Exhibit 99.1
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For: J. Crew Group, Inc.
Contact: Scott M. Rosen
EVP/Chief Financial Officer
(212) 209-2545
For Immediate Release
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Christine Greany
Tidal Communications
(203) 866-4401
J. CREW GROUP ANNOUNCES REVISED FOURTH QUARTER AND
FISCAL YEAR 2002 RESULTS
NEW YORK (April 4, 2003) - J. Crew Group, Inc. announced revised net
loss and EBITDA results for the fourth quarter and fiscal year ended February 1,
2003. The reported net loss has been increased by $9.0 million to $20.7 million
for the fourth quarter and to $40.6 million for the fiscal year. EBITDA
decreased by the same amount to $7.2 million for the fourth quarter and $30.0
million for the fiscal year. The revision occurred as a result of the Company's
recent decision to modify its strategy on the disposition of inventory to
achieve inventory clearing at the end of each selling season. This decision
occurred subsequent to the quarterly earnings release issued on March 20, 2003
but prior to the filing of the Company's Form 10-K for the fiscal year.
Under its previous disposition strategy, excess prior season
inventories would have been carried over for sale in subsequent seasons. Under
its new strategy, the Company will accelerate the disposition of these excess
inventories through factory stores, Internet promotions and warehouse sales.
These changes in the method and timing of inventory disposition are expected to
result in a decrease in the amounts ultimately received for these inventories.
Accordingly, the Company had taken additional inventory reserves of $9.0 million
as of February 1, 2003.
Scott Rosen, Chief Financial Officer, stated, "This change in strategy
will enable us to clear excess inventories in season and to maximize our
offering of current season merchandise in all channels."
J.Crew Group, Inc. is a leading retailer of men's and women's apparel,
shoes and accessories. As of March 1, 2003, the Company operated 152 retail
stores, the J.Crew catalog business, jcrew.com, and 42 factory outlet stores.
Certain statements herein are "forward-looking statements" made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements reflect the Company's current expectations or
beliefs concerning future events and actual results of operations may differ
materially from historical results or current expectations. Any such
forward-looking statements are subject to various risks and uncertainties,
including the strength of the economy, changes in the overall level of consumer
spending or preferences in apparel, the performance of the Company's products
within the prevailing retail environment, trade restrictions, political or
financial instability in countries where the Company's goods are manufactured,
postal rate increases, paper and printing costs, availability of suitable store
locations at appropriate terms and other factors which are set forth in the
Company's Form 10-K and in all filings with the SEC made by the Company
subsequent to the filing of the Form 10-K. The Company does not undertake to
publicly update or revise its forward-looking statements, whether as a result of
new information, future events or otherwise.
(tables to follow)
J.Crew Group, Inc.
Summary of operations
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Fourth Quarter Year ended
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2/1/03 2/2/02 2/1/03 2/2/02
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($ in millions)
Revenues $241.8 $246.7 $ 766.4 $ 777.9
Gross profit 83.8 104.4 287.7 315.6
Selling, general & administrative expenses (85.9) (82.1) (291.5) (295.6)
Interest (12.1) (9.1) (41.0) (36.5)
Income (loss) before income taxes (14.2) 13.2 (44.8) (16.5)
Net income (loss) (a) (20.7) 6.7 (40.6) (11.0)
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Taxes 6.5 6.5 (4.2) (5.5)
Interest 12.1 9.1 41.0 36.5
Depreciation & amortization 9.3 9.3 33.8 33.3
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EBITDA $ 7.2 $ 31.6 $ 30.0 $ 53.3
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(a) The tax benefit for fiscal year 2002 was negatively impacted by the
recognition of a valuation allowance against deferred tax assets as of
February 1, 2003, net of the reversal of certain other tax accruals.
J.Crew Group, Inc.
Summary Balance Sheet Data
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As of
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Assets 2/1/03 2/2/02
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($ in millions)
Cash $ 18.9 $ 16.2
Inventories 107.3 138.9
Property & equipment, net 171.5 187.3
Other 51.1 58.9
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Total $ 348.8 $ 401.3
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Liabilities and Stockholders' Deficit
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Accounts payable and other current liabilities $ 119.4 $ 143.0
Deferred credits 65.1 67.2
Long term debt 292.0 279.7
Redeemable preferred stock 264.0 230.5
Stockholders' deficit (391.7) (319.1)
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Total $ 348.8 $ 401.3
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Summary of cash flows
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Year ended
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2/1/03 2/2/02
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($ in millions)
EBITDA $ 30.0 $ 53.3
Cash interest (24.3) (19.1)
Taxes paid (0.4) (6.4)
Changes in working capital 20.0 (2.0)
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Cash from operations 25.3 25.8
Capital expenditures, net (20.4) (42.6)
Net cash for financing activities (2.2) 0.1
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Increase (decrease) in cash $ 2.7 $ (16.7)
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