EX-99.1 2 a08-8684_2ex99d1.htm EX-99.1

Exhibit 99.1

 

 

FINAL:  For Release

 

NEW YORK & COMPANY, INC. ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2007 RESULTS AND PROVIDES OUTLOOK FOR FISCAL YEAR 2008

 

New York, NY — March 20, 2008 — New York & Company, Inc. [NYSE:NWY], a specialty apparel chain with 578 retail stores, today announced results for the fourth quarter and the full fiscal year ended February 2, 2008. The Company’s fiscal year ended February 2, 2008 includes 52 weeks, versus 53 weeks in last year’s fiscal year ended February 3, 2007, with the additional week occurring in the final month of the prior fiscal year. Therefore, the fourth quarter of fiscal year 2006 represents a fourteen-week period and compares to a thirteen-week period in the fourth quarter of fiscal year 2007.

 

Unless otherwise noted, the results of operations discussed below are for the Company’s continuing operations only, the New York & Company brand.

 

For the fourth quarter of fiscal year 2007, net sales were $359.4 million, as compared to $377.3 million for the fourth quarter of fiscal year 2006. Excluding sales from the extra week in fiscal year 2006, total net sales decreased 0.8% and comparable store sales decreased 3.5% for the thirteen-week period ended February 2, 2008. Net income from continuing operations for the fourth quarter of fiscal year 2007 was $11.2 million, or $0.18 per diluted share, as compared to prior year net income from continuing operations of $0.41 per diluted share.

 

For fiscal year 2007, net sales were $1,194.9 million, as compared to net sales of $1,153.3 million for fiscal year 2006. Excluding sales from the extra week in fiscal year 2006, total net sales increased 5.0% and comparable store sales decreased 1.3% for the fifty-two-week period ended February 2, 2008. Net income from continuing operations for fiscal year 2007 was $26.7 million, or $0.44 per diluted share, as compared to prior year net income from continuing operations of $0.81 per diluted share.

 

Richard P. Crystal, New York & Company’s Chairman and CEO, stated: “While we experienced lower sales and earnings in the fourth quarter compared to the prior year, primarily as a result of increased promotional activity due to the challenging retail environment, we did make progress on a number of initiatives.    We continued to see strength in our wear-to-work categories.  We began to see improved product offerings in our accessory assortment, and our e-commerce business continued to grow and exceed plans.  Finally, we were very disciplined in managing our inventory and expenses.  As we move into 2008, we believe continuing these strategies will lead to improved profitability and increased shareholder value.”

 


 

Significant highlights with respect to fiscal 2007 include the following:

 

·                  The successful development of our fashion offerings in the Wear-to-Work and Dress businesses resulted in positive comparable sales for the year.

 

·                  The Company successfully launched its E-commerce store realizing net sales in excess of $22 million during the first full year of operation.

 

·                  The Company controlled expenses through targeted cost saving initiatives instituted early in the third quarter which minimized the impact of reduced leverage from decreases in comparable store sales.  In 2008, the Company expects to realize $8 million of savings from the continuation of these initiatives.

 

·                  Disciplined inventory management in the fourth quarter enabled the Company to reduce inventory by 6.0% on an average store basis as the Company enters fiscal year 2008.

 

·                  The Company opened 54 new stores, remodeled 25 stores and closed 12 stores during the fiscal year, ending the year with 578 stores and 3.3 million selling square feet in operation.

 

·                  The Company strengthened its year-end balance sheet, ending the fiscal year with $73.7 million in cash and reduced debt as compared to a year ago.

 

·                  As of February 2, 2008, all JasmineSola stores were closed and the related exit procedures were substantially complete; therefore, JasmineSola’s results of operations are presented as discontinued operations in the Company’s current and historical financial statements.  For the fourth quarter of fiscal year 2007, JasmineSola’s net loss was $4.3 million, or $0.07 per diluted share, as compared to previously reported guidance of a net loss of $0.11 to $0.14 per diluted share.

 

Outlook

 

Based upon the Company’s strategy to improve margin through disciplined inventory control and targeted, well planned promotion, the Company expects first quarter fiscal year 2008 comparable store sales to decline in the mid to high negative single-digit range.  The current outlook for earnings per diluted share in the first quarter of fiscal year 2008 is in the range of $0.04 to $0.08.  During the first quarter of 2008, the Company plans to open 13 stores and close two stores, ending the quarter with approximately 589 stores.

 

In fiscal 2008, the Company is planning for comparable store sales to be in the low to mid negative single-digit range and earnings per diluted share to range from $0.42 to $0.52.  The Company currently plans to open 25 to 30 stores, close approximately 12 stores and remodel approximately 12 stores, ending the fiscal year with 591 to 596 stores and approximately 3.3 million selling square feet in operation, with new stores representing 112,000 selling square feet.  Capital expenditures are estimated in the range of $48.0 million to $52.0 million in fiscal year 2008 versus $75.5 million in fiscal year 2007.  Depreciation expense for the year is estimated at $46.0 million.

 

 


 

Conference Call Information

A conference call to discuss the fourth quarter of fiscal year 2007 results is scheduled for today Thursday, March 20, 2008 at 9:00 am Eastern Daylight Time.  Investors and analysts interested in participating in the call are invited to dial (800) 922-9655, referencing conference ID number 39035631, 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 midnight on March 27, 2008 and can be accessed by dialing (800) 642-1687 and entering pin number 39035631.

 

 

Investor/Media Contact:

Integrated Corporate Relations

(203) 682-8200

Investor: Allison Malkin

Media: Kellie Baldyga

 

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,” “explore”, “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 and the possible lack of availability of suitable locations on acceptable terms; (ii) seasonal fluctuations in our business; (iii) our ability to anticipate and respond to fashion trends, develop new merchandise 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, recruit and train 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, including federal and state minimum wage rates; (x) our reliance on foreign sources of production, including the disruption of imports by labor disputes, political instability, legal and regulatory matters, duties, taxes, other charges and quotas on imports, local business practices, potential delays in shipping and related pricing impacts and political issues and fluctuation in currency and exchange rates; (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 service any debt we incur from time to time as well as our ability to maintain the requirements that the agreements related to such debt impose upon us; (xiv) the potential impact of national and international security concerns on the retail environment, including any possible military action, terrorist attacks or other hostilities; (xv) our reliance on manufacturers to maintain ethical business practices; (xvi) our ability to protect our trademarks and other intellectual property rights; (xvii) our ability to maintain and our reliance on our information systems infrastructure; (xviii) our dependence on the success of our brand; (xix) competition in our market, including promotional and pricing competition; (xx) our reliance on the effective use of customer information; (xxi) the effects of government regulation; (xxii) the control of our company by our sponsors; and (xxiii) 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 New York & Company retail stores and E-commerce store at www.nyandcompany.com. The Company currently operates 578 stores in 44 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
Condensed Consolidated Statements of Operations
(Unaudited)

 

(Amounts in thousands, except per share amounts)

 

13-weeks
ended
February 2,
2008

 

%
of
net
sales

 

14-weeks
ended
February 3,
2007

 

%
of
net
sales

 

Net sales

 

$

359,413

 

100.0

%

$

377,318

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Cost of goods sold, buying and occupancy costs

 

256,458

 

71.4

%

249,753

 

66.2

%

 

 

 

 

 

 

 

 

 

 

Gross profit

 

102,955

 

28.6

%

127,565

 

33.8

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

83,991

 

23.3

%

86,321

 

22.9

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

18,964

 

5.3

%

41,244

 

10.9

%

 

 

 

 

 

 

 

 

 

 

Interest expense, net of interest income

 

283

 

0.1

%

226

 

0.1

%

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

18,681

 

5.2

%

41,018

 

10.8

%

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

7,509

 

2.1

%

16,042

 

4.2

%

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

11,172

 

3.1

%

24,976

 

6.6

%

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net of taxes

 

(4,300

)

(1.2

)%

(955

)

(0.2

)%

 

 

 

 

 

 

 

 

 

 

Net income

 

$

6,872

 

1.9

%

$

24,021

 

6.4

%

 

 

 

 

 

 

 

 

 

 

Basic earnings per share from continuing operations

 

$

0.19

 

 

 

$

0.44

 

 

 

Basic loss per share from discontinued operations

 

(0.07

)

 

 

(0.02

)

 

 

Basic earnings per share

 

$

0.12

 

 

 

$

0.42

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations

 

$

0.18

 

 

 

$

0.41

 

 

 

Diluted loss per share from discontinued operations

 

(0.07

)

 

 

(0.01

)

 

 

Diluted earnings per share

 

$

0.11

 

 

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic shares of common stock

 

59,237

 

 

 

57,023

 

 

 

Diluted shares of common stock

 

61,214

 

 

 

60,566

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected operating data for continuing operations:

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except square foot data)

 

 

 

 

 

 

 

 

 

Comparable store sales (decrease) increase

 

(3.5

)%

 

 

1.1

%

 

 

Net sales per average selling square foot (a)

 

$

108

 

 

 

$

116

 

 

 

Net sales per average store (b)

 

$

627

 

 

 

$

703

 

 

 

Average selling square footage per store (c)

 

5,757

 

 

 

6,038

 

 

 

(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
Condensed Consolidated Statements of Operations
(Unaudited)

 

(Amounts in thousands, except per share amounts)

 

52-weeks
ended
February 2,
2008

 

%
of
net
sales

 

53-weeks
ended
February 3,
2007

 

%
of
net
sales

 

Net sales

 

$

1,194,944

 

100.0

%

$

1,153,333

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Cost of goods sold, buying and occupancy costs

 

851,739

 

71.3

%

786,757

 

68.2

%

 

 

 

 

 

 

 

 

 

 

Gross profit

 

343,205

 

28.7

%

366,576

 

31.8

%

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

298,325

 

24.9

%

284,664

 

24.7

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

44,880

 

3.8

%

81,912

 

7.1

%

 

 

 

 

 

 

 

 

 

 

Interest expense, net of interest income

 

1,200

 

0.1

%

1,663

 

0.1

%

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

43,680

 

3.7

%

80,249

 

7.0

%

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

17,004

 

1.5

%

31,853

 

2.8

%

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

26,676

 

2.2

%

48,396

 

4.2

%

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net of taxes

 

(31,533

)

(2.6

)%

(2,226

)

(0.2

)%

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(4,857

)

(0.4

)%

$

46,170

 

4.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share from continuing operations

 

$

0.46

 

 

 

$

0.86

 

 

 

Basic loss per share from discontinued operations

 

(0.54

)

 

 

(0.04

)

 

 

Basic (loss) earnings per share

 

$

(0.08

)

 

 

$

0.82

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share from continuing operations

 

$

0.44

 

 

 

$

0.81

 

 

 

Diluted loss per share from discontinued operations

 

(0.52

)

 

 

(0.04

)

 

 

Diluted (loss) earnings per share

 

$

(0.08

)

 

 

$

0.77

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic shares of common stock

 

58,537

 

 

 

56,072

 

 

 

Diluted shares of common stock

 

61,028

 

 

 

60,031

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected operating data for continuing operations:

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except square foot data)

 

 

 

 

 

 

 

 

 

Comparable store sales decrease

 

(1.3

)%

 

 

(2.7

)%

 

 

Net sales per average selling square foot (a)

 

$

364

 

 

 

$

358

 

 

 

Net sales per average store (b)

 

$

2,145

 

 

 

$

2,218

 

 

 

Average selling square footage per store (c)

 

5,757

 

 

 

6,038

 

 

 

(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

 

(Amounts in thousands)

 

February 2,
2008

 

February 3,
2007

 

 

 

(Unaudited)

 

(Audited)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

73,734

 

$

67,858

 

Accounts receivable

 

18,523

 

13,786

 

Income taxes receivable

 

11,730

 

—

 

Inventories, net

 

103,923

 

102,256

 

Prepaid expenses

 

21,991

 

19,583

 

Other current assets

 

1,913

 

2,049

 

Current assets of discontinued operations

 

716

 

9,330

 

Total current assets

 

232,530

 

214,862

 

 

 

 

 

 

 

Property and equipment, net

 

239,557

 

202,364

 

Intangible assets

 

14,843

 

14,843

 

Other assets

 

1,500

 

1,554

 

Non-current assets of discontinued operations

 

26

 

36,176

 

Total assets

 

$

488,456

 

$

469,799

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion — long-term debt

 

$

6,000

 

$

6,000

 

Accounts payable

 

77,177

 

62,954

 

Accrued expenses

 

53,618

 

59,202

 

Other current liabilities

 

3,928

 

10,366

 

Current liabilities of discontinued operations

 

7,328

 

6,376

 

Total current liabilities

 

148,051

 

144,898

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

19,500

 

25,500

 

Deferred rent and other liabilities

 

80,944

 

56,629

 

Non-current liabilities of discontinued operations

 

—

 

1,973

 

Total liabilities

 

248,495

 

229,000

 

 

 

 

 

 

 

Total stockholders’ equity

 

239,961

 

240,799

 

Total liabilities and stockholders’ equity

 

$

488,456

 

$

469,799

 

 

 


 

Exhibit (4)

 

New York & Company, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows

 

(Amounts in thousands)

 

52-weeks
ended
February 2,
2008

 

53-weeks
ended
February 3,
2007

 

 

 

(Unaudited)

 

(Audited)

 

Operating activities

 

 

 

 

 

Net (loss) income

 

$

(4,857

)

$

46,170

 

Less: Loss from discontinued operations, net of taxes

 

(31,533

)

(2,226

)

Income from continuing operations

 

26,676

 

48,396

 

Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:

 

 

 

 

 

Depreciation and amortization

 

38,500

 

31,607

 

Amortization of deferred financing costs

 

234

 

277

 

Share-based compensation expense

 

1,660

 

1,665

 

Deferred income taxes

 

1,262

 

(1,326

)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(4,737

)

(1,117

)

Income taxes receivable

 

(11,730

)

—

 

Inventories, net

 

(1,667

)

3,477

 

Prepaid expenses

 

(2,408

)

(1,129

)

Accounts payable

 

14,223

 

(26,607

)

Accrued expenses

 

(5,575

)

4,109

 

Income taxes payable

 

(6,391

)

6,391

 

Deferred rent

 

18,704

 

19,217

 

Other assets and liabilities

 

2,177

 

(481

)

Net cash provided by operating activities of continuing operations

 

70,928

 

84,479

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

Capital expenditures

 

(75,464

)

(77,536

)

Net cash used in investing activities of continuing operations

 

(75,464

)

(77,536

)

 

 

 

 

 

 

Financing activities

 

 

 

 

 

Net proceeds from public offering

 

—

 

2,295

 

Payment of offering costs related to public offering

 

—

 

(439

)

Repayment of debt

 

(6,000

)

(6,000

)

Payment of financing costs

 

(369

)

—

 

Excess tax benefit from exercise of stock options

 

4,481

 

12,531

 

Proceeds from exercise of stock options

 

265

 

1,209

 

Other

 

(175

)

—

 

Net cash (used in) provided by financing activities of continuing operations

 

(1,798

)

9,596

 

 

 

 

 

 

 

Cash flows from discontinued operations

 

 

 

 

 

Operating cash flows

 

12,628

 

(496

)

Investing cash flows

 

(401

)

(5,415

)

Financing cash flows

 

—

 

—

 

Net cash provided by (used in) discontinued operations

 

12,227

 

(5,911

)

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

5,893

 

10,628

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period (including cash at discontinued operations of $206 and $1,593, respectively)

 

68,064

 

57,436

 

Cash and cash equivalents at end of period (including cash at discontinued operations of $223 and $206, respectively)

 

$

73,957

 

$

68,064

 

 


 

Exhibit (5)

 

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

 

Fiscal
Year 2007

 

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)

 

536

 

11

 

—

 

(2

)

545

 

2nd Quarter (Actual)

 

545

 

14

 

13

 

(2

)

557

 

3rd Quarter (Actual)

 

557

 

12

 

10

 

(1

)

568

 

4th Quarter (Actual)

 

568

 

17

 

2

 

(7

)

578

 

 

Fiscal
Year 2007

 

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)

 

3,236,540

 

52,297

 

—

 

(13,263

)

3,275,574

 

2nd Quarter (Actual)

 

3,275,574

 

58,167

 

(29,640

)

(14,760

)

3,289,341

 

3rd Quarter (Actual)

 

3,289,341

 

52,063

 

(14,752

)

(8,800

)

3,317,852

 

4th Quarter (Actual)

 

3,317,852

 

66,200

 

(5,383

)

(51,219

)

3,327,450