Exhibit 99.1
The Gymboree Corporation Reports Third Quarter 2004 Results
SAN FRANCISCO, Nov. 16 /PRNewswire-FirstCall/ -- The Gymboree Corporation
(Nasdaq: GYMB) today reported earnings from continuing operations of $8.9
million or $0.28 per diluted share for the third fiscal quarter ended October
30, 2004 compared to earnings from continuing operations of $8.5 million or
$0.28 per diluted share for the same period last year. Income from continuing
operations in the current quarter includes an income tax benefit of $3.4
million or $0.11 per diluted share resulting from a favorable resolution of
certain income tax issues.
On August 17, 2004, the company announced the closure of its United
Kingdom and Ireland retail operations. The closure process was substantially
complete by the end of the third quarter. Accordingly, for all relevant
periods, the results of operations for the Company's United Kingdom and
Ireland retail operations have been separately presented as discontinued
operations. Net loss from discontinued operations was ($3.4) million or
($0.11) per diluted share for the third fiscal quarter ended October 30, 2004,
comprised primarily of asset write-offs, severance expense, and lease
disposition costs.
Net sales from continuing retail operations for the third fiscal quarter
ended October 30, 2004 totaled $152.6 million, an 8% increase over the $140.9
million in net sales from continuing retail operations for the third fiscal
quarter ended November 1, 2003. Comparable store sales from continuing
operations for the quarter increased 2% over the same period last year. Total
net sales from continuing operations for the third fiscal quarter, including
sales from Gymboree Play & Music operations, were $155.6 million, an increase
of 8% compared to total net sales from continuing operations of $143.8 million
for the third fiscal quarter last year.
"Going forward, we will focus on ensuring appropriate seasonality of our
Gymboree collections, delivering more competitive costing through increasingly
effective sourcing and creating enticing events in our stores," said Lisa
Harper, The Gymboree Corporation's chairman and chief executive officer. "We
are encouraged by the development of our new businesses and remain committed
to the ultimate success of our broader strategy of creating multiple niche
brands."
Business Outlook
For the fourth fiscal quarter, the Company expects comparable store sales
from continuing operations to be flat to the prior year. The Company also
reaffirmed its fourth fiscal quarter guidance of earnings per diluted share
from continuing operations to be in the range of $0.25 to $0.30, excluding a
non-cash charge related to the assignment of the Company's former Burlingame
headquarters to the landlord of the Company's new San Francisco headquarters.
The amount of the charge will be recorded as a deferred lease incentive from
the new landlord, which will be amortized over the life of the new lease as a
reduction of rent expense.
For the full fiscal year 2004, the Company now expects its guidance for
earnings per diluted share from continuing operations to be in the range of
$0.59 to $0.64, excluding both the current quarter's income tax benefit and
the expected non-cash charge in the fourth quarter. Net loss from discontinued
operations for the fourth fiscal quarter is expected to be in the range of
($0.14) to ($0.16) related to the remaining U.K. lease disposition costs,
asset write-offs, and severance charges.
Management Presentation
A live broadcast of the discussion of third fiscal quarter 2004 earnings
results will be available to interested parties at 1:30 p.m. Pacific Time
(4:30 p.m. Eastern Time) on Tuesday, November 16. To listen to the live
broadcast over the Internet, please log on to gymboree.com, click on "Our
Company" at the bottom of the page, go to "Investor and Media Relations" and
then "Conference Calls & Web casts." A replay of the call will be available
shortly after the broadcast through midnight Eastern Time, November 23, 2004,
at 800-642-1687, pass code 1856939, as well as archived on our Web site at the
same location as the live Web cast.
About The Gymboree Corporation
The Gymboree Corporation's specialty retail brands offer unique,
high-quality products delivered with personalized customer service. As of
October 30, 2004, the Company operated a total of 660 stores: 597 Gymboree(R)
retail stores (552 in the United States, 28 in Canada, and 17 in Europe), 51
Janie and Jack(R) retail shops and 12 Janeville(TM) stores in the United
States. The Company also operates online stores at gymboree.com and
janieandjack.com, and offers directed parent-child developmental play programs
at 506 franchised and company-operated centers in the United States and 26
other countries.
Forward-Looking Statements
The foregoing sales and earnings figures for the third fiscal quarter are
un-audited and subject to quarter-end and year-end adjustment, and could
differ materially from those indicated. The foregoing paragraphs contain
forward-looking statements relating to The Gymboree Corporation's anticipated
sales growth and future financial performance. These are forward looking
statements for purposes of the safe harbor provisions under the Private
Securities Litigation Reform Act of 1995. Actual results could differ
materially as a result of a number of factors, including customer reactions to
new merchandise, service levels and new concepts, success in meeting our
delivery targets, the level of our promotional activity, the wind down of our
UK and Ireland operations, our gross margin achievement, our ability to
appropriately manage inventory, general economic conditions, and competitive
market conditions. Other factors that may cause actual results to differ
materially include those set forth in the reports that we file from time to
time with the Securities and Exchange Commission, including our annual report
on Form 10-K for the year ended January 31, 2004. These forward-looking
statements reflect The Gymboree Corporation's expectations as of November 16,
2004. The Gymboree Corporation undertakes no obligation to update the
information provided herein.
NOTE: Gymboree and Janie and Jack are registered trademarks of The
Gymboree Corporation. Janeville is a trademark of The Gymboree Corporation.
THE GYMBOREE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share and store data)
(Unaudited)
13 Weeks Ended 39 Weeks Ended
Oct. 30, Nov. 1, Oct. 30, Nov. 1,
2004 2003 2004 2003
Net sales:
Retail $152,619 $140,864 $410,466 $373,635
Play & Music and Other 2,989 2,894 8,241 9,002
Total net sales 155,608 143,758 418,707 382,637
Cost of goods sold, including
buying and occupancy expenses (92,799) (83,355) (250,387) (225,808)
Gross profit 62,809 60,403 168,320 156,829
Selling, general and
administrative expenses (54,306) (46,730) (151,984) (133,181)
Operating income 8,503 13,673 16,336 23,648
Other income, net 69 19 451 354
Income from continuing
operations before income taxes 8,572 13,692 16,787 24,002
Income tax benefit (expense) 338 (5,203) (2,661) (9,121)
Income from continuing
operations, net of income tax 8,910 8,489 14,126 14,881
Loss from discontinued operations,
net of income tax (3,419) (174) (3,350) (364)
Income before cumulative effect
of change in accounting principle 5,491 8,315 10,776 14,517
Cumulative effect of change in
accounting principle, net of
income tax -- -- 1,228 --
Net income $5,491 $8,315 $12,004 $14,517
Basic per share amounts:
Income from continuing operations,
net of income tax $0.29 $0.29 $0.46 $0.50
Loss from discontinued operations,
net of income tax (0.11) (0.01) (0.11) (0.01)
Cumulative effect of change in
accounting principle, net of
income tax -- -- 0.04 --
Net income $0.18 $0.28 $0.39 $0.49
Diluted per share amounts:
Income from continuing operations,
net of income tax $0.28 $0.28 $0.45 $0.48
Loss from discontinued operations,
net of income tax $(0.11) (0.01) (0.11) (0.01)
Cumulative effect of change in
accounting principle, net of
income tax $-- -- 0.04 --
Net income $0.18 $0.27 $0.38 $0.47
Weighted average shares outstanding:
Basic 30,801 29,687 30,657 29,518
Diluted 31,346 30,837 31,355 30,764
Number of stores at end of period 660 612 660 612
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Oct. 30, Jan. 31, Nov. 1,
2004 2004 2003
Current Assets
Cash and cash equivalents $64,608 $89,553 $56,463
Accounts receivable 19,215 11,168 7,542
Merchandise inventories 91,706 73,017 81,832
Prepaid expenses and deferred taxes 3,588 3,991 10,349
Current assets of discontinued
operations 4,373 6,396 6,908
Total current assets 183,490 184,125 163,094
Property and Equipment, net 146,097 108,898 106,945
Lease Rights, Deferred Taxes and
Other Assets 10,059 5,860 5,779
Total Assets $339,646 $298,883 $275,818
Current Liabilities
Accounts payable $38,245 $33,318 $34,195
Accrued liabilities 43,372 33,786 30,254
Current liabilities of
discontinued operations 5,127 1,714 2,554
Total current liabilities 86,744 68,818 67,003
Long Term Liabilities
Deferred rent and other liabilities 30,412 26,317 20,814
Stockholders' Equity 222,490 203,748 188,001
Total Liabilities and
Stockholders' Equity $339,646 $298,883 $275,818
SOURCE The Gymboree Corporation
-0- 11/16/2004
/CONTACT: Charles Bracher, Investor Relations, +1-415-278-7137, or
charles_bracher@gymboree.com, or Lisa Bayne, Media Relations, +1-415-278-7942,
or lisa_bayne@gymboree.com, both of The Gymboree Corporation/
/Web site: http://www.gymboree.com /
(GYMB)
CO: Gymboree Corporation
ST: California
IN: REA EDU
SU: ERN CCA ERP