Exhibit 99.1
The Neiman Marcus Group Reports Record Second Quarter Earnings
DALLAS--(BUSINESS WIRE)--March 3, 2004--The Neiman Marcus Group, Inc.
(NYSE:NMG.A)(NYSE:NMG.B) today reported financial results for the second quarter
of fiscal year 2004.
For the 13 weeks ended January 31, 2004, the Company reported total
revenues of $1.05 billion compared to $938 million in the prior year. Net
earnings were $59 million, or $1.21 per diluted share in the second quarter of
fiscal year 2004 compared to $32 million, or $0.68 per diluted share, in the
second quarter of fiscal year 2003. Excluding the $7.5 million, or $0.15 per
diluted share, impact of favorable settlements associated with previous state
tax filings, earnings per diluted share were $1.06 in the second quarter of
fiscal year 2004.
For the 26 weeks ended January 31, 2004, total revenues increased to $1.88
billion compared to $1.67 billion in the prior year and comparable revenues
increased 11.5 percent. Net earnings were $115 million, or $2.37 per diluted
share, for the 26 weeks ended January 31, 2004 compared to $61 million, or $1.27
per diluted share, for the 26 weeks ended February 1, 2003. Earnings before
change in accounting principle, excluding the $7.5 million, or $0.15 per diluted
share, impact described above, were $2.22 per diluted share for the 26 weeks
ended January 31, 2004 compared to $1.58 per diluted share for the 26 weeks
ended February 1, 2003.
"By any measure, our performance this quarter was outstanding," said Burton
M. Tansky, President and Chief Executive Officer. "We surpassed $1 billion in
sales for a quarter for the first time. In addition, our operating divisions
experienced strong earnings growth.
"Consistent with our ongoing strategy, we focused on full-price selling and
reduced our promotional activities this quarter. These efforts, coupled with
disciplined inventory management, contributed to the significant improvement in
gross margin," Mr. Tansky continued. "Together with our strong balance sheet,
these results further underscore the strength of The Neiman Marcus Group."
Mr. Tansky further added, "Considering our 24.4 percent February comparable
store revenue results and the current sales trends we are experiencing, we now
anticipate comparable store revenues for the third quarter to increase in the
range of 14 percent to 16 percent compared to last year."
Business Segments
Second quarter revenues for the Specialty Retail Stores segment, which
consists of Neiman Marcus Stores and Bergdorf Goodman, were $838 million,
compared to $756 million in the previous year. Revenues for the second quarter
of fiscal year 2004 compared to the second quarter of fiscal year 2003 increased
9.6 percent and 20.5 percent at Neiman Marcus Stores and Bergdorf Goodman,
respectively. Comparable revenues for Neiman Marcus Stores increased 9.2 percent
for the second quarter of fiscal year 2004. Second quarter fiscal year 2004
operating earnings for the Specialty Retail Stores segment were $73 million
compared to $44 million in the second quarter of fiscal year 2003.
Neiman Marcus Direct, the Company's direct marketing operation, reported
second quarter fiscal year 2004 revenues of $191 million compared to $161
million in the previous year. Operating earnings for Neiman Marcus Direct
increased to $25 million in the second quarter of fiscal year 2004 from $18
million a year ago.
The Company's Other segment includes the operations of the Kate Spade and
Laura Mercier brands and corporate expenses.
Other Items
In the first quarter of fiscal year 2003, the Company adopted the
provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets". Based upon the valuation results of its third party
appraisal experts, the Company recorded a pretax charge of approximately $24
million in the first quarter of fiscal year 2003 as a result of implementing the
fair value model of the new accounting standard.
A live webcast of the conference call on earnings can be accessed through
the Investor Information section of the Neiman Marcus Group website at
www.neimanmarcusgroup.com on Wednesday, March 3, 2004 beginning at 4:00 p.m.
Central Daylight Time. Following the live broadcast, interested parties may
replay the webcast by accessing this website. To access financial information
that will be presented during the call, please visit the Investor Information
section of the Neiman Marcus Group website at www.neimanmarcusgroup.com.
From time to time, the Company may make statements (including statements
contained in this release) that predict or forecast future events or results,
depend on future events for their accuracy or otherwise contain "forward-looking
information." These statements are made based on management's expectations and
beliefs concerning future events and are not guarantees of future performance.
The Company cautions readers that actual results may differ materially as a
result of various factors, some of which are beyond its control, including but
not limited to: political or economic conditions; terrorist activities in the
United States or escalation in the international war on terrorism; disruptions
in business at the Company's stores, distribution centers or offices; changes in
consumer confidence resulting in a reduction of discretionary spending on goods
that are, or are perceived to be, "luxuries"; changes in demographic or retail
environments; changes in consumer preferences or fashion trends; competitive
responses to the Company's marketing, merchandising and promotional efforts;
changes in the Company's relationships with key customers; delays in the receipt
of merchandise; seasonality of the retail business; adverse weather conditions,
particularly during peak selling seasons; delays in anticipated store openings;
natural disasters; significant increases in paper, printing and postage costs;
litigation that may have an adverse effect on the Company's financial results or
reputation; changes in the Company's relationships with designers, vendors and
other sources of merchandise; the financial viability of the Company's
designers, vendors and other sources of merchandise; the design and
implementation of new information systems or enhancement of existing systems;
changes in foreign currency exchange rates; impact of funding requirements
related to the Company's noncontributory defined benefit pension plan; changes
in the Company's relationships with certain of key sales associates; changes in
key management personnel; changes in the Company's proprietary credit card
arrangement that adversely impact its ability to provide consumer credit; or
changes in government or regulatory requirements increasing the Company's cost
of operations.
These and other factors that may adversely effect the Company's future
performance or financial condition are contained in its Annual Report in Form
10-K and other reports filed with and available from the Securities and Exchange
Commission. The Company undertakes no obligation to update or revise any
forward-looking statements to reflect subsequent events, new information or
future circumstances.
THE NEIMAN MARCUS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands) January 31, February 1,
2004 2003
----------- -----------
ASSETS
- -----------------------------------------------
Current assets:
Cash and cash equivalents $ 251,658 $ 161,229
Undivided interests in NMG Credit Card
Master Trust 164,652 295,321
Accounts receivable 321,005 22,271
Merchandise inventories 658,177 654,309
Other current assets 75,985 70,964
----------- -----------
Total current assets 1,471,477 1,204,094
----------- -----------
Property and equipment, net 674,139 678,131
Other assets 112,380 119,405
----------- -----------
Total assets $2,257,996 $2,001,630
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- -----------------------------------------------
Current liabilities:
Notes payable and current maturities of
long-term liabilities $ 845 $ 2,246
Accounts payable 227,121 258,360
Accrued liabilities 304,103 282,259
----------- -----------
532,069 542,865
----------- -----------
Long-term liabilities:
Notes and debentures 249,745 249,722
Borrowings under Credit Card Facility 111,326 -
Other long-term liabilities 90,884 109,206
----------- -----------
Total long-term liabilities 451,955 358,928
----------- -----------
Minority interest 10,729 9,044
Total shareholders' equity 1,263,243 1,090,793
----------- -----------
Total liabilities and shareholders' equity $2,257,996 $2,001,630
=========== ===========
THE NEIMAN MARCUS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Thirteen Weeks Ended Twenty-Six Weeks Ended
------------------------ -----------------------
(in thousands,
except per share January 31, February 1, January 31, February 1,
data) 2004 2003 2004 2003
----------- ------------ ----------- -----------
Revenues $1,054,124 $ 938,467 $1,878,987 $1,672,550
Cost of goods sold
including buying
and occupancy costs 717,165 654,578 1,225,577 1,108,509
Selling, general and
administrative
expenses 246,958 225,485 466,121 430,393
----------- ------------ ----------- -----------
Operating earnings 90,001 58,404 187,289 133,648
Interest expense, net 3,764 4,345 7,225 7,939
----------- ------------ ----------- -----------
Earnings before
income taxes,
minority interest
and change in
accounting
principle 86,237 54,059 180,064 125,709
Income taxes 26,132 20,813 62,724 48,398
----------- ------------ ----------- -----------
Earnings before
minority interest
and change in
accounting
principle 60,105 33,246 117,340 77,311
Minority interest in
net earnings of
subsidiaries (934) (769) (1,944) (1,509)
----------- ------------ ----------- -----------
Earnings before
change in
accounting
principle 59,171 32,477 115,396 75,802
Change in accounting
principle -
writedown of
intangible assets,
net of taxes - - - (14,801)
----------- ------------ ----------- -----------
Net earnings $ 59,171 $ 32,477 $ 115,396 $ 61,001
=========== ============ =========== ===========
Weighted average
number of common
and common
equivalent shares
outstanding:
Basic 47,954 47,558 47,789 47,627
=========== ============ =========== ===========
Diluted 48,897 47,850 48,647 47,910
=========== ============ =========== ===========
Basic earnings per
share:
Earnings before
change in
accounting
principle $ 1.23 $ 0.68 $ 2.41 $ 1.59
Change in
accounting
principle -
writedown of
intangible
assets, net of
taxes - - - (0.31)
----------- ------------ ----------- -----------
Basic earnings
per share $ 1.23 $ 0.68 $ 2.41 $ 1.28
=========== ============ =========== ===========
Diluted earnings per
share:
Earnings before
change in
accounting
principle $ 1.21 $ 0.68 $ 2.37 $ 1.58
Change in
accounting
principle -
writedown of
intangible
assets, net of
taxes - - - (0.31)
----------- ------------ ----------- -----------
Diluted earnings
per share $ 1.21 $ 0.68 $ 2.37 $ 1.27
=========== ============ =========== ===========
THE NEIMAN MARCUS GROUP, INC.
OTHER OPERATING DATA
(UNAUDITED)
SEGMENTS: Thirteen Weeks Ended Twenty-Six Weeks Ended
----------------------- ------------------------
January 31, February 1, January 31, February 1,
(in millions) 2004 2003 2004 2003
----------- ----------- ------------ -----------
REVENUES:
Specialty Retail
Stores $ 838 $ 756 $ 1,508 $ 1,357
Direct Marketing 191 161 320 276
Other (1) 25 21 51 40
----------- ----------- ------------ -----------
Total $ 1,054 $ 938 $ 1,879 $ 1,673
=========== =========== ============ ===========
OPERATING EARNINGS:
Specialty Retail
Stores $ 73 $ 44 $ 164 $ 118
Direct Marketing 25 18 35 25
Other (1) (8) (4) (12) (9)
----------- ----------- ------------ -----------
Total $ 90 $ 58 $ 187 $ 134
=========== =========== ============ ===========
OTHER DATA: Thirteen Weeks Ended Twenty-Six Weeks Ended
----------------------- ------------------------
January 31, February 1, January 31, February 1,
(in millions) 2004 2003 2004 2003
----------- ----------- ----------- -----------
Capital Expenditures $ 24 $ 20 $ 46 $ 65
Depreciation 25 20 46 40
(1) Other includes the results of operations of Kate Spade LLC,
Gurwitch Products, LLC and corporate expenses.
CONTACT: The Neiman Marcus Group, Inc., Dallas
James E. Skinner, 214-743-7625
or
Stacie Shirley, 214-757-2967