Yankee Holding 8K The Yankee Candle Company, Inc. Reports | SEC 12 Aug 10

Exhibit 99.1

LOGO

News Release

P.O. Box 110 • Route 5 • South Deerfield • MA • 01373-0110

FOR IMMEDIATE RELEASE

Contact: Gregory Hunt

(413) 665-8306, Ext. 4414

The Yankee Candle Company, Inc. Reports

Fiscal 2010 Second Quarter Results

South Deerfield, MA – August 12, 2010 – Yankee Holding Corp. and The Yankee Candle Company, Inc. (“Yankee Candle” or the “Company”) today announced financial results for the second quarter ended July 3, 2010. Yankee Holding Corp. is a holding company formed in connection with the Company’s Merger with an affiliate of Madison Dearborn Partners, LLC on February 6, 2007 (the “Merger”), and is the parent company of The Yankee Candle Company, Inc.

Sales for the second quarter of 2010 were $125.4 million, a 5.5% increase from the prior year second quarter. Sales in the Company’s wholesale business were $53.7 million, an increase of 5.8% versus the prior year second quarter. Retail sales were $71.7 million, an increase of $3.6 million or 5.2% from the second quarter of fiscal 2009.

The Company incurred a net loss of $10.2 million for the second quarter of 2010 compared to a net loss of $12.5 million, for the second quarter of 2009.

The Company presents EBITDA (earnings/loss from continuing operations before interest, income taxes, depreciation and amortization) and Adjusted EBITDA (as defined below) to provide investors with additional information to evaluate the Company’s operating performance and its ability to service its debt. EBITDA for the second quarter of 2010 increased by 2.5% to $16.3 million, or 13.0% of sales, compared to $15.9 million, or 13.4% of sales for the prior year second quarter. Adjusted EBITDA for the second quarter of 2010 increased slightly to $17.8 million as compared to Adjusted EBITDA for the prior year second quarter of $17.7 million. Reconciliations of second quarter results to EBITDA and Adjusted EBITDA, which are non-GAAP financial measures, are included at the end of this press release.

“The retail environment was considerably more challenging in the second quarter than in the first, as the consumer became increasingly cautious,” said Harlan Kent, the Company’s Chief Executive Officer.

“Despite this difficult environment, our Retail and Wholesale businesses were each able to deliver positive year over year sales growth in the second quarter which, coupled with our continued focus on productivity and cost management initiatives, allowed us to deliver slightly increased Adjusted EBITDA versus the prior year quarter.”

Second Quarter Highlights:

•

Retail sales were $71.7 million, an increase of $3.6 million or 5.2% from the second quarter of fiscal 2009, driven primarily by increased sales at retail stores opened after the second quarter of 2009 and an increase in sales in our Yankee Candle Fundraising business.

•

Comparable sales in the 473 Yankee Candle retail stores, including the South Deerfield and Williamsburg flagship stores, that have been open for more than one year decreased by 3.1%, while the Consumer Direct business increased by 12.6% over the prior year second quarter. Total retail comparable sales, including the Consumer Direct business, decreased by 1.9% compared to the prior year second quarter.

•

Wholesale sales were $53.7 million in the second quarter, an increase of $3.0 million or 5.8% from the prior year second quarter. The increase was driven primarily by an increase in sales in our International business (consisting of our European operations and International distributors).

Six Months Ended July 3, 2010 Highlights:

•

Retail sales were $145.4 million, an increase of $12.7 million or 9.6% from the first six months of fiscal 2009, driven primarily by an increase in new stores opened after the second quarter of 2009, an increase in comparable store sales and an increase in sales in our Yankee Candle Fundraising business. Comparable store sales increased by 2.9% over the prior year period. Total retail comparable sales, including the Consumer Direct business, increased by 3.5% compared to the prior year.

•

Wholesale sales were $121.0 million for the first six months of fiscal 2010, an increase of $15.6 million or 14.8% from the first six months of fiscal 2009. The increase was driven primarily by an increase in sales in our International business (consisting of our European operations and International distributors) coupled with increased sales to existing domestic wholesale accounts driven by the continued momentum of our Target business.

“We are encouraged by the solid overall performance of our businesses in the first half of 2010 in the face of a consumer environment that continues to be challenged,” said Mr. Kent. “Given the recent trends in macro-economic and retail conditions we continue to be cautious and will plan our business and spending prudently as we approach the busy Fall and Holiday seasons. We believe we are well positioned to capitalize on any increase in consumer spending and to grab more than our fair share of the consumer’s wallet in the second half of the year.”

Earnings Conference Call:

The Company will host a conference call to be broadcast via the Internet at 11:00 a.m. (EST) this morning to more fully discuss its second quarter results. The dial-in number is (800) 860-2442, for International Calls the dial-in number is (412) 858-4600. When greeted by the operator, request the conference by stating the Company and the host’s last name(Yankee Candle/Kent) or reference the conference title(Q2 2010 Yankee Candle Earnings Conference Call).This call is being webcast by MultiVu and can be accessed at The Yankee Candle Company’s web site atwww.yankeecandle.com. Click on the “About Us” link, and then select the “Investor Information” link. Enter your registration information ten minutes prior to the start of the conference.

About Yankee Candle

The Yankee Candle Company, Inc. is the leading designer, manufacturer, wholesaler and retailer of premium scented candles, based on sales, in the giftware industry. Yankee Candle has a 40-year history of offering distinctive products and marketing them as affordable luxuries and consumable gifts. The Company sells its products through a North American wholesale customer network of approximately 20,700 store locations, a growing base of Company owned and operated retail stores (503 Yankee Candle Stores located in 43 states as of July 3, 2010), direct mail catalogs, and its Internet website (www.yankeecandle.com). Outside of North America, the Company sells its products primarily through its subsidiary, Yankee Candle Company (Europe), Ltd., which has an international wholesale customer network of approximately 4,100 store locations and distributors covering a combined 46 countries.

This press release may contain certain information constituting “forward-looking statements” for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to the statements contained herein with respect to management’s current estimates of the Company’s financial and operating results for Fiscal 2010, and any other statements concerning the Company’s or management’s plans, objectives, goals, strategies, expectations, estimates, beliefs or projections, or any other statements concerning future performance or events. Actual results could differ materially from those indicated by these forward-looking statements as a result of various risks and uncertainties, including but not limited to the following: the impact of the ongoing economic situation and any continued deterioration in consumer confidence or spending; the risk that the substantial indebtedness incurred in connection with the Merger, and the debt agreements entered into in connection therewith, might restrict our ability to operate our business and pursue certain business strategies; the risk that we may not be able to generate sufficient cash flows to meet our debt service obligations; the current economic conditions in the United States as a whole and the continuing weakness in the retail environment; the risk that we will be unable to maintain our historical growth rate; the effects of competition from others in the highly competitive giftware industry; our ability to anticipate and react to industry trends and changes in consumer demand; our dependence upon our senior executive officers; the risk of loss of our manufacturing and distribution facilities; the impact on the price of our notes of seasonal, quarterly and other fluctuations in our business; the risk of any disruption in wax supplies; and other factors described or contained in the Company’s most recent Annual Report on Form 10-K on file with the Securities and Exchange Commission. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update certain forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if experience or future events may cause the views contained in any forward-looking statements to change.

Yankee Holding Corp. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands)

(Unaudited)


	Thirteen Weeks Ended July 3, 2010					Thirteen Weeks Ended July 4, 2009
Sales:
Retail	$	71,693		57.19	%	$	68,133		57.33	%
Wholesale		53,675		42.81	%		50,720		42.67	%

Total sales		125,368		100.00	%		118,853		100.00	%
Cost of sales		55,687		44.42	%		51,532		43.36	%

Gross profit		69,681		55.58	%		67,321		56.64	%

Selling expenses:
Retail		39,148		54.61	%(A)		37,753		55.41	%(A)
Wholesale		9,110		16.97	%(B)		7,631		15.05	%(B)

Total selling expenses		48,258		38.49	%		45,384		38.18	%

General & administrative expenses		13,952		11.13	%		15,339		12.91	%
Restructuring charge		29		0.02	%		227		0.19	%

Income from operations		7,442		5.94	%		6,371		5.36	%
Interest income		—		0.00	%		(1	)	0.00	%
Interest expense		18,462		14.73	%		21,824		18.36	%
Other expense		4,751		3.79	%		39		0.03	%

Loss before benefit from income taxes		(15,771	)	-12.58	%		(15,491	)	-13.03	%
Benefit from income taxes		(5,621	)	-4.48	%		(7,050	)	-5.93	%

Loss from continuing operations		(10,150	)	-8.10	%		(8,441	)	-7.10	%
Loss from discontinued operations, net of income taxes		(38	)	-0.03	%		(4,081	)	-3.43	%

Net loss	$	(10,188	)	-8.13	%	$	(12,522	)	-10.54	%

(A)	Retail selling expenses as a percentage of retail sales.

(B)	Wholesale selling expenses as a percentage of wholesale sales.

Yankee Holding Corp. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands)

(Unaudited)


	Twenty-Six Weeks Ended July 3, 2010					Twenty-Six Weeks Ended July 4, 2009
Sales:
Retail	$	145,388		54.59	%	$	132,684		55.73	%
Wholesale		120,954		45.41	%		105,387		44.27	%

Total sales		266,342		100.00	%		238,071		100.00	%

Cost of sales		117,998		44.30	%		103,299		43.39	%

Gross profit		148,344		55.70	%		134,772		56.61	%

Selling expenses:
Retail		79,172		54.46	%(A)		74,966		56.50	%(A)
Wholesale		18,654		15.42	%(B)		15,657		14.86	%(B)

Total selling expenses		97,826		36.73	%		90,623		38.07	%

General & administrative expenses		30,630		11.50	%		30,702		12.90	%
Restructuring charge		829		0.31	%		975		0.41	%

Income from operations		19,059		7.16	%		12,472		5.24	%
Interest income		—		0.00	%		(11	)	0.00	%
Interest expense		38,270		14.37	%		43,539		18.29	%
Other expense		9,483		3.56	%		1,475		0.62	%

Loss before benefit from income taxes		(28,694	)	-10.77	%		(32,531	)	-13.66	%
Benefit from income taxes		(10,298	)	-3.87	%		(14,144	)	-5.94	%

Loss from continuing operations		(18,396	)	-6.91	%		(18,387	)	-7.72	%
Loss from discontinued operations, net of income taxes		(294	)	-0.11	%		(5,623	)	-2.36	%

Net loss	$	(18,690	)	-7.02	%	$	(24,010	)	-10.09	%

(A)	Retail selling expenses as a percentage of retail sales.

(B)	Wholesale selling expenses as a percentage of wholesale sales.

Yankee Holding Corp. And Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)


	July 3, 2010		January 2, 2010
ASSETS
Current Assets:
Cash	$	1,452	$	9,095
Accounts receivable, net		30,129		43,928
Inventory		83,650		59,530
Prepaid expenses and other current assets		23,419		12,094
Deferred tax assets		12,286		11,208

Total Current Assets		150,936		135,855
Property and Equipment, net		122,992		124,768
Marketable Securities		1,231		1,168
Deferred Financing Costs		16,844		18,731
Other Assets		932,137		938,558

Total Assets	$	1,224,140	$	1,219,080


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	20,270	$	21,648
Accrued payroll		7,631		15,613
Other accrued liabilities		62,847		63,450

Total Current Liabilities		90,748		100,711
Deferred Compensation Obligation		1,325		1,369
Long-Term Debt		1,017,125		989,125
Deferred Rent		10,900		10,643
Deferred Tax Liabilities		92,825		91,706
Other Long-Term Liabilities		3,660		2,283
Stockholders’ Equity		7,557		23,243

Total Liabilities And Stockholders’ Equity	$	1,224,140	$	1,219,080

Yankee Holding Corp.

July 3, 2010 Earnings Release

Supplemental Data


	Quarter			Year to Date			Total
YCC Retail Stores		5	⁽⁵⁾		5	⁽⁵⁾	503
Wholesale Customer Locations - North America		(101	)		1,528		20,694
Wholesale Customer Locations - Europe		93			430		4,070
Square Footage - Gross		7,610			7,538		970,133
Square Footage - Selling		4,981			5,042		749,286
Total Comp Stores & Consumer Direct Sales Change %		-1.9	%		3.5	%
YCC Retail Comp Store Count		473			473		473
Sales per Square Foot⁽¹⁾				$	523
Store Count					477
Average store square footage, gross⁽²⁾					1,637
Average store square footage, selling⁽²⁾					1,251
Gross Profit⁽³⁾
Retail $	$	45,150		$	93,512
Retail %		63.0	%		64.3	%
Wholesale $	$	24,532		$	54,834
Wholesale %		45.7	%		45.3	%

Segment Profit⁽³⁾
Retail $	$	6,002		$	14,340
Retail %		8.4	%		9.9	%
Wholesale $	$	15,422		$	36,180
Wholesale %		28.7	%		29.9	%

Depreciation & Amortization⁽³⁾	$	10,471		$	21,175
Inventory per Store				$	26,821
Inventory Turns⁽⁴⁾					3.5
Capital Expenditures⁽³⁾	$	5,068		$	9,584

⁽¹⁾	Trailing 12 months, stores open for full 12 months, excluding S. Deerfield/Williamsburg Flagships.

⁽²⁾	Excludes S. Deerfield/Williamsburg Flagships.

⁽³⁾	Dollars in thousands.

⁽⁴⁾	Based on a 13 month average inventory divided by 12 month rolling COGS.

⁽⁵⁾	Net of closures.

Reconciliation of EBITDA and Adjusted EBITDA

In addition to the results reported in accordance with GAAP, the Company has provided information regarding “EBITDA” and “Adjusted EBITDA”, both of which are non-GAAP financial measures. EBITDA represents earnings/loss from continuing operations before interest, taxes, depreciation and amortization. EBITDA and Adjusted EBITDA are not intended to represent cash flow from operations as defined by GAAP and should not be used as an alternative to net income (loss) as an indicator of operating performance or to cash flow as a measure of liquidity. We believe the presentation of EBITDA and Adjusted EBITDA provides useful information to investors regarding our results of operations because such presentation assists in analyzing and benchmarking the performance value of our business. We believe EBITDA and Adjusted EBITDA are useful to investors because they help enable investors to evaluate our business in the same manner as our management evaluates our business, and because these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies with substantial financial leverage. In addition, because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we also use Adjusted EBITDA for business planning purposes, to incent and compensate our management personnel and to measure our performance relative to that of our competitors. While EBITDA and Adjusted EBITDA are frequently used as a measure of operating performance and the ability to meet debt service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. In evaluating our operating performance these measures should be used in conjunction with GAAP measures.

EBITDA and Adjusted EBITDA are calculated as follows:


	Thirteen Weeks Ended July 3, 2010			Thirteen Weeks Ended July 4, 2009			Twenty-Six Weeks Ended July 3, 2010		Twenty-Six Weeks Ended July 4, 2009
Net loss	$	(10,188	)	$	(12,522	)	(18,690	)	(24,010	)
Loss from discontinued operations, net of income taxes		38			4,081		294		5,623
Benefit from income taxes		(5,621	)		(7,050	)	(10,298	)	(14,144	)
Interest expense, net - excluding amortization of deferred financing fees		21,612			19,755		45,185		40,312
Amortization of deferred financing fees		1,039			1,533		2,074		2,655
Depreciation		6,380			6,717		12,888		13,479
Amortization		3,054			3,409		6,215		6,817

EBITDA from continuing operations		16,314			15,923		37,668		30,732
Equity-based compensation (a)		186			209		515		411
MDP advisory fees		375			375		750		750
Purchase accounting (b)		362			379		671		789
Restructuring (c)		29			227		829		975
Realized losses on foreign currency (d)		574			587		431		2,059

Adjusted EBITDA	$	17,840		$	17,700		40,864		35,716

(a)	Non-cash charges related to equity-based compensation.

(b)	Represents purchase accounting adjustments as a result of the Merger in 2007.

(c)	Includes costs associated with employee severance, lease related terminations and other costs associated with the restructuring of the business.

(d)	Represents transaction losses on settlements of our intercompany receivable with our foreign subsidiary and transaction losses from foreign vendors and customers.

Yankee Holding Inactive 8-KThe Yankee Candle Company, Inc. Reports