EXHIBIT 99.1
[WHITEHALL JEWELLERS, INC. LOGO] NEWS RELEASE
For: Whitehall Jewellers, Inc.
Contact: John R. Desjardins
Executive Vice President
FOR IMMEDIATE RELEASE 312.762.9751
WHITEHALL JEWELLERS, INC. REPORTS SECOND QUARTER FINANCIAL RESULTS
Chicago, Illinois, August 28, 2003 -- Whitehall Jewellers, Inc.
(NYSE:JWL) today reported financial results for the second quarter ended July
31, 2003.
The Company reported total second quarter sales of $72.7 million
compared to $76.2 million for the second quarter last year. Net loss for the
second fiscal quarter of 2003 was $2,871,000 compared to net income of $114,000
for the same period a year ago. Net loss per share of $0.20 in the second
quarter compares to net income per diluted share of $0.01 for the second quarter
of last year.
For the six-month period ended July 31, 2003, the Company reported
sales of $141.9 million compared to $150.8 million last year. Net loss was
$5,619,000 versus net income of $483,000 for the same period a year ago. Net
loss per share for the six-month period was $0.40 compared to net income per
diluted share of $0.03 for the six-month period last year.
The Company closed 5 stores in the second quarter which resulted in a
charge of approximately $400,000 before income taxes or $0.02 per share. The
Company expects to close several stores after Christmas which should result in a
charge of approximately $0.01 per share by the end of the fiscal year. In
addition, in the second quarter, the Company also took a $0.02 per share charge
associated with the write off of deferred financing costs as a result of the
refinancing of its existing credit facility with a new $125 million four year
credit facility.
Hugh M. Patinkin, Chairman and Chief Executive Officer, commented,
"While we are disappointed with second quarter results, we continue to believe
that the sales focused initiatives we are implementing this year will result in
incremental sales by the important Christmas holiday season. Indeed, sales
results in August have shown an improvement over the first half of the year and
are comp store positive."
For Investor Relations info: investorrelations@whji.com
Internet Website: www.whitehalljewellers.com
Today at 9:00 a.m. EDT, the Company will host a conference call to
review results for the quarter ended July 31, 2003. To participate in the call,
please dial 877-888-7019. This call will also be broadcast live on the Internet
at: http://www.whitehalljewellers.com.
Whitehall Jewellers, Inc. is a leading national specialty retailer of
fine jewelry, currently operating 384 stores in 38 states. The Company operates
stores in regional and superregional shopping malls under the names Whitehall
Co. Jewellers, Lundstrom Jewelers and Marks Bros. Jewelers.
This report contains certain forward-looking statements (as such term
is defined in Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934) and information relating to the Company that
are based on the current beliefs of management of the Company as well as
assumptions made by and information currently available to management including
statements related to the markets for our products, general trends and trends in
our operations or financial results, plans, expectations, estimates and beliefs.
In addition, when used in this report, the words "anticipate," "believe,"
"estimate," "expect," "intend," "plan," "predict" and similar expressions and
their variants, as they relate to the Company or our management, may identify
forward-looking statements. Such statements reflect our judgment as of the date
of this report with respect to future events, the outcome of which is subject to
certain risks, including the factors described below, which may have a
significant impact on our business, operating results or financial condition.
Investors are cautioned that these forward-looking statements are inherently
uncertain. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or outcomes may
vary materially from those described herein. Whitehall Jewellers undertakes no
obligation to update forward-looking statements. The following factors, among
others, may impact forward-looking statements contained in this report: (1) a
change in economic conditions or the financial markets which negatively impacts
the retail sales environment and reduces discretionary spending on goods such as
jewelry; (2) reduced levels of mall traffic caused by economic or other factors;
(3) our ability to execute our business strategy and the related effects on
comparable store sales and other results; (4) the extent and results of our
store expansion strategy and associated occupancy costs, and access to funds for
new store openings; (5) the high degree of fourth quarter seasonality of our
business; (6) the extent and success of our marketing and promotional programs;
(7) personnel costs and the extent to which we are able to retain and attract
key personnel; (8) the effects of competition; (9) the availability and cost of
consumer credit; (10) relationships with suppliers; (11) our ability to maintain
adequate information systems capacity and infrastructure; (12) our leverage and
cost of funds and changes in interest rates that may increase such costs; (13)
our ability to maintain adequate loss prevention measures; (14) fluctuations in
raw material prices, including diamond, gem and gold prices; (15) the extent and
results of our E-commerce strategies and those of others; (16) regulation
affecting the industry generally, including regulation of marketing practices;
(17) the successful integration of acquired locations and assets into our
existing operations; and (18) the risk factors identified from time to time in
our filings with the SEC.
- tables to follow -
For Investor Relations info: investorrelations@whji.com
Internet Website: www.whitehalljewellers.com
Whitehall Jewellers, Inc.
Statements of Operations
For the three months and six months ended July 31, 2003 and 2002
(unaudited)
(in thousands, except per share data)
Three months ended Six months ended
July 31, 2003 July 31, 2002 July 31, 2003 July 31, 2002
------------- ------------- ------------- -------------
Net sales $ 72,732 $ 76,243 $ 141,881 $ 150,831
Cost of sales (including buying and occupancy
expenses) 48,623 49,703 94,675 97,079
--------- --------- --------- ---------
Gross profit 24,109 26,540 47,206 53,752
Selling, general and administrative expenses 27,251 25,251 53,943 50,878
--------- --------- --------- ---------
Income (loss) from operations (3,142) 1,289 (6,737) 2,874
Interest expense 1,564 1,111 2,472 2,123
--------- --------- --------- ---------
Income (loss) before income taxes (4,706) 178 (9,209) 751
Income tax (benefit) expense (1,835) 64 (3,590) 268
--------- --------- --------- ---------
Net income (loss) $ (2,871) $ 114 $ (5,619) $ 483
========= ========= ========= =========
Basic earnings per share:
Net income (loss) $ (0.20) $ 0.01 $ (0.40) $ 0.03
========= ========= ========= =========
Weighted average common share and common share
equivalents 14,215 14,807 14,210 14,719
========= ========= ========= =========
Diluted earnings per share:
Net income (loss) $ (0.20) $ 0.01 $ (0.40) $ 0.03
========= ========= ========= =========
Weighted average common share and common share
equivalents 14,215 15,594 14,210 15,476
========= ========= ========= =========
For Investor Relations info: investorrelations@whji.com
Internet Website: www.whitehalljewellers.com
Whitehall Jewellers, Inc.
Balance Sheets
(unaudited, in thousands)
July 31, 2003 January 31, 2003 July 31, 2002
------------- ---------------- -------------
ASSETS
Current Assets:
Cash $ 1,399 $ 2,048 $ 2,128
Accounts receivable, net 333 1,621 2,042
Merchandise inventories 206,149 197,859 169,380
Other current assets 1,979 --- 1,265
Prepaid income tax 4,477 1,239 300
Deferred financing costs 261 510 510
Deferred income taxes, net 2,085 2,172 2,461
--------- --------- ---------
Total current assets 216,683 205,449 178,086
Property and equipment, net 63,604 61,634 62,941
Goodwill 5,662 5,662 5,662
Deferred income tax, net --- ---- ---
Deferred financing costs 781 213 468
--------- --------- ---------
Total assets $ 286,730 $ 272,958 $ 247,157
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Revolver loans $ 86,375 $ 94,490 $ 61,694
Term loan, current --- 4,500 5,750
Accounts payable 57,051 24,726 32,119
Customer deposits 3,355 3,454 3,655
Accrued payroll 3,036 3,282 4,989
Income taxes --- 3,261 ---
Other accrued expenses 15,902 13,207 17,945
--------- --------- ---------
Total current liabilities 165,719 146,920 126,152
Term loan --- ---- 1,500
Subordinated debt 640 640 640
Deferred Income Tax 3,879 3,607 1,868
Other long-term liabilities 3,338 3,138 2,907
--------- --------- ---------
Total liabilities 173,576 154,305 133,067
Commitments and contingencies
Stockholders' equity:
Common Stock 18 18 18
Class B common stock --- ---- ---
Additional paid-in capital 105,830 105,795 105,633
Accumulated earnings 43,158 48,777 39,354
--------- --------- ---------
149,006 154,590 145,005
--------- --------- ---------
Less:
Treasury stock, at cost (3,815,900, 3,822,637 and
3,357,646 shares, respectively) (35,852) (35,937) (30,915)
--------- --------- ---------
Total stockholders' equity, net 113,154 118,653 114,090
--------- --------- ---------
Total liabilities and stockholders' equity $ 286,730 $ 272,958 $ 247,157
========= ========= =========
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For Investor Relations info: investorrelations@whji.com
Internet Website: www.whitehalljewellers.com