EX-99.1 2 a06-18249_1ex99d1.htm EX-99

Exhibit 99.1

 

Final: For Release

Company Contact:

 

Ronald Ristau

 

Chief Operating Officer

 

Chief Financial Officer

 

(212) 884-2000

 

 

 

Investor/Media Contact:

 

Integrated Corporate Relations

 

(203) 682-8200

 

Investor: Allison Malkin

 

Media: Liz Brady

 

NEW YORK & COMPANY, INC. ANNOUNCES SECOND QUARTER AND SIX MONTH 2006 RESULTS

·                  Second Quarter Net Income of $6.5 Million, or $0.11 Per Diluted Share

·                  Maintains Earnings Outlook

New York, NY — August 17, 2006 — New York & Company, Inc. [NYSE:NWY], a specialty apparel chain with 537 stores, today announced net income for the second quarter ended July 29, 2006 of $6.5 million, or $0.11 per diluted share.

Net sales for the second quarter of fiscal year 2006 increased 4.0% to $264.9 million, as compared to $254.6 million in the second quarter of fiscal year 2005. Comparable store sales for the second quarter decreased 4.0%, compared to a 0.4% increase in the prior year quarter. Net income in the second quarter of fiscal year 2006 was $6.5 million, or $0.11 per diluted share, compared to $12.3 million, or $0.21 per diluted share, in the second quarter of fiscal year 2005. Earnings per share are based on fully diluted shares outstanding of 59.9 million for the second quarter of fiscal year 2006, compared to 57.2 million for the second quarter of fiscal year 2005.

Net sales for the six month period ended July 29, 2006 increased 1.4% to $532.0 million, as compared to $524.6 million in the prior year six month period. Comparable store sales for the six month period ended July 29, 2006 decreased 6.7%, compared to a 2.3% increase in the prior year period. Net income for the six month period ended July 29, 2006 was $12.6 million, or $0.21 per diluted share, compared to $33.7 million, or $0.59 per diluted share, in the prior year period. Earnings per share are based on fully diluted shares outstanding of 59.8 million for the six month period ended July 29, 2006, compared to 56.9 million for the six month period ended July 30, 2005.

Richard P. Crystal, New York & Company’s Chairman and CEO, stated: “While our sales results missed our expectations in the second quarter, our ability to control expenses and tightly manage our inventory enabled us to reach the high end of our guidance.  During the quarter, we refocused our organization on the merchandising and operational disciplines that have made us successful in the past, and we put in place a series of initiatives aimed at improving our



 

performance for the balance of the year and into 2007.  We will continue our diligent control of inventory and expenses while our design and merchandising teams focus on improving our product offering.”

The Company’s balance sheet included $36.9 million in cash and working capital of $53.3 million on July 29, 2006. Inventory as of July 29, 2006 was $102.5 million, as compared to $101.0 million last year.

Capital spending for the first six months of fiscal 2006 was $38.1 million, compared to $42.8 million for the first six months of fiscal year 2005.

Guidance

The Company is also updating its full year guidance and introducing guidance for the third quarter as follows:

Third Quarter

The Company currently forecasts net sales for the third quarter of fiscal year 2006 in the range of $270.0 million to $280.0 million, an increase of 6.1% to 10.1%, compared to actual net sales of $254.4 million for the third quarter of fiscal year 2005. This estimate reflects comparable store sales ranging from flat to 3.0%.  Net income is estimated to be in the range of $6.0 million to $8.3 million, compared to net income of $4.2 million in the third quarter of fiscal year 2005.   Diluted earnings per share for the third quarter of fiscal year 2006 are estimated to be in the range of $0.10 to $0.14, compared to diluted earnings per share of $0.07 for the third quarter of fiscal year 2005. The Company expects diluted shares outstanding to approximate 60.3 million shares for the third quarter of fiscal year 2006, compared to 57.7 million shares for the third quarter of fiscal year 2005.

During the third quarter of fiscal year 2006, the Company plans to open 38 new stores and remodel 15 locations. The Company expects to close three stores during the third quarter of fiscal year 2006 and anticipates having 572 stores in operation at the end of the quarter, as compared to 523 stores in operation at the end of the third quarter of fiscal year 2005. Total selling square footage at the end of the third quarter of fiscal year 2006 is expected to approximate 3.399 million square feet, compared to 3.306 million square feet at the end of the third quarter of fiscal year 2005. Exhibit (5) at the end of this release details the actual and projected store openings, closings, remodels and the related selling square footage by quarter for fiscal year 2006.

Fiscal Year 2006

For full fiscal year 2006, the Company currently estimates net sales in the range of $1,198.0 million to $1,218.0 million. This compares to the Company’s previous guidance range of $1,203.0 million to $1,222.0 million, and actual fiscal year 2005 net sales of $1,130.5 million. This estimate reflects comparable store sales ranging from negative 1.0% to negative 3.0%. Consistent with its previous guidance, the Company currently estimates full fiscal year 2006 net income in the range of $42.2 million to $49.4 million, or $0.70 to $0.82 per diluted share, as compared to actual fiscal year 2005 net income of $58.5 million, or $1.02 per diluted share. The Company expects full year diluted shares outstanding to be approximately 60.2 million for fiscal year 2006, as compared to 57.3 million diluted shares for fiscal year 2005.

For full fiscal year 2006, the Company plans to open approximately 63 new stores and remodel 34 locations. The Company expects to close 14 stores and anticipates having 568 stores in operation



 

at the end of fiscal year 2006, as compared to 519 stores in operation at the end of fiscal year 2005. Total selling square footage at the end of fiscal year 2006 is expected to approximate 3.373 million square feet, compared to 3.254 million square feet at the end of fiscal year 2005.  Exhibit (5) at the end of this release details the actual and projected store openings, closings, remodels and the related selling square footage by quarter for fiscal year 2006.

For full fiscal year 2006, capital spending is estimated to be in the range of $84.0 million to $86.0 million, as compared to $81.1 million in fiscal year 2005. These amounts do not reflect landlord allowances of $18.6 million and $16.0 million, respectively, which are reflected as deferred rent liabilities.

Conference Call Information

A conference call to discuss second quarter of fiscal year 2006 results is scheduled for today Thursday, August 17th, 2006 at 8:00 am Eastern Time.  Investors and analysts interested in participating in the call are invited to dial (800) 289-0572 approximately ten minutes prior to the start of the call.  The conference call will also be web-cast live at www.nyandcompany.com.  A replay of this call will be available until August 24, 2006 and can be accessed by dialing (888) 203-1112 and entering pin number 4479675.

Forward-Looking Statements: This press release contains certain forward-looking statements.  Some of these statements can be identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “could,” “may,” “plan,” “project,” “predict” and similar expressions and include references to assumptions that we believe are reasonable and relate to our future prospects, developments and business strategies.  Such statements are subject to various risks and uncertainties that could cause actual results to differ materially.  These include, but are not limited to:  (i) our ability to open and operate stores successfully; (ii) seasonal fluctuations in our business; (iii) our ability to anticipate and respond to fashion trends and launch new product lines successfully; (iv) general economic conditions, consumer confidence and spending patterns; (v) our dependence on mall traffic for our sales; (vi) the susceptibility of our business to extreme and/or unseasonable weather conditions; (vii) our ability to retain and recruit key personnel; (viii) our reliance on third parties to manage some aspects of our business; (ix) changes in the cost of raw materials, distribution services or labor; (x) our reliance on foreign sources of production; (xi) the potential impact of natural disasters and health concerns relating to outbreaks of widespread diseases, particularly on manufacturing operations of our vendors; (xii) the ability of our manufacturers to manufacture and deliver products in a timely manner while meeting our quality standards; (xiii) our ability to successfully integrate acquired businesses into our existing business; (xiv) our reliance on manufacturers to maintain ethical business practices; (xv) our ability to protect our trademarks and other intellectual property rights; (xvi) our ability to maintain and our reliance on our information systems infrastructure; (xvii) our dependence on the success of our brand; (xviii) competition in our market, including promotional and pricing competition; (xix) our reliance on the effective use of customer information; (xx) the effects of government regulation; (xxi) the control of our company by our sponsors; and (xxii) other risks and uncertainties as described in our documents filed with the SEC, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to revise the forward-looking statements included in this press release to reflect any future events or circumstances.



 

About New York & Company, Inc.

New York & Company, Inc., founded in 1918, is a leading specialty retailer of fashion-oriented, moderately-priced women’s apparel. The Company’s proprietary branded New York & Company ™ merchandise is sold exclusively through its national network of retail stores. The Company currently operates 537 retail stores in 45 states. Additionally, certain product, press release and SEC filing information concerning the Company are available at the Company’s website: www.nyandcompany.com.

 



 

Exhibit (1)

New York & Company, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)

 

 

 

Three months

 

%

 

Three months

 

%

 

 

 

ended

 

of

 

ended

 

of

 

 

 

July 29,

 

net

 

July 30,

 

net

 

(Amounts in thousands, except per share amounts)

 

2006

 

sales

 

2005

 

sales

 

Net sales

 

$

264,858

 

100.0

%

$

254,581

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Costs of goods sold, buying and occupancy costs

 

189,277

 

71.5

%

172,563

 

67.8

%

 

 

 

 

 

 

 

 

 

 

Gross profit

 

75,581

 

28.5

%

82,018

 

32.2

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

64,200

 

24.2

%

60,278

 

23.7

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

11,381

 

4.3

%

21,740

 

8.5

%

 

 

 

 

 

 

 

 

 

 

Interest expense, net of interest income

 

477

 

0.2

%

1,301

 

0.5

%

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

10,904

 

4.1

%

20,439

 

8.0

%

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

4,405

 

1.6

%

8,189

 

3.2

%

 

 

 

 

 

 

 

 

 

 

Net income

 

$

6,499

 

2.5

%

$

12,250

 

4.8

%

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.12

 

 

 

$

0.23

 

 

 

Diluted earnings per share

 

$

0.11

 

 

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic shares of common stock

 

55,656

 

 

 

53,654

 

 

 

Diluted shares of common stock

 

59,852

 

 

 

57,197

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected operating data :

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except square foot data)

 

 

 

 

 

 

 

 

 

Comparable store sales (decrease) increase

 

(4.0

)%

 

 

0.4

%

 

 

Total net sales growth

 

4.0

%

 

 

4.9

%

 

 

Net sales per average selling square foot (a)

 

$

81

 

 

 

$

79

 

 

 

Net sales per average store (b)

 

$

496

 

 

 

$

515

 

 

 

Total selling square footage

 

3,280,075

 

 

 

3,237,471

 

 

 

Average selling square footage per store (c)

 

6,108

 

 

 

6,398

 

 

 

(a)             Net sales per average selling square foot is defined as net sales divided by the average of beginning and end of period selling square feet.

(b)            Net sales per average store is defined as net sales divided by the average of beginning and end of period number of stores.

(c)             Average selling square footage per store is defined as end of period selling square feet divided by end of period number of stores.



 

Exhibit (2)

New York & Company, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)

 

 

 

Six months

 

%

 

Six months

 

%

 

 

 

ended

 

of

 

ended

 

of

 

 

 

July 29,

 

net

 

July 30,

 

net

 

(Amounts in thousands, except per share amounts)

 

2006

 

sales

 

2005

 

sales

 

Net sales

 

$

531,995

 

100.0

%

$

524,556

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Costs of goods sold, buying and occupancy costs

 

377,311

 

70.9

%

344,228

 

65.6

%

 

 

 

 

 

 

 

 

 

 

Gross profit

 

154,684

 

29.1

%

180,328

 

34.4

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

132,684

 

25.0

%

121,204

 

23.1

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

22,000

 

4.1

%

59,124

 

11.3

%

 

 

 

 

 

 

 

 

 

 

Interest expense, net of interest income

 

967

 

0.2

%

2,710

 

0.5

%

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

21,033

 

3.9

%

56,414

 

10.8

%

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

8,477

 

1.5

%

22,684

 

4.4

%

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,556

 

2.4

%

$

33,730

 

6.4

%

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.23

 

 

 

$

0.63

 

 

 

Diluted earnings per share

 

$

0.21

 

 

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic shares of common stock

 

55,441

 

 

 

53,497

 

 

 

Diluted shares of common stock

 

59,798

 

 

 

56,935

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected operating data :

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except square foot data)

 

 

 

 

 

 

 

 

 

Comparable store sales (decrease) increase

 

(6.7

)%

 

 

2.3

%

 

 

Total net sales growth

 

1.4

%

 

 

6.0

%

 

 

Net sales per average selling square foot (a)

 

$

163

 

 

 

$

163

 

 

 

Net sales per average store (b)

 

$

1,008

 

 

 

$

1,068

 

 

 

Total selling square footage

 

3,280,075

 

 

 

3,237,471

 

 

 

Average selling square footage per store (c)

 

6,108

 

 

 

6,398

 

 

 

(a)             Net sales per average selling square foot is defined as net sales divided by the average of beginning and end of period selling square feet.

(b)            Net sales per average store is defined as net sales divided by the average of beginning and end of period number of stores.

(c)             Average selling square footage per store is defined as end of period selling square feet divided by end of period number of stores.



 

Exhibit (3)

New York & Company, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

 

 

 

July 29,

 

January 28,

 

July 30,

 

(Amounts in thousands)

 

2006

 

2006

 

2005

 

 

 

(Unaudited)

 

(Audited)

 

(Unaudited)

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

36,888

 

$

57,436

 

$

57,239

 

Inventories, net

 

102,526

 

109,656

 

100,977

 

Other current assets

 

42,205

 

35,866

 

40,501

 

Total current assets

 

181,619

 

202,958

 

198,717

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

181,949

 

159,388

 

135,351

 

Goodwill and intangible assets

 

43,141

 

41,702

 

40,857

 

Other assets

 

1,949

 

2,227

 

3,282

 

Total assets

 

$

408,658

 

$

406,275

 

$

378,207

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Current portion — long-term debt

 

$

6,000

 

$

6,000

 

$

—

 

Accounts payable

 

68,944

 

90,980

 

66,572

 

Accrued expenses

 

49,770

 

55,261

 

52,285

 

Other current liabilities

 

3,593

 

3,016

 

1,636

 

Total current liabilities

 

128,307

 

155,257

 

120,493

 

 

 

 

 

 

 

 

 

Long-term debt, net of current

 

28,500

 

31,500

 

75,000

 

Deferred rent and other liabilities

 

52,810

 

40,468

 

33,387

 

Total liabilities

 

209,617

 

227,225

 

228,880

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

199,041

 

179,050

 

149,327

 

Total liabilities and stockholders’ equity

 

$

408,658

 

$

406,275

 

$

378,207

 

 

 



Exhibit (4)

New York & Company, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)

 

(Amounts in thousands)

 

Six months
ended
July 29, 
2006

 

Six months
ended
July 30, 
2005

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

Net income

 

$

12,556

 

$

33,730

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

15,651

 

11,041

 

Amortization of deferred financing costs

 

138

 

578

 

Share-based compensation

 

790

 

486

 

Deferred income taxes

 

(1,330

)

(3,833

)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(8,400

)

(6,497

)

Inventories, net

 

7,130

 

(3,811

)

Prepaid expenses

 

186

 

(602

)

Accounts payable

 

(22,036

)

(9,487

)

Accrued expenses

 

(5,140

)

423

 

Income taxes payable

 

587

 

—

 

Other assets and liabilities

 

11,789

 

11,616

 

Net cash provided by operating activities

 

11,921

 

33,644

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

Acquisition of Jasmine Company, Inc., net of cash acquired

 

—

 

(21,246

)

Capital expenditures

 

(38,057

)

(42,772

)

Net cash used in investing activities

 

(38,057

)

(64,018

)

 

 

 

 

 

 

Financing activities

 

 

 

 

 

Proceeds from public offering

 

2,294

 

—

 

Payment of public offering costs

 

(439

)

—

 

Repayment of debt

 

(3,000

)

(1,327

)

Tax benefit from exercise of stock options

 

5,893

 

3,558

 

Proceeds from exercise of stock options

 

840

 

221

 

Net cash provided by financing activities

 

5,588

 

2,452

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(20,548

)

(27,922

)

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

57,436

 

85,161

 

Cash and cash equivalents at end of period

 

$

36,888

 

$

57,239

 

 



Exhibit (5)

New York & Company, Inc. and Subsidiaries
Store Count and Selling Square Footage

 

Fiscal
Year 2006

 

Total stores open
at beginning of
the quarter

 

Number of stores
opened during
the quarter

 

Number of stores
remodeled during
the quarter

 

Number of stores
closed during
the quarter

 

Total stores
open at end of
the quarter

 

1st Quarter (Actual)

 

519

 

14

 

5

 

(3

)

530

 

2nd Quarter (Actual)

 

530

 

10

 

14

 

(3

)

537

 

3rd Quarter (Projected)

 

537

 

38

 

15

 

(3

)

572

 

4th Quarter (Projected)

 

572

 

1

 

—

 

(5

)

568

 

 

 

Fiscal
Year 2006

 

Total selling square
feet at beginning of
the quarter

 

Selling square feet
for stores opened
during the quarter

 

Reduction of
selling square feet
for stores remodeled
during the quarter

 

Reduction of
selling square feet
for stores closed
during the quarter

 

Total selling square
feet at end of
the quarter

 

1st Quarter (Actual)

 

3,254,465

 

64,312

 

(18,297

)

(18,147

)

3,282,333

 

2nd Quarter (Actual)

 

3,282,333

 

43,317

 

(28,166

)

(17,409

)

3,280,075

 

3rd Quarter (Projected)

 

3,280,075

 

168,877

 

(27,135

)

(23,085

)

3,398,732

 

4th Quarter (Projected)

 

3,398,732

 

4,745

 

—

 

(30,063

)

3,373,414