Exhibit 99.1
The Neiman Marcus Group Reports Record Results;
Fourth Quarter Earnings Growth of 67%;
Fiscal Year Earnings Growth of 21%
DALLAS--(BUSINESS WIRE)--Sept. 6, 2005--The Neiman Marcus Group,
Inc. (NYSE:NMG.A) (NYSE:NMG.B) today reported financial results for
the fourth quarter and fiscal year 2005.
For the fourth quarter of fiscal year 2005, the Company reported
total revenues of $851 million compared to $784 million in the prior
year. Comparable revenues increased 9.6 percent. Net earnings were $34
million, or $0.69 per diluted share, in the fourth quarter of fiscal
year 2005 compared to $21 million, or $0.42 per diluted share, in the
fourth quarter of fiscal year 2004, an increase of 67 percent.
Excluding the impact of certain items as described below under "Other
Items", adjusted earnings for the fourth quarter of fiscal year 2005
were $26 million, or $0.53 per diluted share, compared to $23 million,
or $0.47 per diluted share, in the fourth quarter of fiscal year 2004,
an increase of 15 percent. 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.
For fiscal year 2005, total revenues were $3.82 billion compared
to $3.52 billion in the prior year. Comparable revenues increased 9.9
percent for fiscal year 2005. Net earnings for fiscal year 2005 were
$249 million, or $5.02 per diluted share, compared to $205 million, or
$4.19 per diluted share, for fiscal year 2004, which represents an
increase of 21 percent. Adjusted earnings for fiscal year 2005 were
$251 million, or $5.06 per diluted share, compared to adjusted
earnings of $200 million, or $4.09 per diluted share, for the prior
year, an increase of 26 percent. Adjusted earnings for fiscal year
2005 and 2004 exclude the impact of certain items as described below
under "Other Items".
"This was an outstanding year for the Neiman Marcus Group," said
Burton M. Tansky, President and Chief Executive Officer. "The
productivity of our business model continued to improve as we achieved
a record operating margin and sales per square foot."
Mr. Tansky continued, "We achieved these record results through
our intense focus on full price selling, efficient inventory
management and disciplined expense control. We believe this strategy,
in combination with our many initiatives, will further strengthen our
position in the luxury market. I commend our entire team for their
efforts and steadfast dedication to outstanding customer service and
merchandise leadership."
Business Segments
Fourth quarter revenues for the Specialty Retail Stores segment,
which consists of Neiman Marcus Stores and Bergdorf Goodman, were $687
million, compared to $636 million in the previous year. Revenues for
the fourth quarter of fiscal year 2005 compared to last year increased
7.0 percent and 14.5 percent at Neiman Marcus Stores and Bergdorf
Goodman, respectively. Comparable store revenues increased 6.4 percent
at Neiman Marcus Stores for the fourth quarter of fiscal year 2005.
Fourth quarter operating earnings for the Specialty Retail Stores
segment were $34 million compared to $31 million in the prior year, an
increase of 8 percent.
Fiscal year 2005 revenues for the Specialty Retail Stores segment,
were $3.10 billion compared to $2.85 billion in the previous year.
Revenues for fiscal year 2005 compared to last year increased 8.3
percent and 12.9 percent at Neiman Marcus Stores and Bergdorf Goodman,
respectively. Comparable store revenues increased 8.1 percent at
Neiman Marcus Stores for fiscal year 2005. Fiscal year 2005 operating
earnings for the Specialty Retail Stores segment were $378 million
compared to $311 million in the prior year, which represents an
increase of 22 percent.
Neiman Marcus Direct, the Company's direct marketing operation,
reported fourth quarter fiscal year 2005 revenues of $134 million
compared to $125 million in the previous year. On a comparable basis,
excluding Chef's Catalog, revenues increased 19.5 percent for the
fourth quarter of fiscal year 2005. Operating earnings for Neiman
Marcus Direct increased to $19 million in the fourth quarter of fiscal
year 2005 from $16 million a year ago, an increase of 20 percent.
Fiscal year 2005 revenues for Neiman Marcus Direct were $592
million compared to $571 million in the previous year. Excluding
Chef's Catalog, revenues for fiscal year 2005 were $578 million. On a
comparable basis, excluding Chef's Catalog, revenues increased 16.3
percent for fiscal year 2005. Operating earnings for Neiman Marcus
Direct increased to $75 million in fiscal year 2005 from $61 million a
year ago, an increase of 23 percent.
The Company's Other segment includes the operations of the Kate
Spade and Laura Mercier brands.
Other Items
The Company sold its Chef's Catalog direct marketing business in
November 2004. Comparable revenues have been adjusted to exclude the
sales of Chef's Catalog prior to its disposition.
In the fourth quarter of fiscal year 2005, the Company recorded a
pretax gain of approximately $6.2 million as a result of the sale of
its private label credit card account portfolio to HSBC Retail
Services and approximately $7.6 million of tax benefits associated
with favorable tax settlements and the reductions in the Company's
deferred tax liabilities.
The Company recorded approximately $1.3 million and $5.4 million
of transaction costs in the third and fourth quarters of fiscal year
2005, respectively, related to the pending sale of the Company to an
investment group consisting of Texas Pacific Group and Warburg Pincus
LLC.
In the first quarter of fiscal year 2005, the Company recorded a
pretax loss of approximately $15.3 million or $0.19 per diluted share,
for the loss on disposition of Chef's Catalog.
In the fourth quarter of fiscal year 2004, the Company recorded a
pretax charge of approximately $3.9 million for the impairment of the
Chef's Catalog trade name.
In the second quarter of fiscal year 2004, the Company recorded
approximately $7.5 million for the impact of favorable settlements
associated with previous tax filings.
The Neiman Marcus Group, Inc. operations include the Specialty
Retail Stores segment and the Direct Marketing segment. The Specialty
Retail Stores segment consists primarily of Neiman Marcus and Bergdorf
Goodman stores. The Direct Marketing segment conducts both print
catalog and online operations under the Neiman Marcus, Horchow and
Bergdorf Goodman brand names. Information about the Company can be
accessed 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 affect 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) July 30, July 31,
2005 2004
----------- -----------
ASSETS
- ----------------------------------------------
Current assets:
Cash and cash equivalents $853,482 $368,367
Accounts receivable 29,886 551,687
Merchandise inventories 748,366 720,277
Deferred income taxes 17,783 9,078
Other current assets 58,964 56,757
----------- -----------
Total current assets 1,708,481 1,706,166
----------- -----------
Property and equipment, net 855,009 750,483
Other assets:
Trademarks and other intangible assets, net 74,134 91,864
Other assets 23,036 69,135
----------- -----------
Total other assets $2,660,660 $2,617,648
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ----------------------------------------------
Current liabilities:
Notes payable and current maturities of
long-term liabilities $1,450 $1,563
Accounts payable 282,887 289,282
Accrued liabilities 332,937 286,833
Current portion of borrowings under Credit
Card Facility -- 150,000
----------- -----------
Total current liabilities 617,274 727,678
----------- -----------
Long-term liabilities:
Notes and debentures 249,780 249,757
Borrowings under Credit Card Facility -- 75,000
Deferred real estate credits 86,575 71,898
Other long-term liabilities 120,973 112,455
----------- -----------
Total long-term liabilities 457,328 509,110
----------- -----------
Minority interest 12,112 10,298
Total shareholders' equity 1,573,946 1,370,562
----------- -----------
Total liabilities and shareholders' equity $2,660,660 $2,617,648
=========== ===========
THE NEIMAN MARCUS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Fourth Quarter
Ended Fiscal Year Ended
------------------- -----------------------
(in thousands, except per July 30, July 31, July 30, July 31,
share data) 2005 2004 2005 2004
--------- --------- ----------- -----------
Revenues $851,391 $784,468 $3,821,924 $3,524,771
Cost of goods sold
including buying and
occupancy costs 601,266 553,231 2,494,172 2,327,229
Selling, general and
administrative expenses 203,600 189,033 900,352 848,453
Impairment charge -- 3,853 -- 3,853
Loss on disposition of
Chef's Catalog -- -- 15,348 --
Gain on credit card
transaction (6,170) -- (6,170) --
Transaction costs 5,396 -- 6,696 --
--------- --------- ----------- -----------
Operating earnings 47,299 38,351 411,526 345,236
Interest expense, net 1,430 4,108 12,378 15,923
--------- --------- ----------- -----------
Earnings before income
taxes and minority
interest 45,869 34,243 399,148 329,313
Income taxes 10,473 13,356 146,487 120,932
--------- --------- ----------- -----------
Earnings before minority
interest 35,396 20,887 252,661 208,381
Minority interest in net
earnings of subsidiaries (1,050) (300) (3,837) (3,549)
--------- --------- ----------- -----------
Net earnings $34,346 $20,587 $248,824 $204,832
========= ========= =========== ===========
Weighted average number of
common and common
equivalent shares
outstanding:
Basic 48,392 48,201 48,330 47,997
========= ========= =========== ===========
Diluted 49,842 49,074 49,531 48,873
========= ========= =========== ===========
Earnings per share:
Basic $0.71 $0.43 $5.15 $4.27
--------- --------- ----------- -----------
Diluted $0.69 $0.42 $5.02 $4.19
========= ========= =========== ===========
THE NEIMAN MARCUS GROUP, INC.
OTHER OPERATING DATA
(UNAUDITED)
SEGMENTS: Fourth Quarter
Ended Fiscal Year Ended
------------------- -----------------------
(in millions) July 30, July 31, July 30, July 31,
2005 2004 2005 2004
--------- --------- ----------- -----------
REVENUES:
Specialty Retail Stores $687 $636 $3,103 $2,850
Direct Marketing 134 125 592 571
Other (1) 30 23 127 104
--------- --------- ----------- -----------
Total $851 $784 $3,822 $3,525
========= ========= =========== ===========
OPERATING EARNINGS:
(LOSSES)
Specialty Retail Stores $34 $31 $378 $311
Direct Marketing 19 16 75 61
Other (1) 3 1 14 13
--------- --------- ----------- -----------
Subtotal 56 48 467 385
Corporate expenses (15) (6) (46) (36)
Loss on disposition of
Chef's Catalog -- -- (15) --
Gain on Credit Card Sale 6 -- 6 --
Impairment Charge -- (4) -- (4)
--------- --------- ----------- -----------
Total $47 $38 $412 $345
========= ========= =========== ===========
OTHER DATA: Fourth Quarter Fiscal Year Ended
Ended
------------------- -----------------------
(in millions) July 30, July 31, July 30, July 31,
2005 2004 2005 2004
--------- --------- ----------- -----------
Capital Expenditures $52 $37 $203 $120
Depreciation 28 26 108 99
(1) Other includes the results of operations of Kate Spade LLC and
Gurwitch Products, LLC.
THE NEIMAN MARCUS GROUP, INC.
RECONCILIATION OF GAAP NET EARNINGS TO NON-GAAP ADJUSTED EARNINGS
(UNAUDITED)
Fourth Quarter
Ended Fiscal Year Ended
------------------- -----------------------
(in thousands, except per July 30, July 31, July 30, July 31,
share data) 2005 2004 2005 2004
--------- --------- ----------- -----------
Net earnings (GAAP) $34,346 $20,587 $248,824 $204,832
Impairment charge, net
of taxes -- 2,350 -- 2,350
Loss on disposition of
Chef's Catalog, net of
taxes -- -- 9,288 --
Gain on credit card
transaction, net of
taxes (3,788) -- (3,788) --
Tax benefits related to
favorable settlements
and other items (7,585) -- (7,585) (7,500)
Transaction costs, net
of taxes 3,313 -- 4,111 --
--------- --------- ----------- -----------
Adjusted earnings (Non-
GAAP) $26,286 $22,937 $250,850 $199,682
========= ========= =========== ===========
Diluted earnings per share
(GAAP) $0.69 $0.42 $5.02 $4.19
Impairment charge, net
of taxes -- 0.05 -- 0.05
Loss on disposition of
Chef's Catalog, net of
taxes -- -- 0.19 --
Gain on credit card
transaction, net of
taxes (0.08) -- (0.08) --
Tax benefits related to
favorable settlements
and other items (0.15) -- (0.15) (0.15)
Transaction costs, net
of taxes 0.07 -- 0.08 --
--------- --------- ----------- -----------
Adjusted earnings per
share (Non-GAAP) $0.53 $0.47 $5.06 $4.09
========= ========= =========== ===========
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.
James E. Skinner, 214-743-7625
or
Stacie Shirley, 214-757-2967