Charming Shoppes, Inc. News
Charming Shoppes Reports Preliminary, Unaudited Fourth Quarter and Full Year Results
BENSALEM, Pa.,
3 Months Ended January 29, 2005 * For the three months ended January 29, 2005, net income was $5,544,000 or $0.05 per diluted share, compared to net income of $10,146,000 or $0.09 per diluted share for the corresponding period ended January 31, 2004, a decrease of 45%. During the fourth quarter of the prior year, General and Administrative expenses were favorably impacted by approximately $5 million on a pre-tax basis, primarily related to employee medical benefit programs. * Net sales for the three months ended January 29, 2005 were $586,100,000, compared to sales of $585,647,000 for the three months ended January 31, 2004. Comparable store sales for the consolidated corporation decreased 2% during the three months ended January 29, 2005. 12 Months Ended January 29, 2005 * For the twelve months ended January 29, 2005, net income was $67,242,000 or $0.54 per diluted share compared to net income of $40,639,000 or $0.35 per diluted share for the corresponding period ended January 31, 2004, an increase of 65%. Net income for the twelve months ended January 31, 2004 included pre-tax expense in the amount of $11,534,000 ($7,340,000 after tax or $0.06 per diluted share) related to the implementation of the Company's Cost Reduction Plan, which was announced on March 18, 2003. * During the year, the Company experienced solid progress in the improvement of its Lane Bryant brand, including strong increases in both the gross margin and operating margin for Lane Bryant. Inventory was well managed at each of the Company's brands, contributing to strong cash flows. During the first two quarters of the fiscal year, the Company reported record net income. * Net sales for the twelve months ended January 29, 2005 increased 2% to $2,332,334,000, compared to sales of $2,285,680,000 for the twelve months ended January 31, 2004. Comparable store sales for the consolidated corporation increased 1% for the twelve months ended January 29, 2005.
Commenting on the fiscal year, Dorrit J.
Changes in Lease-Related Accounting
The Company previously announced a review of its lease-related accounting practices as a result of a clarification issued on
For the fiscal year ended
The Company's restated financial statements will be provided with the filing of its Fiscal 2005 financial results on form 10-K.
First Quarter Earnings Outlook
For the first quarter ending
Charming Shoppes, Inc. will host its fourth quarter fiscal year 2005 earnings conference call today at
This press release, a transcript of prepared conference call remarks, and certain other financial and statistical information will be available, prior to today's conference call, on the Company's corporate website, at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives . An audio rebroadcast of the conference call will be accessible at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives , following the live conference.
The conference call will be recorded on behalf of Charming Shoppes, Inc. and consists of copyrighted material. It may not be re-recorded, reproduced, transmitted or rebroadcast, in whole or in part, without the Company's express written permission. Accessing this call or the rebroadcast represents consent to these terms and conditions. Participation in this call serves as consent to having any comments or statements made appear on any transcript, broadcast or rebroadcast of this call.
At the end of the period, Charming Shoppes, Inc. operated 2,221 stores in 48 states under the names LANE BRYANT(R), FASHION BUG(R), FASHION BUG PLUS(R), and CATHERINES PLUS SIZES(R). During the twelve months ended
This press release and the Company's conference call will contain certain forward-looking statements concerning the Company's operations, performance, and financial condition. These forward-looking statements include statements regarding future performance, sales, expenses, gross margin, capital expenditures, earnings per share, store openings and closings, and other matters. Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those indicated. Such risks and uncertainties may include, but are not limited to: failure to successfully implement the Company's business plan for increased profitability and growth in the plus-size women's apparel business, changes in or miscalculation of fashion trends, extreme or unseasonable weather conditions, economic downturns, the impact of lease accounting adjustments on fiscal year 2005 and prior periods, a weakness in overall consumer demand, failure to find suitable store locations, the ability to hire and train associates, trade restrictions and political or financial instability in countries where goods are manufactured, the interruption of merchandise flow to the Company's retail stores from its centralized distribution facilities, competitive pressures, and the adverse effects of acts or threats of war, terrorism, or other armed conflict on the
CHARMING SHOPPES, INC. (Unaudited) 4th Quarter 4th Quarter Ended Ended (in thousands, except Percent Jan. 29, Percent of Jan. 31, Percent of per share amounts) Change 2005(d) Sales(b) 2004(c)(d) Sales(b) Net sales 0.1 % $586,100 100.0 % $585,647 100.0 % Cost of goods sold, buying, and occupancy (2.1) 427,353 72.9 436,365 74.5 Selling, general, and administrative 10.9 146,041 24.9 131,634 22.5 Expenses related to cost reduction plan (a) (100.0) 0 0.0 566 0.1 Total operating expenses 0.8 573,394 97.8 568,565 97.1 Income from operations (25.6) 12,706 2.2 17,082 2.9 Other income, principally interest 103.0 1,506 0.3 742 0.1 Interest expense 3.6 (3,971) (0.7) (3,832) (0.7) Income before income taxes (26.8) 10,241 1.7 13,992 2.4 Income tax provision 22.1 4,697 0.8 3,846 0.7 Net income (45.4)% $5,544 0.9 % $10,146 1.7 % Basic net income per share $0.05 $0.09 Weighted average shares outstanding 118,362 112,650 Net income per share, assuming dilution $0.05 $0.09 Weighted average shares and equivalents outstanding 120,311 129,090 (a) Expenses related to the Company's Cost Reduction Plan, announced on March 18, 2003. (b) Results do not add due to rounding. (c) Certain prior year amounts have been reclassified to conform to the current-year presentation. (d) Amounts are preliminary and subject to adjustments based on the outcome of the Company's review of its accounting for leases. Twelve Twelve Months Months Ended Ended (in thousands, except Percent Jan. 29, Percent of Jan. 31, Percent of per share amounts) Change 2005(d) Sales(b) 2004(c)(d) Sales(b) Net sales 2.0 % $2,332,334 100.0 % $2,285,680 100.0 % Cost of goods sold, buying, and occupancy (0.2) 1,635,945 70.1 1,638,701 71.7 Selling, general, and administrative 3.4 577,301 24.8 558,248 24.4 Expenses related to cost reduction plan (a) (94.8) 605 0.0 11,534 0.5 Total operating expenses 0.2 2,213,851 94.9 2,208,483 96.6 Income from operations 53.5 118,483 5.1 77,197 3.4 Other income, principally interest 51.1 3,098 0.1 2,050 0.1 Interest expense 0.0 (15,610) (0.7) (15,609) (0.7) Income before income taxes and minority interest 66.5 105,971 4.5 63,638 2.8 Income tax provision 67.4 38,729 1.7 23,141 1.0 Income before minority interest 66.0 67,242 2.9 40,497 1.8 Minority interest in net loss of consolidated subsidiary (100.0) 0.0 142 0.0 Net income 65.5 % $67,242 2.9 % $40,639 1.8 % Basic net income per share $0.58 $0.36 Weighted average shares outstanding 116,196 112,491 Net income per share, assuming dilution $0.54 $0.35 Weighted average shares and equivalents outstanding 133,174 128,558 (a) Expenses related to the Company's Cost Reduction Plan, announced on March 18, 2003. During the third quarter ended October 30, 2004, the Company revised its estimate on a lease obligation related to the Cost Reduction Plan and recognized expense of $605. (b) Results do not add due to rounding. (c) Certain prior year amounts have been reclassified to conform to the current-year presentation. (d) Amounts are preliminary and subject to adjustments based on the outcome of the Company's review of its accounting for leases. CHARMING SHOPPES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) January 29, January 31, (Dollars in thousands, except share amounts) 2005 2004 ASSETS Current assets Cash and cash equivalents $273,049 $123,781 Available-for-sale securities 52,857 55,688 Merchandise inventories 285,120 309,995 Prepaid income taxes 8,670 Deferred taxes 19,320 19,902 Prepayments and other 74,250 57,494 Total current assets 713,266 566,860 Net property, equipment, and leasehold improvements 310,303 318,624 Other assets 270,200 279,395 Total assets $1,293,769 $1,164,879 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $127,819 $135,777 Accrued expenses 140,973 132,996 Income taxes payable 0 1,128 Current portion - long-term debt 16,419 17,278 Total current liabilities 285,211 287,179 Deferred taxes and other non-current liabilities 85,057 69,796 Long-term debt 208,645 202,819 Total long-term liabilities 293,702 272,615 Total stockholders' equity 714,856 605,085 Total liabilities and stockholders' equity $1,293,769 $1,164,879
Certain prior-year amounts have been reclassified to conform to the current-year presentation.
Amounts are preliminary and subject to reclassifications and adjustments based on the outcome of the Company's review of its accounting for leases.
CHARMING SHOPPES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Year Ended January 29, January 31, February 1, (In thousands) 2005 2004 2003 Operating activities Net income (loss) $67,242 $40,639 $(2,770) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 71,265 76,347 79,421 Deferred income taxes 13,999 12,049 5,327 Write-down of Catherines goodwill 0 0 43,975 Cumulative effect of capitalization of cash received from vendors 0 0 7,881 Net loss from disposition of capital assets 736 1,537 3,436 Capitalized interest on conversion of convertible notes 0 0 3,026 Tax benefit related to stock plans 6,469 23 1,505 Other, net 185 (142) (679) Changes in operating assets and liabilities, net of acquisitions: Merchandise inventories 24,875 (23,523) 6,054 Accounts payable (7,958) (12,175) 40,061 Prepaid income taxes (8,670) 0 0 Prepayments and other (16,756) 16,802 16,583 Income taxes payable (1,128) (6,016) 7,144 Accrued expenses and other 7,547 (15,255) (4,972) Net cash provided by operating activities 157,806 90,286 205,992 Investing activities Gross purchases of available-for-sale securities (30,887) (35,440) (58,308) Proceeds from sales of available-for-sale securities 48,206 31,463 54,797 Investment in capital assets (51,249) (45,014) (74,303) Proceeds from sales of capital assets 0 500 801 Increase in other assets (6,984) (6,704) (4,150) Net cash used by investing activities (40,914) (55,195) (81,163) Financing activities Proceeds from short-term borrowings 186,173 221,423 534,499 Repayments of short-term borrowings (186,173) (221,423) (588,795) Proceeds from long-term borrowings 18,098 1,557 164,000 Repayments of long-term borrowings (18,530) (14,566) (84,122) Payments of deferred financing costs (350) (1,500) (5,568) Purchases of treasury stock 0 0 (84,136) Proceeds from issuance of common stock 33,158 1,173 4,679 Net cash provided/(used) by financing activities 32,376 (13,336) (59,443) Increase in cash and cash equivalents 149,268 21,755 65,386 Cash and cash equivalents, beginning of year 123,781 102,026 36,640 Cash and cash equivalents, end of year $273,049 $123,781 $102,026 Non-cash financing and investing activities Common stock issued on conversion of convertible notes $0 $0 $89,105 Equipment acquired through capital leases $5,399 $17,466 $6,997
Amounts are preliminary and subject to reclassifications and adjustments based on the outcome of the Company's review of its accounting for leases.
SOURCE Charming Shoppes, Inc.
