Exhibit 99.1
THE GYMBOREE CORPORATION REPORTS SECOND QUARTER 2005 RESULTS
SAN FRANCISCO, Aug. 18 /PRNewswire-FirstCall/ -- The Gymboree Corporation
(Nasdaq: GYMB) today reported a loss from continuing operations of $3.7 million
or $0.12 per diluted share for the second fiscal quarter ended July 30, 2005,
compared to a loss from continuing operations of $3.6 million or $0.12 per
diluted share for the same period last year.
Net sales from retail operations for the second fiscal quarter ended July
30, 2005, totaled $129.3 million, a 14% increase over the $113.5 million in net
sales from retail operations for the second fiscal quarter of the prior year. As
previously reported, comparable store sales from retail operations for the
second fiscal quarter increased 9% over the same period last year. Total net
sales for the second fiscal quarter were $132.0 million, an increase of 14%
compared to total net sales of $116.0 million for the second fiscal quarter last
year.
Business Outlook
For the third fiscal quarter, the Company expects comparable store sales to
be flat to slightly positive to the prior year. The Company expects third and
fourth fiscal quarter net income from continuing operations in the range of
$0.20 to $0.22 and $0.30 to $0.33 per diluted share, respectively. For the full
fiscal year 2005, the Company now expects net income from continuing operations
to be in the range of $0.55 to $0.60 per diluted share.
Management Presentation
The live broadcast of the discussion of second fiscal quarter 2005 earnings
results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET)
on Thursday, August 18, 2005. To listen to the live broadcast over the Internet,
please log on to www.gymboree.com, click on "Our Company" at the bottom of the
page, go to "Investor and Media Relations" and then "Conference Calls, Webcasts
& Presentations." A replay of the call will be available two hours after the
broadcast through midnight ET, Wednesday, August 25, 2005, at 800-642-1687,
passcode 8462766, as well as archived on our Website at the same location as the
live Webcast.
About The Gymboree Corporation
The Gymboree Corporation's specialty retail brands offer unique, high-
quality products delivered with personalized customer service. As of July 30,
2005, the Company operated a total of 646 stores: 570 Gymboree(R) retail stores
(542 in the United States and 28 in Canada), 60 Janie and Jack(R) retail shops
and 16 Janeville(R) stores in the United States. The Company also operates
online stores at www.gymboree.com and www.janieandjack.com, and offers directed
parent-child developmental play programs at 518 franchised and company-operated
centers in the United States and 23 other countries.
Forward-Looking Statements
The foregoing financial information for the fiscal quarter-ended July 30,
2005, is un-audited and subject to quarter-end and year-end adjustment, and
could differ materially from the financial information indicated. The foregoing
paragraphs contain forward-looking statements relating to The Gymboree
Corporation's anticipated sales growth and future financial performance. These
are forward-looking statements for purposes of the safe harbor provisions under
the Private Securities Litigation Reform Act of 1995. Actual results could
differ materially as a result of a number of factors, including customer
reactions to new merchandise, service levels and new concepts, success in
meeting our delivery targets, the level of our promotional activity,
unanticipated costs actually incurred in connection with the wind down of our UK
and Ireland operations, our gross margin achievement, our ability to
appropriately manage inventory, general economic conditions, effects of future
embargoes from countries used to source product, and competitive market
conditions. Other factors that may cause actual results to differ materially
include those set forth in the reports that we file from time to time with the
Securities and Exchange Commission, including our annual report on Form 10-K for
the year-ended January 29, 2005. These forward-looking statements reflect The
Gymboree Corporation's expectations as of August 18, 2005. The Gymboree
Corporation undertakes no obligation to update the information provided herein.
NOTE: Gymboree, Janie and Jack and Janeville are registered trademarks of
The Gymboree Corporation.
THE GYMBOREE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share and store data)
(Unaudited)
13 Weeks Ended 26 Weeks Ended
----------------------- -----------------------
July 30, July 31, July 30, July 31,
2005 2004 2005 2004
---------- ---------- ---------- ----------
Net sales:
Retail $ 129,296 $ 113,475 $ 290,075 $ 257,923
Play & Music 2,742 2,509 4,928 5,176
Total net sales 132,038 115,984 295,003 263,099
Cost of goods sold, including
buying and occupancy expenses (84,803) (74,756) (183,138) (159,513)
Gross profit 47,235 41,228 111,865 103,586
Selling, general and
administrative expenses (53,302) (47,075) (109,923) (97,678)
Operating income (loss) (6,067) (5,847) 1,942 5,908
Other income 294 145 501 382
Income (loss) before income
taxes and cumulative
effect of change in
accounting principle (5,773) (5,702) 2,443 6,290
Income tax benefit (expense) 2,062 2,081 (874) (2,296)
Income (loss) from continuing
operations (3,711) (3,621) 1,569 3,994
Income (loss) from discontinued
operations, net of tax 368 (328) 607 62
Income (loss) before
cumulative effect of
change in accounting
principle (3,343) (3,949) 2,176 4,056
Cumulative effect of change in
accounting principle, net of tax -- -- -- 1,228
Net income (loss) $ (3,343) $ (3,949) $ 2,176 $ 5,284
Basic per share amounts:
Income (loss) from continuing
operations $ (0.12) $ (0.12) $ 0.05 $ 0.13
Income (loss) from discontinued
operations, net of tax 0.01 (0.01) 0.02 --
Cumulative effect of change in
accounting principle, net of tax -- -- -- 0.04
Net income (loss) $ (0.11) $ (0.13) $ 0.07 $ 0.17
Diluted per share amounts:
Income (loss) from continuing
operations $ (0.12) $ (0.12) $ 0.05 $ 0.13
Income (loss) from discontinued
operations, net of tax 0.01 (0.01) 0.02 --
Cumulative effect of change in
accounting
principle, net of tax -- -- -- 0.04
Net income (loss) $ (0.11) $ (0.13) $ 0.07 $ 0.17
Weighted average shares
outstanding:
Basic 31,254 30,693 31,210 30,584
Diluted 31,254 30,693 31,607 31,374
Number of stores at end of
period 646 624 * 646 624 *
* Does not include discontinued operations.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
July 30, January 29, July 31,
2005 2005 2004
------------ ------------ ------------
Current Assets
Cash and cash equivalents $ 34,953 $ 30,599 $ 18,495
Marketable securities 38,843 30,000 58,000
Accounts receivable 13,190 16,547 15,870
Merchandise inventories 87,315 97,237 74,931
Income tax receivable 7,764 3,554 --
Prepaid expenses and deferred
taxes 6,105 6,789 2,845
Current assets of discontinued
operations 1,107 1,794 9,051
Total current assets 189,277 186,520 179,192
Property and Equipment, net 147,051 150,746 129,898
Lease Rights, Deferred Taxes and
Other Assets 13,577 14,433 13,223
Total Assets $ 349,905 $ 351,699 $ 322,313
Current Liabilities
Accounts payable $ 38,381 $ 39,241 $ 32,845
Accrued liabilities 37,742 41,803 37,295
Current liabilities of
discontinued operations 1,732 7,144 4,513
Total current liabilities 77,855 88,188 74,653
Long Term Liabilities
Deferred rent and other
liabilities 49,868 46,105 36,380
Stockholders' Equity 222,182 217,406 211,280
Total Liabilities and
Stockholders' Equity $ 349,905 $ 351,699 $ 322,313