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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) FEBRUARY 18, 2005
THE GYMBOREE CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 000-21250 942615258
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
500 Howard Street, San Francisco, CA 94105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 278-7000
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(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
AUDIT REPORT OR COMPLETED INTERIM REVIEW
(a) On February 18, 2005, the management of The Gymboree Corporation (the
"Company") concluded that the Company's previously issued financial statements
for the quarters ending May 1, 2004, July 31, 2004 and October 30, 2004 should
be restated. The Company is in the process of determining whether other
financial statements will also require restatement.
The Company's management reached its conclusion that such prior
financial statements should be restated in connection with a review of certain
non-cash items relating to its lease accounting practices. The review stemmed
from a public letter issued by the SEC to the American Institute of Certified
Public Accountants on February 7, 2005, which clarified the interpretation of
existing accounting literature applicable to certain leases and leasehold
improvements. Similar to other retailers with numerous operating leases, the
Company will adjust its method of accounting for rent holidays, landlord
allowances and incentives.
The Company expects to record non-cash adjustments affecting results
from continuing operations and net income to conform to the interpretation
provided by the SEC. These adjustments, which will include amounts related to
the Company's new corporate headquarters, retail stores and other operating
leases, have not been finalized. Based on its preliminary assessment, the
Company estimates that it will record an additional non-cash charge in fiscal
2004 of approximately $0.06 to $0.07 per diluted share relating to the Company's
new corporate headquarters. This restatement will impact selling, general and
administrative expenses and is expected to reduce income from continuing
operations and net income for the first, second, third and fourth quarters of
fiscal 2004 by approximately $0.01, $0.02, $0.02, $0.01 per diluted share,
respectively. The Company is currently calculating the impact related to its
retail stores and other operating leases. As a result, the estimated range of
earnings per share for the fourth quarter of fiscal 2004 and for fiscal 2004
that were provided in the press release dated February 3, 2005 by the Company
should not be relied upon.
As a result of the Company's determination to restate its consolidated
financial statements as discussed above, the financial statements included in
the Company's Quarterly Reports on Form 10-Q for the first three quarters of the
fiscal year ended January 29, 2005 should no longer be relied upon. The amount
of the adjustment related to accounting for retail store and other operating
leases, when determined, is likely to affect periods prior to fiscal 2004. The
Company has not determined whether such adjustments will require restatement of
prior periods.
The Company's management has discussed its conclusion disclosed in this
Form 8-K with the Audit Committee of the Board of Directors and Deloitte &
Touche LLP, the Company's independent public accountants.
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press release of The Gymboree Corporation issued February 22, 2005
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE GYMBOREE CORPORATION
Date: February 22, 2005 By: /s/ Blair W. Lambert
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Blair W. Lambert
Chief Operating Officer and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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99.1 Press release of The Gymboree Corporation issued
February 22, 2005
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