EXHIBIT 99.1
Shoe Pavilion Reports Profit for the
Second Quarter and First Six Months of 2004
PINOLE, Calif.--(BUSINESS WIRE)--Aug. 4, 2004--Shoe Pavilion, Inc.
(Nasdaq SmallCap Market:SHOE) today announced net income of $694,000
or $0.10 per share, for the second quarter ended July 3, 2004 compared
to a net loss of $231,000 or ($0.03) per share, for the second quarter
of 2003. Net income for the six months ended July 3, 2004 was $1.0
million or $0.15 per share, compared to a net loss of $1.5 million or
($0.23) per share, for the same period in 2003.
Comparable store net sales increased 1.6% for the second quarter
ended July 3, 2004 from the same period last year. Net sales for the
second quarter ended July 3, 2004 decreased 2.0% to $20.7 million from
$21.2 million for the same period last year.
Comparable store net sales for the six months ended July 3, 2004
increased 3.7% from the same period last year. Net sales for the six
months ended July 3, 2004 increased 1.4% to $40.3 million from $39.7
for the same period last year.
Gross profit as a percentage of net sales increased to 35.4% and
34.7% for the second quarter and six months ended July 3, 2004,
respectively, from 29.0% and 26.1%, respectively, for the same periods
last year. This improvement in gross profit was in part due to fewer
markdowns taken in the first six months of 2004.
During the quarter ended July 3, 2004 the Company closed two
stores in which the leases had expired. Since the end of the quarter
the Company opened two stores in Arizona, bringing the total number of
stores the Company operates to 85. The Company plans to open two more
stores in Arizona this year.
Shoe Pavilion is an independent off-price footwear retailer on the
West Coast. It offers a broad selection of women's, men's and
children's designer label and name brand footwear such as Converse,
Reebok, Skechers and Nine West, typically at 20% to 60% below
department store regular prices for the same shoes. The Company has 85
stores in California, Washington, Oregon and Arizona.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: This press release contains certain
forward-looking statements that are subject to risks and uncertainties
that could cause the Company's actual results to differ materially
from management's current expectations. These factors include, without
limitation, competitive pressures in the footwear industry, changes in
the level of consumer spending on or preferences in footwear
merchandise, economic and other factors affecting retail market
conditions, the Company's ability to purchase attractive name brand
merchandise at reasonable discounts, the availability of desirable
store locations as well as management's ability to negotiate
acceptable lease terms and maintain supplier and business
relationships and open new stores in a timely manner. Other risk
factors are detailed in the Company's filings with the Securities and
Exchange Commission. The Company intends these forward-looking
statements to speak only at the time of this release and does not
undertake to revise or confirm them as more information becomes
available.
Shoe Pavilion, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts and number of stores)
Thirteen weeks Twenty-six weeks
ended ended
----------------- -----------------
July 3, June 28, July 3, June 28,
2004 2003 2004 2003
-------- -------- -------- --------
Net sales $20,729 $21,162 $40,302 $39,745
Cost of sales and related
occupancy expenses 13,383 15,030 26,331 29,376
-------- -------- -------- --------
Gross profit 7,346 6,132 13,971 10,369
Selling, general and
administrative expenses 6,120 6,427 12,089 12,801
-------- -------- -------- --------
Income (loss) from
operations 1,226 (295) 1,882 (2,432)
Interest expense (70) (89) (142) (149)
-------- -------- -------- --------
Income (loss) before income taxes 1,156 (384) 1,740 (2,581)
Income tax benefit (expense) (462) 153 (694) 1,032
-------- -------- -------- --------
Net income (loss) $694 ($231) $1,046 ($1,549)
======== ======== ======== ========
Earnings (loss) per share:
Basic $0.10 $(0.03) $0.15 $(0.23)
Diluted $0.10 $(0.03) $0.15 $(0.23)
Weighted average shares
outstanding:
Basic 6,800 6,800 6,800 6,800
Diluted 6,925 6,800 6,852 6,800
Stores operated at end of period 83 87
Shoe Pavilion, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
July 3, January 3,
2004 2004
---------- ----------
ASSETS
CURRENT ASSETS:
Cash $944 $1,034
Receivables 39 130
Income tax receivables 4 13
Inventories 33,080 26,960
Deferred income taxes 1,966 1,966
Prepaid expenses 1,717 1,521
---------- ----------
Total current assets 37,750 31,624
---------- ----------
Property and equipment, net 2,734 3,080
Deferred income taxes and other 1,586 1,605
---------- ----------
TOTAL $42,070 $36,309
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Borrowings under credit agreement $4,300 $5,045
Accounts payable 11,131 6,720
Accrued expenses 4,350 3,680
Current portion of capitalized lease
obligations 170 -
---------- ----------
Total current liabilities 19,951 15,445
Deferred rent 1,976 1,767
Commitments and contingencies - -
STOCKHOLDERS' EQUITY:
Preferred stock -- $.001 par value;
1,000,000 shares authorized; no shares
issued or outstanding - -
Common stock -- $.001 par value:
15,000,000 shares authorized; 6,800,000
shares issued and outstanding 7 7
Additional paid-in capital 13,967 13,967
Retained earnings 6,169 5,123
---------- ----------
Total stockholders' equity 20,143 19,097
---------- ----------
TOTAL $42,070 $36,309
========== ==========
CONTACT: Shoe Pavilion, Inc.
John D. Hellmann, 510-222-4405