FOR IMMEDIATE RELEASE Approved by: Olga L. Conley
Chief Financial Officer
(617) 376-4300
URL: http://www.jjill.com
Contact: Investor Relations:
Suzanne Rosenberg/
Priya Akhoury
Press: Michael McMullan/
Kate Talbot
Morgen-Walke Associates, Inc.
(212) 850-5600
THE J. JILL GROUP REPORTS FIRST QUARTER RESULTS
NET SALES INCREASE BY 30.3% -- NET INCOME INCREASES BY 47.1%
QUINCY, MA, MAY 2, 2001 - THE J. JILL GROUP, INC. (NASDAQ: JILL) today
reported financial results for the first quarter ended March 31, 2001. Net
sales for the first quarter increased by 30.3% to $63.3 million from $48.6
million reported in the prior year. Operating income for the quarter
totaled $1.6 million, representing a 21.9% increase over last year's $1.3
million. Net income for the period increased by 47.1% to $796,000 from
$541,000 reported in the comparable period last year. Despite the 10.2%
increase in weighted average shares outstanding resulting from the
company's recently completed private placement, earnings per share
increased to $0.07 per diluted share in the first quarter of 2001 compared
to $0.05 per diluted share in the first quarter of 2000.
All fiscal 2000 numbers have been restated to comply with the provisions of
the Securities and Exchange Commission's Staff Accounting Bulletin No. 101
"REVENUE RECOGNITION IN FINANCIAL STATEMENTS." Please refer to the attached
schedule which restates all four quarters of fiscal 2000.
Gordon R. Cooke, President and Chief Executive Officer, commented, "We are
pleased to have achieved a 30% sales increase accompanied by a 47% increase
in net income for the first quarter of 2001 in a very difficult retail and
economic environment. These results were achieved even as we continued to
make significant investments in our retail store roll-out and enhanced our
e-commerce channel of distribution."
"Since the beginning of the year we have opened 6 new retail stores,
located in Boston, Los Angeles, Tucson, Denver, San Francisco and St.
Louis, bringing our total number of stores to 28. We have already committed
to seventeen additional store locations for 2001 and we anticipate having a
total of 47 to 52 stores open by year-end. Sales in our retail channel grew
tenfold, with retail now representing 17% of our total volume versus 2%
last year. J. Jill direct channel sales increased by 13% to $53.0 million
as a result of improved fulfillment. Catalog circulation and productivity
per catalog mailed were both virtually equal to last year. Within the
direct channel, sales through our e-commerce web site totaled $12.4
million, or 23% of total direct channel volume, as compared to $6.0 million
or 12% a year ago," continued Mr. Cooke.
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Gross margin for the first quarter of 2001 improved to 30.2% compared to
29.7% for the first quarter of 2000, primarily as a result of productivity
improvements achieved in J. Jill's operations and fulfillment facility, as
well as the leveraging of fixed costs. These improvements were offset by
factors affecting the company's retail segment and its growing contribution
to the company's overall results. The first three months of the year
traditionally involve a high level of promotional activity for retailers,
and the company's retail stores are no exception. Additionally, gross
margins tend to be lower for J. Jill's retail channel than its direct
channel because retail does not benefit from offsetting some of its
fulfillment costs via postage and handling income.
First quarter selling, general and administrative expenses as a percentage
of net sales rose slightly to 27.7% this year from 27.0% last year. This
increase once again reflects the growth of the retail segment and the fact
that the first three months of the year typically represent the weakest
period of the year for the retail industry.
Looking forward, assuming the economic environment does not deteriorate
further, the company is maintaining its 2001 fiscal year targets previously
announced on October 31, 2000. More specifically, for the second quarter of
fiscal 2001 the J. Jill Group is targeting net sales to be between $64 and
$65 million and earnings per diluted share to range between $0.16 and
$0.18, including a projected 17% dilution from the private placement.
These are J. Jill's targets, not predictions of actual performance.
Historically, J. Jill's performance has deviated, often materially, from
its targets. These statements do not include the potential of any business
risks, opportunities or developments that may occur after May 2, 2001. J.
Jill does not expect to report on its progress during the quarter, or
comment on it to analysts or investors, until after it has closed the books
on the quarter and appropriately disclosed the results.
Regarding the J. Jill Group's future financial performance, Mr. Cooke
commented, "When we last touched on this topic in February, I indicated
that the most recently mailed catalog showed evidence of a slowdown in
customer demand. I also pointed out that it would be premature to draw any
conclusions from these early results. Since then, subsequent catalog
mailings have shown better response rates and, while not robust, the
overall tone of our business is relatively healthy, particularly in light
of the difficult economic environment."
"We are enthusiastic about our future. We believe that our multiple
distribution channel strategy is right not only for the J. Jill Group, but
also for our customers. Importantly, we believe our core J. Jill brand is
still in its infancy with tremendous future potential. We have an
experienced management team and the infrastructure in place to support a
much larger business. The capital infusion from the recently completed
private placement should give us the financial firepower to execute our
promising growth strategy. J. Jill is a company with a powerful brand, a
focused strategy, a tremendous opportunity, dedicated people and ample
financial resources," concluded Mr. Cooke.
The J. Jill Group's conference call to discuss first quarter earnings will
be broadcast live today at 10:00 a.m. Eastern Time at www.vcall.com and
www.jjillgroup.com, and will be archived online within one hour of the
completion of the conference call. This archive will be available for 48
hours.
The J. Jill Group is a leading retailer of high quality women's apparel,
accessories and footwear. The company currently markets its products
through its retail stores, catalogs, and e-commerce website. J. Jill is
designed to appeal to active, affluent women age 35 and older.
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Page: 3
THIS PRESS RELEASE CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. VARIOUS FACTORS COULD CAUSE THE RESULTS OF
THE J. JILL GROUP TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FACTORS
INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING: THE CONTINUED SUCCESS OR
POSSIBLE FUTURE FAILURE OF THE RETAIL STORE INITIATIVE; THE ABILITY OF J.
JILL TO EFFECTIVELY MANAGE ITS OPERATIONS AND GROWTH IN A MULTIPLE
DISTRIBUTION CHANNEL ENVIRONMENT; SIGNIFICANT CHANGES IN CUSTOMER
ACCEPTANCE OF J. JILL'S PRODUCT OFFERINGS; CHANGES IN COMPETITION IN THE
APPAREL INDUSTRY; CHANGES IN CONSUMER SPENDING, FASHION TRENDS AND CONSUMER
PREFERENCES; CHANGES IN, OR THE FAILURE TO COMPLY WITH, FEDERAL AND STATE
TAX AND OTHER GOVERNMENT REGULATIONS; THE CUSTOMARY RISKS OF PURCHASING
MERCHANDISE ABROAD, INCLUDING LONGER LEAD TIMES, HIGHER INITIAL PURCHASE
COMMITMENTS AND FOREIGN CURRENCY FLUCTUATIONS; POSSIBLE FUTURE INCREASES IN
EXPENSES AND LABOR AND EMPLOYEE BENEFIT COSTS; THE ABILITY OF J. JILL TO
ATTRACT AND RETAIN QUALIFIED PERSONNEL; BUSINESS ABILITIES AND JUDGMENT OF
MANAGEMENT; THE EXISTENCE OR ABSENCE OF BRAND AWARENESS; THE EXISTENCE OR
ABSENCE OF PUBLICITY, ADVERTISING AND PROMOTIONAL EFFORTS; THE SUCCESS OR
FAILURE OF OPERATING INITIATIVES; THE MIX OF J. JILL'S SALES BETWEEN FULL
PRICE AND LIQUIDATION MERCHANDISE; GENERAL ECONOMIC AND BUSINESS CONDITIONS
AND OTHER FACTORS, INCLUDING THOSE DETAILED FROM TIME TO TIME IN J. JILL'S
SEC REPORTS, INCLUDING ITS ANNUAL REPORT ON FORM 10-K FILED ON MARCH 29,
2001 J. JILL DISCLAIMS ANY INTENT OR OBLIGATION TO UPDATE THESE
FORWARD-LOOKING STATEMENTS.
(TABLES TO FOLLOW)
Page: 4
THE J. JILL GROUP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
THREE MONTHS ENDED
----------------------------------
MARCH 31, MARCH 25,
IN THOUSANDS, EXCEPT PER SHARE DATA -- UNAUDITED 2001 2000
- ------------------------------------------------ ------------ -----------
(RESTATED)
Net sales $63,332 $48,591
Cost of products and merchandising 44,195 34,147
- ---------------------------------------------------------------------------------------------------------------
Gross margin 19,137 14,444
Selling, general and administrative expenses 17,542 13,136
- ---------------------------------------------------------------------------------------------------------------
Operating income 1,595 1,308
Interest, net 223 285
Income tax provision 576 417
- ---------------------------------------------------------------------------------------------------------------
Income before cumulative effect 796 606
Cumulative effect of accounting change, net of tax -- (65)
- ---------------------------------------------------------------------------------------------------------------
Net income $796 $541
===============================================================================================================
EARNINGS PER SHARE:
Basic $0.07 $0.05
Diluted $0.07 $0.05
- ---------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 11,265 10,006
Diluted 12,017 10,193
===============================================================================================================
THE J. JILL GROUP
NET SALES SUMMARY
- --------------------------------------------------------------------------------
THREE MONTHS ENDED
----------------------------------
MARCH 31, MARCH 25,
IN THOUSANDS -- UNAUDITED 2001 2000
- ------------------------- ------------ ------------
(RESTATED)
J. Jill direct $52,965 $46,854
J. Jill retail 10,787 1,001
- ---------------------------------------------------------------------------------------------------------------
J. Jill total 63,752 47,855
- ---------------------------------------------------------------------------------------------------------------
Nicole Summers 17 995
Other (437) (259)
- ---------------------------------------------------------------------------------------------------------------
Total company net sales $63,332 $48,591
===============================================================================================================
Page:5
THE J. JILL GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
MARCH 31, MARCH 25,
IN THOUSANDS -- UNAUDITED 2001 2000
- ------------------------- ----------- ----------
(RESTATED)
ASSETS:
Cash and cash equivalents $26,344 $4,418
Assets held for sale -- 2,313
Inventory 42,992 20,750
Prepaid catalog expenses 4,234 4,593
Deferred income taxes 7,628 10,177
Other current assets 6,636 2,656
- ---------------------------------------------------------------------------------------------------------------
Total current assets 87,834 44,907
- ---------------------------------------------------------------------------------------------------------------
Property and equipment 68,603 49,124
Deferred income taxes 1,431 2,623
Other non-current assets 1,789 1,749
- ---------------------------------------------------------------------------------------------------------------
Total assets $159,657 $98,403
===============================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses $31,754 $20,001
Current portion of long-term debt 6,863 3,107
- ---------------------------------------------------------------------------------------------------------------
Total current liabilities 38,617 23,108
- ---------------------------------------------------------------------------------------------------------------
Long-term debt 16,851 18,683
Other non-current liabilities 5,445 150
- ---------------------------------------------------------------------------------------------------------------
Total liabilities 60,913 41,941
- ---------------------------------------------------------------------------------------------------------------
Capital stock 92,326 63,058
Accumulated earnings (deficit) 6,418 (6,596)
- ---------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $159,657 $98,403
===============================================================================================================
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THE J. JILL GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
THREE MONTHS ENDED
---------------------------------
MARCH 31, MARCH 25,
IN THOUSANDS -- UNAUDITED 2001 2000
- ------------------------- ------------ -----------
(RESTATED)
Cash flows provided by operating activities:
Net income $796 $541
Depreciation and amortization 1,884 1,134
Deferred income taxes 98 348
Changes in assets and liabilities (2,734) 662
- ---------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 44 2,685
Cash flows used in investing activities:
(Increase) decrease in cash held in escrow (181) 32
Additions to property and equipment (6,148) (3,413)
- ---------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (6,329) (3,381)
Cash flows provided by (used in) financing activities:
Borrowings under (payments of) debt 2,329 (445)
Proceeds from stock transactions 28,706 59
- ---------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 31,035 (386)
Net increase (decrease) in cash and cash equivalents 24,750 (1,082)
Cash and cash equivalents at:
Beginning of period 1,594 5,500
- ---------------------------------------------------------------------------------------------------------------
End of period $26,344 $4,418
===============================================================================================================
Page: 7
THE J. JILL GROUP
RESTATED (SAB 101) FISCAL 2000 STATEMENT OF OPERATIONS BY QUARTER
- --------------------------------------------------------------------------------
FIRST QTR SECOND QTR THIRD QTR FOURTH QTR FISCAL
IN THOUSANDS, EXCEPT PER SHARE DATA - UNAUDITED 2000 2000 2000 2000 2000
- ----------------------------------------------- ----------------------------------------------------------------------
Net sales $48,591 $51,494 $57,852 $88,372 $246,309
Cost of products and merchandising 34,147 33,357 36,718 56,597 160,819
- ---------------------------------------------------------------------------------------------------------------------------------
Gross margin 14,444 18,137 21,134 31,775 85,490
Selling, general and administrative expenses 13,136 14,362 14,805 19,781 62,084
- ---------------------------------------------------------------------------------------------------------------------------------
Operating income 1,308 3,775 6,329 11,994 23,406
Interest, net 285 319 327 456 1,387
Income tax provision 417 1,417 2,516 4,845 9,195
- ---------------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect 606 2,039 3,486 6,693 12,824
Cumulative effect of accounting change, net of tax (65) -- -- -- (65)
- ---------------------------------------------------------------------------------------------------------------------------------
Net income $541 $2,039 $3,486 $6,693 $12,759
=================================================================================================================================
EARNINGS PER SHARE:
Basic $0.05 $0.20 $0.35 $0.66 $1.27
Diluted $0.05 $0.20 $0.34 $0.63 $1.23
- ---------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 10,006 10,013 10,037 10,065 10,031
Diluted 10,193 10,251 10,401 10,612 10,388
- ---------------------------------------------------------------------------------------------------------------------------------
THE J. JILL GROUP
NET SALES SUMMARY
- --------------------------------------------------------------------------------
FIRST QTR SECOND QTR THIRD QTR FOURTH QTR FISCAL
IN THOUSANDS - UNAUDITED 2000 2000 2000 2000 2000
- ------------------------ ----------------------------------------------------------------------
J. Jill direct $46,854 $47,843 $51,128 $72,095 $217,920
J. Jill retail 1,001 3,579 6,955 16,773 28,308
- ---------------------------------------------------------------------------------------------------------------------------------
J. Jill total 47,855 51,422 58,083 88,868 246,228
- ---------------------------------------------------------------------------------------------------------------------------------
Nicole Summers 995 321 67 141 1,524
Other (259) (249) (298) (637) (1,443)
- ---------------------------------------------------------------------------------------------------------------------------------
Total company net sales $48,591 $51,494 $57,852 $88,372 $246,309
=================================================================================================================================
Page: 8
THE J. JILL GROUP OPENING
STORE LISTING LOCATION DATE
- --------------------------------------------------------------------------------------------------------------------
Natick Mall Boston, MA Nov-99
Providence Place Providence, RI Dec-99
Water Tower Chicago, IL Apr-00
Mall of America Minneapolis, MN Apr-00
Pacific Place Seattle, WA Apr-00
The Westchester White Plains, NY May-00
Tysons Corner McLean, VA Jun-00
Flatiron Crossing Denver, CO Aug-00
Galleria @ Roseville Sacramento, CA Aug-00
Ridgedale Center Minneapolis, MN Aug-00
Old Orchard Chicago, IL Sep-00
Pioneer Place Portland, OR Sep-00
Southpark Mall Charlotte, NC Sep-00
Walt Whitman Long Island, NY Oct-00
Sommerset Collection Detroit, MI Oct-00
Riverchase Galleria Birmingham, AL Oct-00
Main Place Santa Ana, CA Oct-00
Walden Galleria Buffalo, NY Nov-00
Town Center Boca Raton Boca Raton, FL Nov-00
Perimeter Mall Atlanta, GA Nov-00
South Shore Plaza Boston, MA Nov-00
Crabtree Valley Raleigh, NC Nov-00
Burlington Mall Boston, MA Feb-01
Topanga Plaza Los Angeles, CA Mar-01
Tucson Mall Tucson, AZ Apr-01
Cherry Creek Mall Denver, CO Apr-01
San Francisco Center San Francisco, CA Apr-01
Plaza Frontenac St. Louis, MO Apr-01
PROPOSED ADDITIONAL FISCAL 2001 LOCATIONS:
Glendale Galleria Los Angeles, CA 2Q01
Freehold Mall Freehold, NJ 2Q01
Willowbrook Mall Willowbrook, NJ 3Q01
Saddle Creek Germantown, TN 3Q01
The Shops @ Willowbend Dallas, TX 3Q01
Bellevue Square Bellevue, WA 3Q01
Kierland Commons Scottsdale, AZ 3Q01
Paseo Colorado Pasadena, CA 3Q01
Country Club Plaza Kansas City, MO 3Q01
Mall @ Green Hills Nashville, TN 3Q01
Prudential Center Boston, MA 3Q01
Ross Park Mall Pittsburgh, PA 3Q01
The Gateway Salt Lake City, UT 4Q01
Sherman Oaks Fashion Square Los Angeles, CA 4Q01
Chandler Fashion Center Chandler, AZ 4Q01
Polaris Fashion Place Columbus, OH 4Q01
Aspen Grove Denver, CO 4Q01
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