EX-99.1 2 v095134_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 Third Quarter 2007 Results

San Francisco, Calif., November 20, 2007 - The Gymboree Corporation (NASDAQ: GYMB) today reported earnings for the third fiscal quarter ended November 3, 2007, of $26.9 million or $0.91 per diluted share. This compares to earnings from continuing operations of $24.6 million or $0.75 per diluted share for the same period of the prior year.  

“Our markdown and promotional strategies allowed us to exceed our original gross margin dollar plan for the quarter despite a more promotional retail environment in the mall,” said Matthew McCauley, Chairman and Chief Executive Officer. “Additionally, our ongoing strategy of being prepared through tight controls on expenses allowed us to leverage SG&A expenses while investing in our new Crazy 8 concept and incremental marketing.”

Net sales from retail operations for the fiscal quarter ended November 3, 2007, totaled $247.6 million, an 18% increase over the $210.0 million in net sales for the third quarter of the prior year. As previously reported, comparable store sales for the third fiscal quarter increased 8% over the same period last year. Total net sales for the third fiscal quarter were $250.7 million, an increase of 18% compared to total net sales of $212.7 million for the third quarter last year.
 
Business Outlook
 
For the fourth fiscal quarter, the Company expects a low single digit comparable store sales increase over the same period of the prior year. The Company expects earnings for the fourth fiscal quarter in the range of $0.78 to $0.80 per diluted share. For the full fiscal year 2007, the Company now expects net income to be in the range of $2.54 to $2.56 per diluted share.

Management Presentations
 
The live broadcast of the discussion of third quarter 2007 financial results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET) on Tuesday, November 20, 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, Tuesday, November 27, 2007, at 800-642-1687, Passcode 8088424.
 
 
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, December 6, 2007, January 10, 2008, and February 7, 2008, 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 November 3, 2007, the Company operated a total of 773 retail stores: 592 Gymboree® stores (562 in the United States and 30 in Canada), 80 Gymboree Outlet stores, 88 Janie and Jack® shops and 13 Crazy 8™ stores 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 540 franchised and Company-operated centers in the United States and 29 other countries.
 
Forward-Looking Statements 
 
The foregoing financial information for the third fiscal quarter ended November 3, 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 November 20, 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.
 
###



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
 
39 Weeks Ended
 
 39 Weeks Ended
 
 
 
November 3,
 
 October 28,
 
November 3,
 
 October 28,
 
 
 
2007
 
 2006
 
2007
 
 2006
  
Net sales:
                          
 Retail
  
$
247,569
  
$
209,987
  
$
634,145
  
$
542,666
  
 Play & Music
    
3,163
    
2,708
    
8,242
    
7,956
  
 Total net sales
    
250,732
    
212,695
    
642,387
    
550,622
  
Cost of goods sold, including
                          
 buying and occupancy expenses
    
(126,020
)
  
(104,037
)
  
(333,661
)
  
(286,404
)
 Gross profit
    
124,712
    
108,658
    
308,726
    
264,218
  
Selling, general and administrative expenses
    
(80,314
)
  
(68,796
)
  
(222,244
)
  
(196,064
)
 Operating income
    
44,398
    
39,862
    
86,482
    
68,154
  
Other income
    
691
    
1,043
    
2,446
    
4,029
  
Income from continuing operations, before income taxes
    
45,089
    
40,905
    
88,928
    
72,183
  
Income tax expense
    
(18,194
)
  
(16,303
)
  
(35,376
)
  
(27,809
)
Income from continuing operations, net of tax
    
26,895
    
24,602
    
53,552
    
44,374
  
Loss from discontinued operations, net of tax
    
-
    
(7,185
)
  
-
    
(8,530
)
 Net income
  
$
26,895
  
$
17,417
  
$
53,552
  
$
35,844
  
                           
Basic per share amounts:
                          
Income from continuing operations, net of tax
  
$
0.94
  
$
0.79
  
$
1.83
  
$
1.40
  
Loss from discontinued operations, net of tax
    
-
    
(0.23
)
  
-
    
(0.27
)
Net income
  
$
0.94
  
$
0.56
  
$
1.83
  
$
1.13
  
                           
Diluted per share amounts:
                          
Income from continuing operations, net of tax
  
$
0.91
  
$
0.75
  
$
1.76
  
$
1.34
  
Loss from discontinued operations, net of tax
    
-
    
(0.22
)
  
-
    
(0.26
)
Net income
  
$
0.91
  
$
0.53
  
$
1.76
  
$
1.08
  
                           
Weighted average shares outstanding:
                          
 Basic
    
28,565
    
31,332
    
29,294
    
31,798
  
 Diluted
    
29,621
    
32,735
    
30,438
    
33,206
  
                           
Operating Data:
                          
Stores Open at the Beginning of the Period
    
739
    
667
    
698
    
642
  
New Stores
    
34
    
26
    
79
    
51
  
Closed Stores
    
-
    
(1
)
  
(4
)
  
(1
)
Stores Open at the End of the Period
    
773
    
692
    
773
    
692
  
                           
Gross Store Square Footage
    
1,489,000
    
1,298,000
    
1,489,000
    
1,298,000
  
Merchandise Inventories per Square foot
  
$
88
  
$
79
  
$
88
  
$
79
  
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

   
November 3,
 
 February 3,
 
 October 28,
 
 
 
2007
 
 2007
 
 2006
  
Current Assets
                
 Cash and cash equivalents
  
$
24,096
  
$
27,493
  
$
25,549
  
 Marketable securities
    
-
    
129,325
    
97,600
  
 Accounts receivable
    
19,403
    
12,988
    
14,112
  
 Merchandise inventories
    
130,520
    
104,293
    
102,784
  
 Prepaid income taxes
    
-
    
-
    
11,471
  
 Prepaid expenses and deferred taxes
    
21,993
    
19,621
    
6,912
  
 Current assets of discontinued operations
    
-
    
126
    
2,143
  
 Total current assets
    
196,012
    
293,846
    
260,571
  
                     
Property and Equipment, net
    
186,680
    
150,251
    
145,521
  
Lease Rights, Deferred Taxes and Other Assets
    
14,750
    
10,111
    
4,716
  
                     
 Total Assets
  
$
397,442
  
$
454,208
  
$
410,808
  
                     
Current Liabilities
                    
 Accounts payable
  
$
62,974
  
$
55,872
  
$
52,835
  
 Accrued liabilities
    
75,078
    
66,334
    
63,452
  
 Income tax payable
    
1,641
    
8,002
    
-
  
 Current liabilities of discontinued operations
    
-
    
1,928
    
3,350
  
 Total current liabilities
    
139,693
    
132,136
    
119,637
  
                     
Long Term Liabilities
                    
 Deferred rent and other liabilities
    
61,242
    
46,345
    
46,628
  
                     
Stockholders' Equity
    
196,507
    
275,727
    
244,543
  
                     
Total Liabilities and Stockholders' Equity
  
$
397,442
  
$
454,208
  
$
410,808