Exhibit 99.1
INVESTOR RELATIONS CONTACT:
Blair W. Lambert
Tel: 415-278-7933
investor_relations@gymboree.com
MEDIA RELATIONS CONTACT:
Kimberly Kim
Tel : 415-278-7472
media_relations@gymboree.com
THE GYMBOREE CORPORATION REPORTS FIRST QUARTER 2006 RESULTS
San Francisco, Calif., May 17, 2006 - The Gymboree Corporation (NASDAQ: GYMB)
today reported earnings for the fiscal quarter ended April 29, 2006, of $17.9
million or $0.53 per diluted share including $1.8 million of stock-based
compensation expense ($0.04 per diluted share) arising from the adoption of FAS
Statement 123R. This compares to earnings from continuing operations of $5.3
million or $0.17 per diluted share for the same period of the prior year. The
Company adopted FAS Statement 123R "Share-based Payment" beginning in fiscal
2006.
"Our operating income for the quarter increased over 230% from the prior year,"
said Matthew McCauley, Chief Executive Officer. "We're continuing to see the
impact of our product, marketing, and operating initiatives drive bottom line
success for our shareholders."
Net sales from retail operations for the fiscal quarter ended April 29, 2006,
totaled $186.2 million, a 16% increase over the $160.8 million in net sales from
retail operations for the first fiscal quarter of the prior year. As previously
reported, comparable store sales from retail operations for the first fiscal
quarter increased 13% over the same period last year. Total net sales for the
first fiscal quarter were $188.9 million, an increase of 16% compared to total
net sales of $163.0 million for the first fiscal quarter last year.
BUSINESS OUTLOOK
For the second fiscal quarter, the Company expects a mid to high single digit
comparable store sales increase over the second fiscal quarter of the prior
year. The Company expects a second fiscal quarter net loss in the range of $0.09
to $0.07 per diluted share including stock-based compensation expense of $0.04
per diluted share arising from the adoption of FAS Statement 123R. For the full
fiscal year 2006, the Company now expects net income to be in the range of $1.37
to $1.40 per diluted share including stock-based compensation expense of $0.15.
This full year earnings estimate represents a $0.15 increase over guidance
issued on May 4, 2006, which excluded stock-based compensation expense.
MANAGEMENT PRESENTATION
The live broadcast of the discussion of the first quarter 2006 earnings results
will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET) on
Wednesday, May 17, 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, May 24, 2006, at 800-642-1687,
passcode 8873064, as well as archived on our Web site at the same location as
the live Web cast.
ABOUT THE GYMBOREE CORPORATION
The Gymboree Corporation's specialty retail brands offer unique, high-quality
products delivered with personalized customer service. As of April 29, 2006, the
Company operated a total of 672 stores: 567 Gymboree(R) retail stores (539 in
the United States and 28 in Canada), 19 Gymboree Outlet retail stores, 69 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 540 franchised and company-operated centers in the United States and
27 other countries.
FORWARD-LOOKING STATEMENTS
The foregoing financial information for the fiscal quarter-ended April 29, 2006,
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
liquidation 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 28, 2006. These forward-looking statements
reflect The Gymboree Corporation's expectations as of April 29, 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.
# # #
THE GYMBOREE CORPORATION
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
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(In thousands, except per share and store data)
(Unaudited)
13 WEEKS ENDED
-------------------------
APRIL 29, APRIL 30,
2006 2005
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Net sales:
Retail $ 186,181 $ 160,779
Play & Music 2,767 2,187
----------- -----------
Total net sales 188,948 162,966
Cost of goods sold, including buying and occupancy expenses (98,517) (98,336)
----------- -----------
Gross profit 90,431 64,630
Selling, general and administrative expenses (63,285) (56,621)
----------- -----------
Operating income 27,146 8,009
Other income 1,291 206
----------- -----------
Income before income taxes 28,437 8,215
Income tax expense (10,554) (2,936)
----------- -----------
Income from continuing operations 17,883 5,279
Income from discontinued operations, net of tax - 239
----------- -----------
Net income $ 17,883 $ 5,518
=========== ===========
Basic per share amounts:
Income from continuing operations $ 0.55 $ 0.17
Income from discontinued operations, net of tax - 0.01
----------- -----------
Net income $ 0.55 $ 0.18
=========== ===========
Diluted per share amounts:
Income from continuing operations $ 0.53 $ 0.17
Income from discontinued operations, net of tax - 0.01
----------- -----------
Net income $ 0.53 $ 0.18
=========== ===========
Weighted average shares outstanding:
Basic 32,491 31,166
Diluted 33,596 31,502
Number of stores at end of period 672 647
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In thousands)
(Unaudited)
APRIL 29, JANUARY 28, APRIL 30,
2006 2006 2005
----------- ----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 14,453 $ 32,037 $ 33,759
Marketable securities 156,860 115,000 45,000
Accounts receivable 10,120 12,027 11,333
Merchandise inventories 78,220 100,474 73,116
Prepaid income taxes - 5,285 2,454
Prepaid expenses and deferred taxes 7,626 7,225 5,889
Current assets of discontinued operations - 479 1,601
----------- ----------- -----------
Total current assets 267,279 272,527 173,152
----------- ----------- -----------
Property and Equipment, net 148,464 146,055 146,758
Lease Rights, Deferred Taxes and Other Assets 5,350 6,196 13,910
----------- ----------- -----------
Total Assets $ 421,093 $ 424,778 $ 333,820
=========== =========== ===========
CURRENT LIABILITIES
Accounts payable $ 29,601 $ 45,186 $ 20,698
Accrued liabilities 56,636 55,303 35,958
Current liabilities of discontinued operations - 732 3,906
Income Tax Payable 3,681 - -
----------- ----------- -----------
Total current liabilities 89,918 101,221 60,562
----------- ----------- -----------
LONG TERM LIABILITIES
Deferred rent and other liabilities 49,172 48,480 49,220
Stockholders' Equity 282,003 275,077 224,038
----------- ----------- -----------
Total Liabilities and Stockholders' Equity $ 421,093 $ 424,778 $ 333,820
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