Exhibit 99.1
The Neiman Marcus Group Reports
61 Percent Increase in Third Quarter Earnings
DALLAS--(BUSINESS WIRE)--June 2, 2004--The Neiman Marcus Group,
Inc. (NYSE:NMG.A)(NYSE:NMG.B) today reported financial results for the
third quarter of fiscal year 2004.
For the 13 weeks ended May 1, 2004, the Company reported total
revenues of $878 million compared to $723 million in the prior year
and comparable revenues increased 21.4 percent. Net earnings were $69
million, or $1.40 per diluted share, in the third quarter of fiscal
year 2004 compared to $41 million, or $0.87 per diluted share, in the
third quarter of fiscal year 2003. For the 13 weeks ended May 1, 2004,
earnings per share increased 61 percent from the prior year.
For the 39 weeks ended May 1, 2004, total revenues increased to
$2.76 billion compared to $2.40 billion in the prior year and
comparable revenues increased 14.4 percent. Net earnings were $184
million, or $3.78 per diluted share, for the 39 weeks ended May 1,
2004, compared to $102 million, or $2.14 per diluted share, for the 39
weeks ended May 3, 2003. Earnings before change in accounting
principle as described below and excluding the $7.5 million, or $0.15
per diluted share, impact of favorable settlements associated with
previous state tax filings recorded in the Company's second quarter of
fiscal year 2004, were $177 million or $3.63 per diluted share, for
the 39 weeks ended May 1, 2004, compared to $117 million, or $2.45 per
diluted share for the 39 weeks ended May 3, 2003.
"We achieved exceptional results this quarter, attaining several
new performance milestones, including our highest ever quarterly
operating income margin and net income," said Burton M. Tansky,
President and Chief Executive Officer.
Mr. Tansky further stated, "This performance is a result of the
many initiatives we have taken over the past few years, including an
intense focus on regular price sales growth, disciplined inventory
management and active expense control. Though we are very pleased with
our results, we remain focused on driving our business to even higher
levels to further enhance shareholder value."
Business Segments
Third quarter revenues for the Specialty Retail Stores segment,
which consists of Neiman Marcus Stores and Bergdorf Goodman, were $722
million compared to $591 million in the previous year. Revenues for
the third quarter of fiscal year 2004 compared to last year increased
21 percent and 30 percent at Neiman Marcus Stores and Bergdorf
Goodman, respectively. Comparable revenues for Neiman Marcus Stores
increased 21 percent for the third quarter of fiscal year 2004. Third
quarter operating earnings for the Specialty Retail Stores segment
were $115 million compared to $68 million in the prior year.
Neiman Marcus Direct, the Company's direct marketing division,
reported third quarter fiscal year 2004 revenues of $126 million
compared to $113 million in the previous year. Operating earnings for
Neiman Marcus Direct were $10 million in the third quarter which is
relatively flat with the results 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, June 2, 2004,
beginning at 3:30 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) May 1, May 3,
2004 2003
----------- ------------
ASSETS
- ----------------------------------------------
Current assets:
Cash and cash equivalents $311,985 $133,670
Undivided interests in NMG Credit Card
Master Trust -- 279,556
Accounts receivable, net 599,581 25,132
Merchandise inventories 715,539 719,118
Other current assets 46,372 58,681
----------- ------------
Total current assets 1,673,477 1,216,157
----------- ------------
Property and equipment, net 685,928 676,059
Other assets 104,158 107,851
----------- ------------
Total assets $2,463,563 $2,000,067
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ----------------------------------------------
Current liabilities:
Notes payable and current maturities of
long-term liabilities $1,237 $1,799
Current portion of borrowings under Credit
Card Facility 37,500 --
Accounts payable 234,264 224,945
Accrued liabilities 316,305 293,145
----------- ------------
Total current liabilities 589,306 519,889
----------- ------------
Long-term liabilities:
Notes and debentures 249,751 249,727
Borrowings under Credit Card Facility 187,500 --
Other long-term liabilities 97,307 87,530
----------- ------------
Total long-term liabilities 534,558 337,257
----------- ------------
Minority interest 12,799 9,462
Total shareholders' equity 1,326,900 1,133,459
----------- ------------
Total liabilities and shareholders' equity $2,463,563 $2,000,067
=========== ============
THE NEIMAN MARCUS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Thirteen Weeks Ended Thirty-Nine Weeks Ended
-------------------- -----------------------
(in thousands, except per May 1, May 3, May 1, May 3,
share data) 2004 2003 2004 2003
---------- --------- ----------- -----------
Revenues $877,576 $722,917 $2,756,563 $2,395,467
Cost of goods sold
including buying and
occupancy costs 543,275 463,713 1,768,852 1,572,222
Selling, general and
administrative expenses 214,706 187,372 680,827 617,765
--------- --------- ----------- -----------
Operating earnings 119,595 71,832 306,884 205,480
Interest expense, net 4,589 4,245 11,814 12,183
--------- --------- ----------- -----------
Earnings before income
taxes, minority interest
and change in accounting
principle 115,006 67,587 295,070 193,297
Income taxes 44,852 26,020 107,576 74,419
--------- --------- ----------- -----------
Earnings before minority
interest and change in
accounting principle 70,154 41,567 187,494 118,878
Minority interest in net
earnings of subsidiaries (1,305) (437) (3,249) (1,946)
--------- --------- ----------- -----------
Earnings before change in
accounting principle 68,849 41,130 184,245 116,932
Change in accounting
principle -- write-down
of intangible assets, net
of taxes -- -- -- (14,801)
--------- --------- ----------- -----------
Net earnings $68,849 $41,130 $184,245 $102,131
========= ========= =========== ===========
Weighted average number of
common and common
equivalent shares
outstanding:
Basic 48,208 47,240 47,929 47,498
========= ========= =========== ===========
Diluted 49,124 47,497 48,806 47,772
========= ========= =========== ===========
Basic earnings per share:
Earnings before change
in accounting principle $1.43 $0.87 $3.84 $2.46
Change in accounting
principle -- write-down
of intangible assets,
net of taxes -- -- -- (0.31)
--------- --------- ----------- -----------
Basic earnings per share $1.43 $0.87 $3.84 $2.15
========= ========= =========== ===========
Diluted earnings per
share:
Earnings before change
in accounting principle $1.40 $0.87 $3.78 $2.45
Change in accounting
principle -- write-down
of intangible assets,
net of taxes -- -- -- (0.31)
--------- --------- ----------- -----------
Diluted earnings per
share $1.40 $0.87 $3.78 $2.14
========= ========= =========== ===========
THE NEIMAN MARCUS GROUP, INC.
OTHER OPERATING DATA
(UNAUDITED)
SEGMENTS: Thirteen Weeks Ended Thirty-Nine Weeks Ended
-------------------- -----------------------
May 1, May 3, May 1, May 3,
(in millions) 2004 2003 2004 2003
--------- ---------- ----------- -----------
REVENUES:
Specialty Retail Stores $722 $591 $2,230 $1,948
Direct Marketing 126 113 446 388
Other (1) 30 19 81 59
--------- ---------- ----------- -----------
Total $878 $723 $2,757 $2,395
========= ========== =========== ===========
OPERATING EARNINGS:
Specialty Retail Stores $115 $68 $279 $186
Direct Marketing 10 10 45 36
Other (1) (5) (6) (17) (16)
--------- ---------- ----------- -----------
Total $120 $72 $307 $206
========= ========== =========== ===========
OTHER DATA: Thirteen Weeks Ended Thirty-Nine Weeks Ended
-------------------- -----------------------
May 1, May 3, May 1, May 3,
(in millions) 2004 2003 2004 2003
---------- --------- ---------- ------------
Capital Expenditures $35 $16 $81 $81
Depreciation 23 18 69 58
(1) Other includes the results of operations of Kate Spade LLC,
Gurwitch Products, LLC and corporate expenses.
PRESENTATION OF ACCOUNTS RECEIVABLE:
A reconciliation of the outstanding balance of the Company's
accounts receivable to the balances recorded by the Company at May 1,
2004, and May 3, 2003, is as follows:
May 1, May 3,
2004 2003
--------------- --------------
(in millions)
Credit card receivables $570 $505
Less: Sold Interests originally
qualifying for Off-Balance Sheet
Accounting -- (225)
--------------- --------------
570 280
Other receivables 30 25
--------------- --------------
Total accounts receivable $600 $305
=============== ==============
At the end of the third quarter of fiscal year 2004, the Company's
entire credit card portfolio was included in accounts receivable in
its condensed consolidated balance sheet and the $225 million
repayment obligation was shown as a liability.
CONTACT: The Neiman Marcus Group, Inc., Dallas
James E. Skinner, 214-743-7625
or
Stacie Shirley, 214-757-2967