EX-99.1 2 v085888_ex99-1.htm
 
EXHIBIT 99.1
  
 
Investor Relations contact:  
Jeffrey P. Harris
Tel: 415-278-7933
investor_relations@gymboree.com

Media Relations contact:
Jamie Falkowski
Tel: 415-278-7942
media_relations@gymboree.com
 
The Gymboree Corporation Reports Second Quarter 2007 Results

San Francisco, Calif., August 22, 2007 - The Gymboree Corporation (NASDAQ: GYMB) today reported earnings for the second fiscal quarter ended August 4, 2007, of $5.8 million or $0.19 per diluted share. This compares to earnings from continuing operations of $1.2 million or $0.04 per diluted share for the same period of the prior year.  

“During the second quarter, we increased gross profit percentages, leveraged operating expenses and significantly improved our profitability,” said Matthew McCauley, Chairman and Chief Executive Officer. “Our ongoing merchandising, customer acquisition, store base expansion and expense management strategies are proving successful. We expect these strategies to continue to provide benefits throughout the remainder of the year and into 2008.”

Net sales from retail operations for the fiscal quarter ended August 4, 2007, totaled $179.9 million, a 20% increase over the $149.6 million in net sales from continuing retail operations for the second fiscal quarter of the prior year. As previously reported, comparable store sales for the second fiscal quarter increased 5% over the same period last year. Total net sales for the second fiscal quarter were $182.4 million, an increase of 20% compared to total net sales of $152.1 million from continuing operations for the second fiscal quarter last year.
 
Business Outlook
 
For the third fiscal quarter, the Company expects a low to mid-single digit comparable store sales increase over the same period of the prior year. The Company expects earnings for the third fiscal quarter in the range of $0.84 to $0.87 per diluted share. For the full fiscal year 2007, the Company now expects net income to be in the range of $2.50 to $2.53 per diluted share.

Management Presentations

The live broadcast of the discussion of second quarter 2007 financial results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET) on Wednesday, August 22, 2007. 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, August 29, 2007, at 800-642-1687, Passcode 8087449.
 
 
Gymboree reports same store sales results on a quarterly basis and provides a business update at the end of each month. The next monthly business updates will be available on Thursday, September 6, 2007, October 11, 2007, and November 8, 2007, respectively. Please listen to our monthly business update by calling the Company’s Investor Relations Hotline at 415-278-7933. Each monthly recording will be available through Wednesday of the following week after initial release.
 
About The Gymboree Corporation

The Gymboree Corporation’s specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of August 4, 2007, the Company operated a total of 739 retail stores: 585 Gymboree® stores (555 in the United States and 30 in Canada), 70 Gymboree Outlet stores, 83 Janie and Jack® shops and 1 Crazy 8™ store in the United States. The Company also operates online stores at www.gymboree.com, www.janieandjack.com and www.crazy8.com, and offers directed parent-child developmental play programs at 541 franchised and Company-operated centers in the United States and 31 other countries.
 
Forward-Looking Statements 
 
The foregoing financial information for the second fiscal quarter ended August 4, 2007, 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 anticipated sales growth 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, our gross margin achievement, our ability to appropriately manage inventory, general economic conditions, effects of future embargos 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 February 3, 2007. These forward-looking statements reflect The Gymboree Corporation’s expectations as of August 22, 2007. The Gymboree Corporation undertakes no obligation to update the information provided herein.
 
Gymboree and Janie and Jack are registered trademarks of The Gymboree Corporation. Crazy 8 is a trademark of The Gymboree Corporation.

###
 
2


EXHIBIT A
 
THE GYMBOREE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share and operating data)
(Unaudited)
 
   
13 Weeks Ended
  
 13 Weeks Ended
  
 26 Weeks Ended
  
 26 Weeks Ended
  
   
August 4,
  
  July 29,
  
 August 4,
  
 July 29,
  
   
2007
  
 2006
  
 2007
  
 2006
  
Net sales:
    
                   
Retail
  
$
179,854
  
$
149,643
  
$
386,575
  
$
332,679
  
Play & Music
    
2,500
    
2,481
    
5,079
    
5,248
  
Total net sales
    
182,354
    
152,124
    
391,654
    
337,927
  
Cost of goods sold, including buying and occupance expenses
    
(102,141
)
  
(86,873
)
  
(207,641
)
  
(182,367
)
Gross profit
    
80,213
    
65,251
    
184,013
    
155,560
  
Selling, general and administrative expenses
    
(71,737
)
  
(65,434
)
  
(141,930
)
  
(127,268
)
Operating income (loss)
    
8,476
    
(183
)
  
42,083
    
28,292
  
Other income
    
637
    
1,748
    
1,755
    
2,986
  
Income from continuing operations, before income taxes
    
9,113
    
1,565
    
43,838
    
31,278
  
Income tax expense
    
(3,311
)
  
(405
)
  
(17,181
)
  
(11,506
)
Income from continuing operations, net of tax
    
5,802
    
1,160
    
26,657
    
19,772
  
Loss from discontinued operations, net of tax
    
-
    
(616
)
  
-
    
(1,345
)
Net income
  
$
5,802
  
$
544
  
$
26,657
  
$
18,427
  
                           
Basic per share amounts:
                          
Income from continuing operations, net of tax
  
$
0.20
  
$
0.04
  
$
0.90
  
$
0.62
  
Loss from discontinued operations, net of tax
    
-
    
(0.02
)
  
-
    
(0.04
)
Net income
  
$
0.20
  
$
0.02
  
$
0.90
  
$
0.58
  
                           
Diluted per share amounts:
                          
Income from continuing operations, net of tax
  
$
0.19
  
$
0.04
  
$
0.86
  
$
0.59
  
Loss from discontinued operations, net of tax
    
-
    
(0.02
)
  
-
    
(0.04
)
Net income
  
$
0.19
  
$
0.02
  
$
0.86
  
$
0.55
  
                           
Weighted average shares outstanding:
                          
Basic
    
29,323
    
31,570
    
29,659
    
32,031
  
Diluted
    
30,452
    
33,041
    
30,846
    
33,380
  
                           
Operating Data:
                          
Stores Open at the Beginning of the Period
    
720
    
655
    
698
    
642
  
New Stores
    
20
    
12
    
45
    
25
  
Closed Stores
    
(1
)
  
-
    
(4
)
  
-
  
Stores Open at the End of the Period
    
739
    
667
    
739
    
667
  
                           
Gross Store Square Footage
    
1,410,000
    
1,250,000
    
1,410,000
    
1,250,000
  
Merchandise Inventories per Store
  
$
157,000
  
$
139,000
  
$
157,000
  
$
139,000
  

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
   
August 4,
  
February 3,
  
July 29,
    
   
2007
  
2007
  
2006
    
Current Assets
                      
Cash and cash equivalents
  
$
34,023
  
$
27,493
  
$
31,581
    
Marketable securities
    
-
    
129,325
    
85,250
    
Accounts receivable
    
17,700
    
12,988
    
11,068
    
Merchandise inventories
    
115,677
    
104,293
    
92,541
    
Prepaid income taxes
    
18,412
    
-
    
16,056
    
Prepaid expenses and deferred taxes
    
23,406
    
19,621
    
7,422
    
Current assets of discontinued operations
    
-
    
126
    
11,726
    
Total current assets
    
209,218
    
293,846
    
255,644
    
                       
Property and Equipment, net
    
177,983
    
150,251
    
139,740
    
Lease Rights, Deferred Taxes and Other Assets
    
14,104
    
10,111
    
5,580
    
                       
Total Assets
  
$
401,305
  
$
454,208
  
$
400,964
    
                       
Current Liabilities
                      
Accounts payable
  
$
57,391
  
$
55,872
  
$
43,901
    
Accrued liabilities
    
72,385
    
66,334
    
69,512
    
Income tax payable
    
-
    
8,002
    
-
    
Current liabilities of discontinued operations
    
-
    
1,928
    
3,849
    
Total current liabilities
    
129,776
    
132,136
    
117,262
    
                       
Long Term Liabilities
                      
Deferred rent and other liabilities
    
59,574
    
46,345
    
46,475
    
                       
Stockholders' Equity
    
211,955
    
275,727
    
237,227
    
                       
Total Liabilities and Stockholders' Equity
  
$
401,305
  
$
454,208
  
$
400,964
    
 
3