EXHIBIT 99.1
FOR IMMEDIATE RELEASE Approved by: Olga L. Conley
- --------------------- Chief Financial Officer
(617) 376-4300
URL: http://www.jjill.com
Contact: Investor Relations:
Suzanne Rosenberg/David Waldman
Press:Michael McMullan/Kate Talbot
Morgen-Walke Associates, Inc.
(212) 850-5600
THE J. JILL GROUP REPORTS SECOND QUARTER RESULTS
COMPANY POSTS 28.5% NET SALES INCREASE -- NET INCOME INCREASES BY 26.5%
QUINCY, MA, JULY 31, 2001 - THE J. JILL GROUP, INC. (NASDAQ: JILL) today
reported financial results for the second quarter ended June 30, 2001. Net sales
for the second quarter increased by 28.5% to $66.2 million from $51.5 million
reported in the prior year. Operating income for the quarter totaled $4.6
million or 7.0% of net sales compared to $3.8 million or 7.3% of net sales in
the prior year. Net income for the period increased by 26.5% to $2.6 million
from $2.0 million reported in the comparable period last year. Despite the 15.8%
increase in weighted average shares outstanding resulting from the company's
February 2001 private placement, earnings per share increased to $0.21 per
diluted share in the second quarter of 2001 compared to $0.20 per diluted share
in the second quarter of 2000.
For the six months ended June 30, 2001, J. Jill recorded net sales of $129.5
million compared to $100.1 million in the prior year. Operating income for the
six-month period was $6.2 million or 4.8% of net sales compared to $5.1 million
or 5.1% of net sales in the prior year. Net income for the period was $3.4
million or $0.27 per diluted share versus $2.6 million or $0.25 per diluted
share in the comparable period last year.
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."
Gordon R. Cooke, President and Chief Executive Officer, commented, "We are
extremely pleased with our Spring 2001 performance. Our ability to generate this
level of earnings, in an economy that is undoubtedly impacting our top-line
performance, is a testament to the way we are running our business. Across all
areas of our company our execution is equal to or better than Fall 2000 when we
achieved an outstanding sales and profit performance. Specifically, in inventory
management our final fulfillment improved from 86.1% last Spring to 90.7% this
Spring, driving our direct segment net sales growth for the season. In the
contact center, the cost of handling a transaction has dropped by 25% from
Spring 2000. In the distribution center, our units handled per hour productivity
is up by 38% from Spring 2000. It is this successful operational execution that
has enabled us to translate our net sales growth into significant earnings
growth."
"Since the beginning of the year we have opened 10 new retail stores bringing
our total number of stores to 32. We have already committed to 15 additional
store locations for 2001 and we anticipate having a total of 47 stores open by
year-end. During the second quarter, sales in our retail channel grew by nearly
350%, with retail now representing 24% of our total volume versus just 7% last
year. J. Jill direct channel sales increased by 5% to $50.5 million as a result
of improved fulfillment and lower returns. Catalog circulation and productivity
per catalog mailed were both virtually equal to last year. Within the direct
channel, sales through our e-commerce website increased by $6.6 million and
totaled $13.1 million, or 26% of total direct channel volume, as compared to
$6.5 million or 13% a year ago," continued Mr. Cooke.
Page: 2
Gross margin for the second quarter of 2001 declined to 32.8% compared to 35.2%
for the second quarter of 2000, primarily reflecting a more promotional retail
environment. Additionally, gross margins have tended to be lower for J. Jill's
retail segment than its direct segment because retail does not benefit from
offsetting some of its cost of products via postage and handling income.
Second quarter selling, general and administrative expenses as a percentage of
net sales decreased to 25.8% this year from 27.9% last year. This improvement
can be attributed to cost containment and cost leveraging across both the direct
and the retail segments.
In other developments, the company has recently renegotiated its revolving line
of credit, bringing together a consortium of three banks and increasing the
availability of the line to $50.0 million from $30.0 million.
Looking forward, the increased uncertainty surrounding the general economy has
greatly limited the company's visibility into the second half of fiscal 2001.
For that reason, at this point in time the company is not providing any
financial targets for the remainder of the year or the year as a whole.
"Obviously the lack of visibility is a concern, however, we remain confident
that our multiple distribution channel strategy is right not only for our
company but also for our customers. We have a powerful brand that is still in
its infancy. We believe we have a sound future growth vehicle that has a
national roll out potential of 300 to 500 stores. We have ample financial
resources to execute this promising growth strategy. We have the management team
and the infrastructure in place to support a much larger business. We will
continue to execute this strategy for the long-term benefit of The J. Jill
Group," concluded Mr. Cooke.
The J. Jill Group's conference call to discuss second quarter earnings will be
broadcast live today at 10:00 a.m. Eastern Time at 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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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.
THE J. JILL GROUP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------- ----------------------------------
JUNE 30, JUNE 24, JUNE 30, JUNE 24,
IN THOUSANDS, EXCEPT PER SHARE DATA -- UNAUDITED 2001 2000 2001 2000
- ------------------------------------------------ ----------- --------------- --------------- --------------
(RESTATED) (RESTATED)
Net sales $66,193 $51,494 $129,525 $100,085
Cost of products and merchandising 44,517 33,357 88,712 67,504
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Gross margin 21,676 18,137 40,813 32,581
Selling, general and administrative expenses 17,053 14,362 34,595 27,498
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Operating income 4,623 3,775 6,218 5,083
Interest, net 176 319 399 604
Income tax provision 1,868 1,417 2,444 1,834
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Income before cumulative effect 2,579 2,039 3,375 2,645
Cumulative effect of accounting change, net of tax - - - (65)
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Net income $2,579 $2,039 $3,375 $2,580
=============================================================================================================================
EARNINGS PER SHARE:
Basic $0.22 $0.20 $0.29 $0.26
Diluted $0.21 $0.20 $0.27 $0.25
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WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 11,888 10,013 11,577 10,010
Diluted 12,566 10,251 12,293 10,225
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THE J. JILL GROUP
NET SALES SUMMARY
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THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------- ----------------------------------
JUNE 30, JUNE 24, JUNE 30, JUNE 24,
IN THOUSANDS -- UNAUDITED 2001 2000 2001 2000
- ------------------------- ----------- --------------- --------------- --------------
(RESTATED) (RESTATED)
J. Jill direct $50,451 $47,843 $103,416 $94,697
J. Jill retail 16,063 3,579 26,850 4,580
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J. Jill total 66,514 51,422 130,266 99,277
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Nicole Summers - 321 17 1,316
Other (321) (249) (758) (508)
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Total company net sales $66,193 $51,494 $129,525 $100,085
=============================================================================================================================
THE J. JILL GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
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JUNE 30, JUNE 24,
IN THOUSANDS -- UNAUDITED 2001 2000
- ------------------------- --------------- --------------
(RESTATED)
Assets:
Cash and cash equivalents $20,001 $3,129
Assets held for sale - 2,281
Inventory 39,454 24,364
Prepaid catalog expenses 4,951 4,004
Deferred income taxes 7,563 9,389
Other current assets 5,458 4,294
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Total current assets 77,427 47,461
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Property and equipment 72,292 53,749
Deferred income taxes 1,222 1,926
Other non-current assets 1,592 1,755
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Total assets $152,533 $104,891
=============================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses $25,734 $24,633
Current portion of long-term debt 1,896 3,118
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Total current liabilities 27,630 27,751
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Long-term debt 16,410 18,219
Other non-current liabilities 6,878 400
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Total liabilities 50,918 46,370
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Capital stock 92,618 63,078
Accumulated earnings (deficit) 8,997 (4,557)
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Total liabilities and stockholders' equity $152,533 $104,891
=============================================================================================================================
THE J. JILL GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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SIX MONTHS ENDED
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JUNE 30, JUNE 24,
IN THOUSANDS -- UNAUDITED 2001 2000
- ------------------------- --------------- --------------
(RESTATED)
Cash flows provided by operating activities:
Net income $3,375 $2,580
Depreciation and amortization 3,942 2,462
Deferred income taxes 372 1,833
Changes in assets and liabilities (2,883) 1,087
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Net cash provided by operating activities 4,806 7,962
Cash flows used in investing activities:
Increase in cash held in escrow (355) (148)
Additions to property and equipment (11,963) (9,366)
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Net cash used in investing activities (12,318) (9,514)
Cash flows provided by (used in) financing activities:
Payments of debt (3,079) (898)
Proceeds from stock transactions 28,998 79
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Net cash provided by (used in) financing activities 25,919 (819)
Net increase (decrease) in cash and cash equivalents 18,407 (2,371)
Cash and cash equivalents at:
Beginning of period 1,594 5,500
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End of period $20,001 $3,129
=============================================================================================================================
THE J. JILL GROUP OPENING
STORE LISTING LOCATION DATE
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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
Glendale Galleria Los Angeles, CA May-01
Freehold Mall Freehold, NJ Jun-01
Willowbrook Mall Willowbrook, NJ Jul-01
Saddle Creek Memphis, TN Jul-01
PROPOSED ADDITIONAL FISCAL 2001 LOCATIONS:
The Shops @ Willowbend Dallas, TX 3Q01
Kierland Commons Scottsdale, AZ 3Q01
Avenue of the Peninsula Rolling Hills, CA 3Q01
Ross Park Mall Pittsburgh, PA 3Q01
Paseo Colorado Pasadena, CA 3Q01
Bellevue Square Seattle, WA 4Q01
Country Club Plaza Kansas City, MO 4Q01
Danbury Fair Danbury, CT 4Q01
Sherman Oaks Fashion Square Los Angeles, CA 4Q01
Chandler Fashion Center Chandler, AZ 4Q01
University Town Center San Diego, CA 4Q01
Polaris Fashion Place Columbus, OH 4Q01
Aspen Grove Denver, CO 4Q01
The Gateway Salt Lake City, UT 4Q01
Promenade at Sagemore Marlton, NJ 4Q01