represents an increase of $0.05 over the prior earnings guidance. The Company continues to anticipate that earnings will be weighted toward the second half of fiscal 2007.
Conference Call
Bare Escentuals, Inc. will host a conference call today, May 2, 2007 at 1:30 p.m. Pacific (4:30 p.m. Eastern). The call, which will be hosted by Leslie Blodgett, Chief Executive Officer; Diane Miles, President; and Myles McCormick, Chief Financial Officer and Chief Operations Officer, will be broadcast live over the Internet and accessible through the Investor Relations section of the Company’s website at http://ir.bareescentuals.com. The webcast will also be archived online within one hour of the completion of the conference call and available at the Investor Relations section of the Company’s website at http://ir.bareescentuals.com.
About Bare Escentuals, Inc.
Bare Escentuals, Inc. is one of the fastest growing prestige cosmetic companies in the United States and a leader in mineral-based cosmetics. The Company utilizes a distinctive marketing strategy and multi-channel distribution model to develop, market and sell cosmetics, skin care, and body care products under its bareMinerals, RareMinerals and namesake Bare Escentuals brands, and professional skin care products under its md formulations brand through infomercials, home shopping television, specialty beauty retailers, company-owned boutiques, spas and salons, and online shopping.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives and future operations and estimates of our financial results and capital expenditures for future periods. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. Factors that could affect future performance include, but are not limited to our dependence on sales of our mineral-based foundation; our dependence on significant customers with whom we do not have long-term purchase commitments; the highly competitive nature of the beauty industry, and the adverse consequences if we are unable to compete effectively; the possibility that we might not manage our growth effectively or sustain our growth or profitability; the possibility that we might not be able to retain key executives and other personnel and recruit additional executives and personnel; the possibility that we might not be able to open and operate new boutiques successfully; our dependence on our suppliers to produce and deliver our products in a timely and cost-effective manner; the possibility that our media spending might not result in increased net sales or generate the levels of product and brand name awareness we desire; the possibility that we may be unable to repay or refinance our indebtedness, which was $339.3 million as of December 31, 2006; changes in general economic or market conditions; and other risk factors detailed in our Annual Report on Form 10-K for the year ended December 31, 2006, which is available at the SEC’s website at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
Investor Contact: | Andrew Greenebaum / Christine Lumpkins |
| Integrated Corporate Relations, Inc. |
| agreenebaum@icrinc.com ; clumpkins@icrinc.com |
| (310) 954-1100 |
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BARE ESCENTUALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except percentages and per share data)
|
| Three months ended |
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| April 1, 2007 |
| April 2, 2006 |
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Sales, net |
| $ | 115,613 |
| 100.0 | % | $ | 89,915 |
| 100.0 | % |
Cost of goods sold |
| 33,450 |
| 28.9 |
| 25,196 |
| 28.0 |
| ||
Gross profit |
| 82,163 |
| 71.1 |
| 64,719 |
| 72.0 |
| ||
Expenses: |
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Selling, general and administrative |
| 39,185 |
| 33.9 |
| 29,684 |
| 33.0 |
| ||
Depreciation and amortization |
| 940 |
| 0.8 |
| 465 |
| 0.5 |
| ||
Stock-based compensation |
| 1,611 |
| 1.4 |
| 944 |
| 1.1 |
| ||
Operating income |
| 40,427 |
| 35.0 |
| 33,626 |
| 37.4 |
| ||
Interest expense, net |
| (6,470 | ) | (5.6 | ) | (8,697 | ) | (9.7 | ) | ||
Income before provision for income taxes |
| 33,957 |
| 29.4 |
| 24,929 |
| 27.7 |
| ||
Provision for income taxes |
| 13,552 |
| 11.7 |
| 10,395 |
| 11.5 |
| ||
Net income |
| $ | 20,405 |
| 17.7 | % | $ | 14,534 |
| 16.2 | % |
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Net income per share: |
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Basic |
| $ | 0.23 |
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| $ | 0.21 |
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Diluted |
| $ | 0.22 |
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| $ | 0.20 |
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Weighted-average shares used in per share calculations: |
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Basic |
| 89,428 |
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|
| 69,145 |
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Diluted |
| 92,632 |
|
|
| 71,868 |
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BARE ESCENTUALS, INC.
NET SALES BY BUSINESS SEGMENT AND DISTRIBUTION CHANNEL
(in thousands, except percentages)
| Three Months Ended |
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| April 1, 2007 |
| April 2, 2006 |
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Retail |
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Infomercial |
| $ | 34,274 |
| 29.7 | % | $ | 30,548 |
| 34.0 | % |
Boutiques |
| 17,134 |
| 14.8 |
| 11,516 |
| 12.8 |
| ||
Total retail |
| 51,408 |
| 44.5 |
| 42,064 |
| 46.8 |
| ||
Wholesale |
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Premium wholesale |
| 35,580 |
| 30.8 |
| 23,828 |
| 26.5 |
| ||
Home shopping television |
| 13,694 |
| 11.8 |
| 12,366 |
| 13.8 |
| ||
Spas and salons |
| 9,959 |
| 8.6 |
| 7,506 |
| 8.3 |
| ||
International distributors |
| 4,972 |
| 4.3 |
| 4,151 |
| 4.6 |
| ||
Total wholesale |
| 64,205 |
| 55.5 |
| 47,851 |
| 53.2 |
| ||
Sales, net |
| $ | 115,613 |
| 100.0 | % | $ | 89,915 |
| 100.0 | % |
BARE ESCENTUALS, INC.
CONSOLIDATED BALANCE SHEET DATA
(in thousands)
|
| April 1, |
| December 31, |
| April 2, |
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|
| (Unaudited) |
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|
| (Unaudited) |
| |||
Cash and cash equivalents |
| $ | 39,153 |
| $ | 20,875 |
| $ | 26,507 |
|
Inventories |
| 59,267 |
| 62,006 |
| 39,199 |
| |||
Accounts receivable, net of allowances |
| 37,721 |
| 30,759 |
| 24,944 |
| |||
Total current assets |
| 149,365 |
| 125,715 |
| 97,093 |
| |||
Total assets |
| 183,580 |
| 155,835 |
| 116,167 |
| |||
Accounts payable |
| 21,178 |
| 25,357 |
| 18,916 |
| |||
Accrued liabilities |
| 13,427 |
| 16,123 |
| 12,765 |
| |||
Total current liabilities |
| 58,764 |
| 59,377 |
| 50,082 |
| |||
Current portion of long-term debt |
| 17,624 |
| 17,624 |
| 12,667 |
| |||
Long-term debt |
| 307,376 |
| 321,639 |
| 374,000 |
| |||
Total stockholders’ equity (deficit) |
| $ | (188,803 | ) | $ | (228,522 | ) | $ | (310,833 | ) |
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