[LOGO] E Com Ventures, Inc.
FOR IMMEDIATE RELEASE
Company Contact:
A. Mark Young
Chief Financial Officer
E Com Ventures, Inc.
954-335-9030
E COM VENTURES INC. REPORTS FISCAL YEAR 2005 RESULTS
Sunrise, Fl. - April 25, 2006. E Com Ventures, Inc., (NASDAQ: ECMV) announced
today the results of operations for its fiscal year ended January 28, 2006.
Total revenues for fiscal year 2005 were $234 million, an increase of 3.9% over
the $225 million reported for the prior year. Retail sales for fiscal year 2005
were $216 million, a 7.2% increase over the prior year. Of this increase, 5.8%
resulted from comparable stores sales improvements. Gross profit for fiscal year
2005 was $96.5 million, a 5.7% increase over the prior year amount of $91.3
million. The increase in gross profit was largely due to improvements in retail
sales volume.
During fiscal year 2005 operating expenses increased by a modest $1.3 million
and represented 36.8% of net sales as compared to 37.6% of net sales for fiscal
year 2004. This improvement in operating expenses as a percentage of net sales
is primarily attributable to improvement in the scheduling of hours for store
personnel, which resulted in a reduction in store payroll costs as a percentage
of net sales. The increase in gross profit, better control of operating costs
and an increased number of stores resulted in income from operations of $10.5
million compared to $6.6 million in the prior year.
In fiscal year 2005 the Company achieved income before income taxes of $6.6
million, an increase of 101% over fiscal year 2004. In addition, management has
determined that it is now more likely than not that the Company will realize the
benefit of certain of its deferred tax assets and therefore has reversed a
portion of the prior year's tax asset valuation allowance resulting in an income
tax benefit of $7.6 million in fiscal year 2005 and a net income of
approximately $14.3 million. The Company does not expect a similar tax benefit
in fiscal year 2006.
"In fiscal year 2005, we began seeing the benefits of our programs to better
control store operating expenses while growing sales through comparable store
improvement and opening new stores," said Michael W. Katz, the Company's
President and Chief Executive Officer. "We continue to improve our product
offerings both in fragrances and complimentary products to improve our sales
dollars per retail transaction. The hard work and dedication of our employees
was vital to bringing about this record-breaking year. We remain focused on our
mission to make Perfumania the retail place of choice when buying fragrances and
beauty products."
E COM VENTURES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL YEAR ENDED
--------------------------------------------------------
January 28, 2006 January 29, 2005 January 31, 2004
---------------- ---------------- ----------------
Net sales $ 233,694,081 $ 225,003,201 $ 212,567,569
Cost of goods sold 137,192,922 133,666,605 129,190,549
---------------- ---------------- ----------------
Gross profit 96,501,159 91,336,596 83,377,020
---------------- ---------------- ----------------
Operating expenses:
Selling, general and administrative expenses 80,677,406 78,521,215 82,297,031
Provision for impairment of
assets and store closings 162,370 313,888 593,109
Depreciation and amortization 5,155,645 5,874,591 6,102,823
Expenses incurred in connection with
change of control -- -- 4,931,221
---------------- ---------------- ----------------
Total operating expenses 85,995,421 84,709,694 93,924,184
---------------- ---------------- ----------------
Income (loss) from operations 10,505,738 6,626,902 (10,547,164)
---------------- ---------------- ----------------
Other expenses:
Interest expense, net:
Affiliates (371,458) (248,124) (93,510)
Other (3,506,018) (3,077,497) (2,059,347)
---------------- ---------------- ----------------
(3,877,476) (3,325,621) (2,152,857)
---------------- ---------------- ----------------
Realized loss on investments -- -- (171,679)
---------------- ---------------- ----------------
Income (loss) before income taxes 6,628,262 3,301,281 (12,871,700)
Income tax benefit (provision) 7,637,000 (150,000) --
---------------- ---------------- ----------------
Net income (loss) $ 14,265,262 $ 3,151,281 $ (12,871,700)
================ ================ ================
Basic income (loss) per common share $ 4.84 $ 1.11 $ (5.24)
================ ================ ================
Diluted income (loss) per common share $ 4.23 $ 1.06 $ (5.24)
================ ================ ================
Weighted average number of shares outstanding:
Basic 2,949,146 2,832,107 2,454,340
================ ================ ================
Diluted 3,463,480 3,001,844 2,454,340
================ ================ ================
The Company's fiscal year ends on the Saturday closest to January 31. Fiscal
year 2005 ended on January 28, 2006, fiscal year 2004 ended on January 29, 2005
and fiscal year 2003 ended on January 31, 2004. Each of the fiscal years
presented contain fifty-two weeks.
# # #
This press release may include information presented which contains
forward-looking information, including statements regarding the strategic
direction of the Company. Some of these statements, including those that contain
the words "anticipate," "believe," "plan," "estimate," "expect," "should,"
"intend," and other similar expressions, are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Those
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results, performance or achievements of
those of our industry to be materially different from any future results,
performance or achievements expressed or implied by those forward-looking
statements. Among the factors that could cause actual results, performance or
achievements to differ materially from those described or implied in the
forward-looking statements are our ability to service our obligations, our
ability to comply with the covenants in our credit facility, general economic
conditions, competition, potential technology changes, changes in or the lack of
anticipated changes in the regulatory environment in various countries, the
ability to secure partnership or joint-venture relationships with other
entities, the ability to raise additional capital to finance expansion, the
risks inherent in new product and service introductions and the entry into new
geographic markets and other factors included in our filings with the Securities
and Exchange Commission.