Exhibit 99.1
The Neiman Marcus Group Reports First Quarter Earnings
DALLAS--(BUSINESS WIRE)--Dec. 1, 2004--The Neiman Marcus Group,
Inc. (NYSE:NMG.A)(NYSE:NMG.B) today reported financial results for the
first quarter of fiscal year 2005. For the 13 weeks ended October 30,
2004, the Company reported total revenues of $908 million compared to
$819 million in the prior year. Net earnings were $64 million, or
$1.30 per diluted share in the first quarter of fiscal year 2005
compared to $56 million, or $1.16 per diluted share, in the first
quarter of fiscal year 2004. Excluding the loss on disposition of
Chef's Catalog, adjusted earnings for the first quarter of fiscal year
2005 were $73 million, or $1.49 per diluted share. On an adjusted
basis, earnings improved 31 percent from the first quarter of fiscal
year 2004 to the first quarter of fiscal year 2005. See the attached
"Reconciliation of GAAP Net Earnings to Non-GAAP Adjusted Earnings"
for the reconciliation of adjusted earnings and the Company's
statements regarding the use of this non-GAAP financial measure.
"I am very pleased with our performance as we achieved record
sales and earnings for the quarter," said Burton M. Tansky, President
and Chief Executive Officer. "The outstanding results were
accomplished by leveraging our expense base and improving our gross
margin through an emphasis on full-price selling and disciplined
inventory management."
Mr. Tansky continued, "As a Company, we continue to focus on
producing strong operating results while pursuing our long-term
strategy of outstanding customer service, quality merchandise and
fashion leadership."
Business Segments
First quarter revenues for the Specialty Retail Stores segment,
which consists of Neiman Marcus Stores and Bergdorf Goodman, were $737
million, compared to $665 million in the previous year, which
represents an increase of 10.4 percent at Neiman Marcus Stores and
14.3 percent at Bergdorf Goodman. Comparable revenues for Neiman
Marcus Stores increased 10.6 percent for the first quarter of fiscal
year 2005. First quarter fiscal year 2005 operating earnings for the
Specialty Retail Stores segment were $120 million compared to $91
million in the first quarter of fiscal year 2004.
Neiman Marcus Direct, the Company's direct marketing operation,
reported first quarter fiscal year 2005 revenues of $140 million
compared to $128 million in the previous year, an increase of 9.2
percent. Excluding Chef's Catalog, revenues for Neiman Marcus Direct
for first quarter fiscal year 2005 were $126 million compared to $111
million in the prior year, an increase of 13.1 percent. Operating
earnings for Neiman Marcus Direct were $11 million in the first
quarter which is slightly above 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
On November 8, 2004, the Company announced it had sold its Chef's
Catalog direct marketing business. In connection with the sale, the
Company recorded a pre-tax loss of approximately $15.3 million in its
fiscal first quarter.
The basis of presentation of certain prior year amounts have been
reclassified to conform to the current year presentation.
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, December 1, 2004
beginning at 3:30 p.m. Central Standard 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 makes statements 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 and/or inventory liquidations by
vendors or other retailers; changes in the Company's relationships
with key customers; delays in the receipt of merchandise ordered by
the Company due to work stoppages and/or other causes of delay in
connection with either the manufacture or shipment of such
merchandise; seasonality of the retail business; adverse weather
conditions, particularly during peak selling seasons; delays in store
renovations; 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 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) October 30, November 1,
2004 2003
----------- -----------
ASSETS
- ----------------------------------------------
Current assets:
Cash and cash equivalents $258,367 $127,524
Undivided interests in NMG Credit Card
Master Trust -- 314,138
Accounts receivable 641,236 33,075
Merchandise inventories 881,266 830,319
Other current assets 72,429 73,345
----------- -----------
Total current assets 1,853,298 1,378,401
----------- -----------
Property and equipment, net 706,078 674,970
Other assets 128,112 112,655
----------- -----------
Total assets $2,687,488 $2,166,026
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ----------------------------------------------
Current liabilities:
Accounts payable $293,344 $266,889
Accrued liabilities 347,232 323,188
Bank borrowings 4,200 2,252
Borrowings under Credit Card Facility 225,000 --
----------- -----------
Total current liabilities 869,776 592,329
----------- -----------
Long-term liabilities:
Notes and debentures 249,762 249,739
Other long-term liabilities 115,469 114,463
----------- -----------
Total long-term liabilities 365,231 364,202
----------- -----------
Minority interest 11,474 9,700
Total shareholders' equity 1,441,007 1,199,795
----------- -----------
Total liabilities and shareholders' equity $2,687,488 $2,166,026
=========== ===========
THE NEIMAN MARCUS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
First Quarter Ended
-----------------------
(in thousands, except per share data) October 30, November 1,
2004 2003
----------- -----------
Revenues $907,936 $818,769
Cost of goods sold including buying and
occupancy costs 554,710 510,350
Selling, general and administrative expenses 227,963 211,130
Loss on disposition of Chef's Catalog 15,348 --
----------- -----------
Operating earnings 109,915 97,289
Interest expense, net 4,037 3,462
----------- -----------
Earnings before income taxes and minority
interest 105,878 93,827
Income taxes 40,975 36,592
----------- -----------
Earnings before minority interest 64,903 57,235
Minority interest in net earnings of
subsidiaries (787) (1,010)
----------- -----------
Net earnings $64,116 $56,225
=========== ===========
Weighted average number of common and common
equivalent shares outstanding:
Basic 48,226 47,624
=========== ===========
Diluted 49,133 48,396
=========== ===========
Earnings per share:
Basic $1.33 $1.18
=========== ===========
Diluted $1.30 $1.16
=========== ===========
THE NEIMAN MARCUS GROUP, INC.
OTHER OPERATING DATA
(UNAUDITED)
SEGMENTS: First Quarter Ended
------------------------------
(in millions) October 30, November 1,
2004 2003
-------------- ---------------
REVENUES:
Specialty Retail Stores $737 $665
Direct Marketing 140 128
Other (1) 31 26
-------------- ---------------
Total $908 $819
============== ===============
OPERATING EARNINGS (LOSSES):
Specialty Retail Stores $120 $91
Direct Marketing 11 11
Other (1) (6) (5)
Loss on disposition of Chef's Catalog (15) --
-------------- ---------------
Total $110 $97
============== ===============
OTHER DATA: First Quarter Ended
------------------------------
(in millions) October 30, November 1,
2004 2003
-------------- ---------------
Capital Expenditures $35 $22
Depreciation $23 $21
(1) Other includes the results of operations of Kate Spade LLC,
Gurwitch Products, LLC and corporate expenses.
THE NEIMAN MARCUS GROUP, INC.
RECONCILIATION OF GAAP NET EARNINGS TO NON-GAAP ADJUSTED EARNINGS
(UNAUDITED)
First Quarter Ended
------------------------------
(in thousands except per share data) October 30, November 1,
2004 2003
-------------- ---------------
Net earnings (GAAP) $64,116 $56,225
Loss on disposition of Chef's
Catalog, net of taxes 9,288 --
-------------- ---------------
Adjusted earnings (Non-GAAP) $73,404 $56,225
============== ===============
Diluted earnings per share (GAAP) $1.30 $1.16
Loss on disposition of Chef's
Catalog, net of taxes 0.19 --
-------------- ---------------
Adjusted earnings per share (Non-GAAP) $1.49 $1.16
============== ===============
The Neiman Marcus Group, Inc. believes reporting adjusted earnings
is a more accurate representation of the Company's on-going economic
performance and therefore uses adjusted reporting internally to
evaluate and manage the Company's operations. The Neiman Marcus Group,
Inc. has chosen to provide this information to investors to enable
them to perform more meaningful comparisons of operating results and
as a means to emphasize the results of on-going operations. Adjusted
earnings should be considered in addition to, not as a substitute for,
the Company's other measures of financial performance reported in
accordance with generally accepted accounting principles.
CONTACT: The Neiman Marcus Group, Inc., Dallas
James E. Skinner, 214-743-7625
or
Stacie Shirley, 214-757-2967