Exhibit 99.1
THE GYMBOREE CORPORATION REPORTS THIRD QUARTER 2005 RESULTS
SAN FRANCISCO, Nov. 16 /PRNewswire-FirstCall/ -- The Gymboree Corporation
(Nasdaq: GYMB) today reported earnings from continuing operations of $12.6
million, or $0.39 per diluted share, for the third fiscal quarter ended October
29, 2005, compared to earnings from continuing operations of $7.5 million, or
$0.24 per diluted share, for the same period last year. Operating income for the
quarter increased over 200% to $22.7 million compared to $7.4 million in the
prior year.
Net sales from retail operations for the third fiscal quarter ended October
29, 2005, totaled $174.5 million, a 14% increase over the $152.8 million in net
sales from retail operations for the third fiscal quarter of the prior year. As
previously reported, comparable store sales from retail operations for the third
fiscal quarter increased 10% over the same period last year. Total net sales for
the third fiscal quarter were $177.1 million, an increase of 14% compared to
total net sales of $155.6 million for the third fiscal quarter last year.
Business Outlook
For the fourth fiscal quarter, the Company expects a low to mid single digit
comparable store sales increase over the prior year. The Company continues to
expect fourth fiscal quarter income from continuing operations in the range of
$0.37 to $0.39 per diluted share. For the full fiscal year 2005, the Company now
expects income from continuing operations to be in the range of $0.81 to $0.83
per diluted share.
For the full fiscal year 2006, the Company expects its earnings from
continuing operations before the effect of stock based compensation to be in the
range of $1.03-$1.09 per diluted share. The Company will adopt FAS Statement
123R "Share-Based Payment" beginning in fiscal 2006 which is expected to reduce
earnings in the range of $0.08-$0.10 per diluted share.
Management Presentation
The live broadcast of the discussion of third fiscal quarter 2005 earnings
results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET)
on Wednesday, November 16, 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, November 23, 2005, at
800-642-1687, passcode 1733758, 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 October 29,
2005, the Company operated a total of 663 stores: 574 Gymboree(R) retail stores
(546 in the United States and 28 in Canada), 11 Gymboree(R) Outlet retail
stores, 62 Janie and Jack(R) retail shops and 16 Janeville(R) retail 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 522 franchised and company-operated centers in the United States and
24 other countries.
Forward-Looking Statements
The foregoing financial information for the fiscal quarter-ended October 29,
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 cash flows 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 November 16, 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 INCOME
(In thousands, except per share and store data)
(Unaudited)
13 Weeks Ended 39 Weeks Ended
--------------------------- ---------------------------
October 29, October 30, October 29, October 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net sales:
Retail $ 174,507 $ 152,823 $ 464,582 $ 410,746
Play & Music 2,576 2,785 7,505 7,961
Total net sales 177,083 155,608 472,087 418,707
Cost of goods sold,
including buying and
occupancy expenses (95,779) (93,944) (278,918) (253,457)
Gross profit 81,304 61,664 193,169 165,250
Selling, general and
administrative expenses (58,638) (54,306) (168,561) (151,984)
Operating income 22,666 7,358 24,608 13,266
Other income 488 69 989 451
Income before income taxes
and cumulative effect of
change in accounting
principle 23,154 7,427 25,597 13,717
Income tax benefit
(expense) (1) (10,588) 122 (11,462) (2,174)
Income from continuing
operations 12,566 7,549 14,135 11,543
Income (loss) from
discontinued operations,
net of tax 46 (3,377) 653 (3,315)
Income before cumulative
effect of change
in accounting principle 12,612 4,172 14,788 8,228
Cumulative effect of change
in accounting principle,
net of tax -- -- -- 1,228
Net income $ 12,612 $ 4,172 $ 14,788 $ 9,456
Basic per share amounts:
Income from continuing
operations $ 0.40 $ 0.25 $ 0.45 $ 0.38
Income (loss) from
discontinued operations,
net of tax -- (0.11) 0.02 (0.11)
Cumulative effect of change
in accounting principle,
net of tax -- -- -- 0.04
Net income $ 0.40 $ 0.14 $ 0.47 $ 0.31
Diluted per share amounts:
Income from continuing
operations $ 0.39 $ 0.24 $ 0.44 $ 0.37
Income (loss) from
discontinued operations,
net of tax -- (0.11) 0.02 (0.11)
Cumulative effect of change
in accounting principle,
net of tax -- -- -- 0.04
Net income $ 0.39 $ 0.13 $ 0.47 $ 0.30
Weighted average shares
outstanding:
Basic 31,370 30,801 31,263 30,657
Diluted 32,051 31,346 31,767 31,355
Number of stores at end of
period 663 642(2) 663 642(2)
(1) Our estimated annual effective tax rate for fiscal 2005 approximates 37%.
Income tax expense for the 13 weeks and 39 weeks ended October 29, 2005
includes approximately $1.9 million or $0.06 per diluted share of
additional expense resulting from the true-up of the fiscal 2004 tax return
filed in the quarter and the establishment of a valuation allowance for
certain deferred tax assets. Income tax expense for the 13 weeks and 39
weeks ended October 30, 2004 includes a $3.4 million or $0.11 per diluted
share tax benefit resulting from a favorable resolution of certain income
tax issues.
(2) Does not include discontinued operations.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 29, January 29, October 30,
2005 2005 2004
------------ ------------ ------------
Current Assets
Cash and cash equivalents $ 34,132 $ 30,599 $ 24,608
Marketable securities 58,275 30,000 40,000
Accounts receivable 12,095 16,547 20,332
Merchandise inventories 100,814 97,237 91,706
Prepaid income taxes 7,752 3,554 --
Prepaid expenses and deferred
taxes 5,700 6,789 3,606
Current assets of discontinued
operations 514 1,794 4,428
Total current assets 219,282 186,520 184,680
Property and Equipment, net 148,492 150,746 146,097
Lease Rights, Deferred Taxes and
Other Assets 4,969 14,433 12,777
Total Assets $ 372,743 $ 351,699 $ 343,554
Current Liabilities
Accounts payable $ 45,404 $ 39,241 $ 38,245
Accrued liabilities 40,812 41,803 43,391
Current liabilities of
discontinued operations 956 7,144 5,631
Total current liabilities 87,172 88,188 87,267
Long Term Liabilities
Deferred rent and other
liabilities 49,458 46,105 39,943
Stockholders' Equity 236,113 217,406 216,344
Total Liabilities and
Stockholders' Equity $ 372,743 $ 351,699 $ 343,554
SOURCE The Gymboree Corporation
-0- 11/16/2005
/CONTACT: investors, Blair W. Lambert, +1-415-278-7933, or
investor_relations@gymboree.com, or media, Kimberly Kim, +1-415-278-7472, or
media_relations@gymboree.com, both of The Gymboree Corporation/
/Web site: http://www.gymboree.com /