EX-99.1 2 a6116569ex991.htm EXHIBIT 99.1

Exhibit 99.1

Neiman Marcus, Inc. Reports First Quarter Earnings

DALLAS--(BUSINESS WIRE)--December 9, 2009--Neiman Marcus, Inc. today reported financial results for the first quarter of fiscal year 2010. For the first quarter of fiscal year 2010, the Company reported total revenues of $868.9 million compared to $985.8 million in the prior year. Comparable revenues decreased 13.7 percent. Operating earnings for the first quarter of fiscal year 2010 were $74.8 million compared to $81.6 million for the first quarter of fiscal year 2009.

“We are pleased with the progress we made in our first quarter,” said Burton M. Tansky, Chairman and CEO of the Company. “As a result of our intense focus on full price selling, inventory management and expense control, we experienced an improvement in our gross margin and EBITDA rates this quarter.”

Mr. Tansky added, “In addition, we further strengthened our balance sheet, ending the quarter with cash of $319 million, an increase of over $200 million from last year. Also, we achieved our inventory reduction goals with ending inventory down approximately 20% compared to last year.”

This release contains information regarding the Company’s EBITDA which is a non-GAAP financial measure. A reconciliation of these figures to the most directly comparable GAAP figures, together with certain other information, can be found at the end of this release.


Other Items

A live webcast of the conference call on earnings can be accessed through the Investor Information section of the Neiman Marcus, Inc. website at www.neimanmarcusgroup.com on Wednesday, December 9, 2009 beginning at 10:00 a.m. Central Standard Time. Following the live broadcast, interested parties may replay the webcast by accessing this website. To access financial information that will be presented during the call, please visit the Investor Information section of the Neiman Marcus, Inc. website at www.neimanmarcusgroup.com.

From time to time, the Company may make statements that predict or forecast future events or results, depend on future events for their accuracy or otherwise contain "forward-looking information." These statements are made based on management's expectations and beliefs concerning future events and are not guarantees of future performance.

The Company cautions readers that actual results may differ materially as a result of various factors, some of which are beyond its control, including but not limited to: political or economic conditions; terrorist activities in the United States and elsewhere; disruptions in business at the Company’s stores, distribution centers or offices; changes in consumer confidence resulting in a reduction of discretionary spending on goods; changes in demographic or retail environments; changes in consumer preferences or fashion trends; competitive responses to the Company’s marketing, merchandising and promotional efforts; changes in the Company’s relationships with key customers; delays in the receipt of merchandise; seasonality of the retail business; adverse weather conditions, particularly during peak selling seasons; delays in anticipated store openings or renovations; natural disasters; significant increases in paper, printing and postage costs; litigation that may have an adverse effect on the Company’s financial results or reputation; changes in the Company’s relationships with designers, vendors and other sources of merchandise; the Company’s success in enforcing its intellectual property rights; the effects of incurring a substantial amount of indebtedness under the Company’s senior secured credit facilities, senior notes and senior subordinated notes and of complying with the related covenants and conditions; the financial viability of the Company’s designers, vendors and other sources of merchandise; the design and implementation of new information systems or enhancement of existing systems; changes in foreign currency exchange rates or inflation rates; impact of funding requirements related to the Company’s noncontributory defined benefit pension plan; changes in the Company’s relationships with certain of key sales associates; changes in key management personnel; changes in the Company’s proprietary credit card arrangement that adversely impact its ability to provide consumer credit; or changes in government or regulatory requirements increasing the Company’s cost of operations.

These and other factors that may adversely effect the Company’s future performance or financial condition are contained in its Annual Report in Form 10-K and other reports filed with and available from the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.


 
NEIMAN MARCUS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
  October 31,   November 1,
(in thousands) 2009 2008
 

ASSETS

Current assets:
Cash and cash equivalents $ 319,215 $ 115,350
Merchandise inventories 863,682 1,084,308
Other current assets   122,893   148,011
Total current assets   1,305,790   1,347,669
 
Property and equipment, net 973,630 1,068,467
Goodwill and intangible assets, net 3,260,633 4,024,580
Other assets   88,075   74,776
Total assets $ 5,628,128 $ 6,515,492
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Accounts payable $ 237,972 $ 249,624
Accrued liabilities   349,130   400,604

Total current liabilities

  587,102   650,228
 
Long-term liabilities:
Long-term debt 2,972,173 2,946,150
Deferred income taxes 690,970 916,072
Other long-term liabilities   446,385   320,441
Total long-term liabilities   4,109,528   4,182,663
 
Total shareholders’ equity   931,498   1,682,601
Total liabilities and shareholders’ equity $ 5,628,128 $ 6,515,492

 
NEIMAN MARCUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
  First Quarter Ended
October 31,   November 1,
(in thousands) 2009 2008
 
 
Revenues $ 868,900 $ 985,787
Cost of goods sold including buying and occupancy costs 534,223 617,743
Selling, general and administrative expenses 218,819 242,829
Income from credit card program, net (13,087) (13,001)
Depreciation expense 35,782 38,599
Amortization of intangible assets 13,845 13,568
Amortization of favorable lease commitments   4,469   4,469
 
Operating earnings 74,849 81,580
 
Interest expense, net   59,365   57,845
 
Earnings before income taxes 15,484 23,735
 
Income taxes   6,963   10,857
 
Net earnings $ 8,521 $ 12,878

 
NEIMAN MARCUS, INC.
OTHER OPERATING DATA
(UNAUDITED)
 
SEGMENTS:   First Quarter Ended
October 31,   November 1,
(dollars in millions)   2009     2008  
 
 
REVENUES:
Specialty Retail Stores $ 721.6 $ 827.1
Direct Marketing   147.3     158.7  
Total $ 868.9   $ 985.8  
 
 
OPERATING EARNINGS:
Specialty Retail Stores $ 87.2 $ 94.4
Direct Marketing 21.7 19.4
Corporate expenses (15.8 ) (14.2 )

Amortization of intangible assets and favorable lease commitments

 

  (18.3 )   (18.0 )
OPERATING EARNINGS $ 74.8   $ 81.6  

 
NEIMAN MARCUS, INC.
OTHER OPERATING DATA
(UNAUDITED)
OTHER DATA:
 
  First Quarter Ended
October 31,   November 1,
(dollars in millions) 2009 2008
 
 
Capital expenditures $ 17.3 $ 33.5
 
Depreciation $ 35.8 $ 38.6
Amortization of intangibles $ 18.3 $ 18.0
 
Rent expense $ 21.0 $ 22.1
 
EBITDA* $ 128.9 $ 138.2

* For an explanation of EBITDA, see “Non-GAAP Financial Measure.”


 
NEIMAN MARCUS, INC.
NON-GAAP FINANCIAL MEASURE
(UNAUDITED)
 

The following table reconciles net earnings as reflected in the Company’s condensed consolidated statements of earnings prepared in accordance with GAAP to EBITDA:

 

  First Quarter Ended
October 31,   November 1,
(dollars in millions) 2009 2008
 
 
Net earnings $ 8.5 $ 12.9
Income taxes 6.9 10.9
Interest expense, net 59.4 57.8
Depreciation 35.8 38.6

Amortization of intangible assets and favorable lease commitments

 

 

18.3

 

18.0

EBITDA $ 128.9 $ 138.2

We present the non-GAAP financial measure EBITDA because we use this measure to monitor and evaluate the performance of our business and believe the presentation of this measure will enhance investors’ ability to analyze trends in our business, evaluate our performance relative to other companies in our industry and evaluate our ability to service our debt. In addition, we use EBITDA as a component of the measurement of incentive compensation.

EBITDA is not a presentation made in accordance with GAAP and this computation may vary from others in the industry. In addition, EBITDA contains some, but not all, adjustments that are taken into account in the calculation of the components of various covenants in the indentures governing the Company’s senior secured Asset-Based Revolving Credit Facility, Senior Secured Term Loan Facility, Senior Notes and Senior Subordinated Notes. EBITDA should not be considered as an alternative to operating earnings or net earnings as a measure of operating performance or cash flows as a measure of liquidity. EBITDA has important limitations as an analytical tool and should not be considered in isolation, or as a substitute for analysis of the Company’s results as reported under GAAP. For example, EBITDA does not reflect cash expenditures, or future requirements, for capital expenditures or contractual commitments; does not reflect changes in, or cash requirements, for working capital needs; does not reflect our considerable interest expense, or the cash requirements necessary to service interest or principal payments, on the Company’s debt; excludes tax payments that represent a reduction in cash available; and does not reflect any cash requirements for assets being depreciated and amortized that may have to be replaced in the future.

CONTACT:
Neiman Marcus, Inc.
James E. Skinner, 214-757-2954
Executive Vice President and
Chief Financial Officer
or
Stacie Shirley, 214-757-2967
Vice President – Finance
and Treasurer