EXHIBIT 99.1
THE GYMBOREE CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR RESULTS
San Francisco, Calif., March 15, 2006 - The Gymboree Corporation (NASDAQ: GYMB)
today reported consolidated financial results for the fourth fiscal quarter and
full year ended January 28, 2006.
FOURTH FISCAL QUARTER ENDED JANUARY 28, 2006
o For the fourth fiscal quarter, net sales were $206.4 million, an increase
of 17% compared to $175.8 million in net sales reported for the same
quarter last year.
o As previously reported, comparable store sales for the quarter increased
14% over the same quarter last year.
o Operating income for the fourth quarter increased to $31.1 million compared
to $3.1 million for the same period of the prior year.
o Net income after tax from continuing operations for the quarter was $20.2
million or $0.60 per diluted share compared to income from continuing
operations of $5.5 million or $0.18 per diluted share for the same period
last year. Income from continuing operations for the quarter includes a
favorable inventory shrink adjustment of $0.04 per diluted share resulting
from the annual year-end inventory count.
FISCAL YEAR 2005 ENDED JANUARY 28, 2006
o Net sales for the 52 week period ended January 28, 2006 (fiscal 2005) were
$678.5 million, an increase of 14% compared to net sales of $594.5 million
for the same period last year.
o Comparable store sales for fiscal 2005 increased 9% over the prior fiscal
year.
o For the fiscal year, net income after tax from continuing operations was
$32.9 million or $1.02 per diluted share, compared to income from
continuing operations of $17.1 million or $0.54 per diluted share for the
same period last year.
BUSINESS OUTLOOK
For the first fiscal quarter of 2006, the Company reaffirms its comparable store
sales guidance of mid-single digits and now expects earnings from continuing
operations to be in the range of $0.28 to $0.30 per diluted share before the
impact of stock-based compensation.
For the full fiscal year ended February 3, 2007, the Company now expects income
from continuing operations in the range of $1.16 to $1.20 per diluted share
before the impact of stock-based compensation. The Company is adopting FAS
Statement 123R "Share-based Payment" for fiscal 2006 which is now expected to
reduce earnings in the range of $0.13 - $0.15 per diluted share.
MANAGEMENT PRESENTATION
The live broadcast of the discussion of fourth quarter and full year 2005
earnings results will be available to interested parties at 2:00 p.m. PT (5:00
p.m. ET) on Wednesday March 15, 2006. 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, March 22, 2006, at
800-642-1687, passcode 6412948, 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 February 25, 2006,
the Company operated a total of 662 stores: 565 Gymboree(R) retail stores (537
in the United States and 28 in Canada), 16 Gymboree Outlet retail stores, 64
Janie and Jack(R) retail shops and 17 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 545 franchised and company-operated centers in the United States and
25 other countries.
FORWARD-LOOKING STATEMENTS
The foregoing sales and earnings figures for the fourth quarter and fiscal year
2005 are 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 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 liquidation of our UK and Ireland
entities, our gross margin achievement, our ability to appropriately manage
inventory, general economic conditions, effects of future embargos 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 March 15, 2006. The Gymboree Corporation
undertakes no obligation to update the information provided herein.
Gymboree, Janie and Jack, and Janeville are registered trademarks of The
Gymboree Corporation.
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THE GYMBOREE CORPORATION
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(In thousands, except per share and store data)
(Unaudited)
13 WEEKS ENDED 52 WEEKS ENDED
----------------------------- -----------------------------
JANUARY 28, JANUARY 29, JANUARY 28, JANUARY 29,
2006 2005 2006 2005
------------- ------------- ------------- -------------
Net sales:
Retail $ 202,925 $ 172,980 $ 667,507 $ 583,725
Play & Music 3,441 2,791 10,946 10,753
------------- ------------- ------------- -------------
Total net sales 206,366 175,771 678,453 594,478
Cost of goods sold, including
buying and occupancy expenses (107,136) (108,898) (386,054) (362,356)
------------- ------------- ------------- -------------
Gross profit 99,230 66,873 292,399 232,122
Selling, general and administrative expenses (68,158) (59,375) (239,036) (211,359)
Lease termination charges - (4,408) - (4,408)
------------- ------------- ------------- -------------
Operating income 31,072 3,090 53,363 16,355
Other income 817 133 1,806 585
------------- ------------- ------------- -------------
Income from continuing operations before income taxes
and cumulative effect of change in accounting principle 31,889 3,223 55,169 16,940
Income tax benefit (expense) (11,675) 2,313 (22,275) 139
------------- ------------- ------------- -------------
Income from continuing operations before cumulative effect 20,214 5,536 32,894 17,079
of change in accounting principle
Income (loss) from discontinued operations, net of tax 138 (6,326) 790 (9,641)
------------- ------------- ------------- -------------
Income (loss) before cumulative effect of change
in accounting principle 20,352 (790) 33,684 7,438
Cumulative effect of change in accounting
principle, net of tax - (21) - 1,206
------------- ------------- ------------- -------------
Net income (loss) $ 20,352 $ (811) $ 33,684 $ 8,644
============= ============= ============= =============
Basic per share amounts:
Income from continuing operations before cumulative effect
of change in accounting principle $ 0.63 $ 0.18 $ 1.04 $ 0.56
Income (loss) from discontinued operations, net of tax - (0.20) 0.03 (0.31)
Cumulative effect of change in accounting
principle, net of tax - - - 0.04
------------- ------------- ------------- -------------
Net income (loss) $ 0.63 $ (0.03) $ 1.07 $ 0.28
============= ============= ============= =============
Diluted per share amounts:
Income from continuing operations before cumulative effect
of change in accounting principle $ 0.60 $ 0.18 $ 1.02 $ 0.54
Income (loss) from discontinued operations, net of tax - (0.20) 0.02 (0.31)
Cumulative effect of change in accounting
principle, net of tax - - - 0.04
------------- ------------- ------------- -------------
Net income $ 0.61 $ (0.03) $ 1.05 $ 0.28
============= ============= ============= =============
Weighted average shares outstanding:
Basic 32,150 31,019 31,485 30,747
Diluted 33,539 31,435 32,178 31,391
Number of stores at end of period 659 648 659 648
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In thousands)
(Unaudited)
JANUARY 28, JANUARY 29,
2006 2005
------------- -------------
CURRENT ASSETS
Cash and cash equivalents $ 32,037 $ 30,599
Marketable securities 115,000 30,000
Accounts receivable 12,027 16,547
Merchandise inventories 100,474 97,237
Prepaid income taxes 5,285 3,554
Prepaid expenses and deferred taxes 7,225 6,789
Current assets of discontinued operations 479 1,794
------------- -------------
Total current assets 272,527 186,520
------------- -------------
Property and Equipment, net 146,056 150,746
Lease Rights, Deferred Taxes and Other Assets 6,195 14,433
------------- -------------
Total Assets $ 424,778 $ 351,699
============= =============
CURRENT LIABILITIES
Accounts payable $ 45,186 $ 39,241
Accrued liabilities 55,303 41,803
Current liabilities of discontinued operations 732 7,144
------------- -------------
Total current liabilities 101,221 88,188
------------- -------------
LONG TERM LIABILITIES
Deferred rent and other liabilities 48,480 46,105
Stockholders' Equity 275,077 217,406
------------- -------------
Total Liabilities and Stockholders' Equity $ 424,778 $ 351,699
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