EX-99.1 2 v115422_ex99-1.htm Unassociated Document
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 First Quarter 2008 Results
 
San Francisco, Calif., May 21, 2008 - The Gymboree Corporation (NASDAQ: GYMB) today reported earnings of $25.0 million or $0.86 per diluted share for the first fiscal quarter ended May 3, 2008. This compares to earnings of $20.9 million or $0.67 per diluted share for the same period of the prior year.  
 
“I am very pleased with our financial performance in the first quarter,” said Matthew McCauley, Chairman and Chief Executive Officer. “Despite the challenging retail environment, we were able to deliver close to a 30% increase in earnings per share. Looking forward, we are not anticipating the macro-environment to change significantly and we are continuing to focus on our strategies of acquiring new customers, expanding our store base and controlling expenses to grow earnings.”

Net sales from retail operations for the fiscal quarter ended May 3, 2008, totaled $238.9 million, a 16% increase over the $206.7 million in net sales from retail operations for the first fiscal quarter of the prior year. As previously reported, comparable store sales from retail operations for the first fiscal quarter increased 4% over the same period last year. Total net sales for the first fiscal quarter were $242.1 million, an increase of 16% compared to total net sales of $209.3 million for the first fiscal quarter last year.
 
Business Outlook
 
For the second fiscal quarter of 2008, the Company expects a low single digit comparable store sales increase over the same period of the prior year. The Company continues to expect earnings for the second fiscal quarter in the range of $0.18 to $0.20 per diluted share. For the full fiscal year 2008, the Company expects net income to be in the range of $3.10 to $3.15 per diluted share.
 
 
Management Presentation
 
The live broadcast of the discussion of first quarter 2008 earnings results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET) on Wednesday, May 21, 2008. 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, May 28, 2008, at 800-642-1687, passcode 32812217, as well as archived on our Web site at the same location as the live Web cast.
 
About The Gymboree Corporation
 
The Gymboree Corporation’s specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of May 3, 2008, the Company operated a total of 811 retail stores: 604 Gymboree® stores (574 in the United States and 30 in Canada), 96 Gymboree Outlet stores, 95 Janie and Jack® shops and 16 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 588 franchised and Company-operated centers in the United States and 29 other countries.
 
Forward-Looking Statements 
 
The foregoing financial information for the first fiscal quarter ended May 3, 2008, 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 2, 2008. These forward-looking statements reflect The Gymboree Corporation’s expectations as of May 21, 2008. 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
  
   
May 3,
  
May 5,
  
   
2008
  
2007
  
Net sales:
          
 Retail
  
$
238,917
  
$
206,721
  
 Play & Music
    
3,187
    
2,579
  
 Total net sales
    
242,104
    
209,300
  
Cost of goods sold, including
              
buying and occupancy expenses
    
(118,686
)
  
(105,500
)
 Gross profit
    
123,418
    
103,800
  
Selling, general and administrative expenses
    
(81,825
)
  
(70,193
)
 Operating income
    
41,593
    
33,607
  
Other income
    
280
    
1,118
  
 Income before income taxes
    
41,873
    
34,725
  
Income tax expense
    
(16,836
)
  
(13,870
)
 Net income
  
$
25,037
  
$
20,855
  
               
Net income per share:
              
 Basic
  
$
0.91
  
$
0.70
  
 Diluted
  
$
0.86
  
$
0.67
  
               
Weighted average shares outstanding:
              
 Basic
    
27,543
    
29,996
  
 Diluted
    
28,953
    
31,263
  
               
Operating Data:
              
Stores Open at the Beginning of the Period
    
786
    
698
  
New Stores
    
25
    
25
  
Closed Stores
    
-
    
(3
)
Stores Open at the End of the Period
    
811
    
720
  
               
Gross Store Square Footage
    
1,570,000
    
1,364,000
  
Merchandise Inventories per Square Foot
  
$
61
  
$
62
  
               
Supplemental Financial Information
              
Depreciation and amortization
  
$
8,405
  
$
7,194
  
Interest income, net
  
$
237
  
$
1,094
  
Stock-based compensation
  
$
4,510
  
$
2,678
  
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
   
May 3,
  
February 2,
  
May 5,
  
   
2008
  
2008
  
2007
  
Current Assets
              
 Cash and cash equivalents
  
$
58,052
  
$
33,313
  
$
27,797
  
 Marketable securities
    
-
    
-
    
66,475
  
 Accounts receivable
    
22,840
    
12,640
    
21,997
  
 Merchandise inventories
    
95,557
    
119,523
    
84,975
  
 Prepaid expenses and deferred taxes
    
24,321
    
23,748
    
19,569
  
 Total current assets
    
200,770
    
189,224
    
220,813
  
                     
Property and Equipment, net
    
191,669
    
185,357
    
165,465
  
Lease Rights, Deferred Taxes and Other Assets
    
22,189
    
22,603
    
14,733
  
                     
 Total Assets
  
$
414,628
  
$
397,184
  
$
401,011
  
                     
Current Liabilities
                    
 Accounts payable
  
$
30,286
  
$
52,915
  
$
29,360
  
 Accrued liabilities
    
66,587
    
70,282
    
79,908
  
 Income tax payable
    
8,273
    
7,989
    
7,803
  
 Total current liabilities
    
105,146
    
131,186
    
117,071
  
                     
Long Term Liabilities
                    
 Deferred rent and other liabilities
    
66,615
    
57,703
    
60,120
  
                     
Stockholders' Equity
    
242,867
    
208,295
    
223,820
  
                     
 Total Liabilities and Stockholders' Equity
  
$
414,628
  
$
397,184
  
$
401,011