EX-99.1 2 v150432_ex99-1.htm
EXHIBIT 99.1
 
 
 
Investor Relations contact:
 
Jeffrey P. Harris
Tel: 415-278-7933
investor_relations@gymboree.com
   
   
 
Media Relations contact:
Mark Mizicko
Tel : 415-278-7503
media_relations@gymboree.com
 
The Gymboree Corporation Reports First Quarter 2009 Results
 
San Francisco, Calif., May 20, 2009 – The Gymboree Corporation (NASDAQ: GYMB) today reported earnings of $21.8 million or $0.74 per diluted share for the first fiscal quarter ended May 2, 2009.  This compares to earnings of $25.0 million or $0.86 per diluted share for the same period of the prior year.
 
“Our proactive efforts to reduce our product costs and operating expenses paid big dividends this quarter,” said Matthew McCauley, Chairman and Chief Executive Officer.  “Despite the challenging retail environment, we were able to minimize the downward pressure on gross margins while leveraging SG&A by 200 basis points on negative comparable store sales.  Looking ahead, we do not anticipate the macro-environment to improve significantly in the near term, and will continue to focus on our ongoing strategies of acquiring new customers, expanding our store base and controlling expenses.”

Net sales from retail operations for the fiscal quarter ended May 2, 2009, totaled $228.0 million, a 5% decrease from the $238.9 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 decreased 10% versus the same period last year.  Total net sales for the first fiscal quarter were $230.9 million, a decrease of 5% compared to total net sales of $242.1 million for the first fiscal quarter last year.
 
Business Outlook
 
For the second fiscal quarter of 2009, the Company expects a mid to high-single digit decrease in comparable store sales versus the same period of the prior year.  The Company expects earnings for the second fiscal quarter in the range of $0.09 to $0.14 per diluted share.
 
 
 
 
Management Presentation
 
The live broadcast of the discussion of first quarter 2009 earnings results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET) on Wednesday, May 20, 2009.  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 27, 2009, at 800-642-1687, passcode 85033749, 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 2, 2009, the Company operated a total of 901 retail stores: 619 Gymboree® stores (587 in the United States, 30 in Canada and 2 in Puerto Rico), 126 Gymboree Outlet stores, 118 Janie and Jack® shops and 38 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 606 franchised and Company-operated Gymboree Play & Music® centers in the United States and 29 other countries.
 
Forward-Looking Statements
The foregoing financial information for the first fiscal quarter ended May 2, 2009, is unaudited and subject to quarter-end and year-end adjustment.  The foregoing paragraphs contain forward-looking statements relating to The Gymboree Corporation’s 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 vary materially as a result of a number of factors, including increasing levels of unemployment and consumer debt, extreme volatility in the financial markets, current recessionary economic conditions, 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, 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 January 31, 2009. These forward-looking statements reflect The Gymboree Corporation’s expectations as of May 20, 2009.  The Gymboree Corporation undertakes no obligation to update the information provided herein.
 
 
Gymboree, Janie and Jack, Crazy 8 and Gymboree Play & Music are registered trademarks of The Gymboree Corporation.
 
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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 2,
    
May 3,
  
   
2009
    
2008
  
             
Net sales:
            
Retail
   $ 227,980     $ 238,917  
Play & Music
     2,895       3,187  
Total net sales
     230,875       242,104  
Cost of goods sold, including
                
buying and occupancy expenses
     (121,346 )     (118,686 )
Gross profit
     109,529       123,418  
Selling, general and administrative expenses
     (73,345 )     (81,825 )
Operating income
     36,184       41,593  
Other income
     307       280  
Income before income taxes
     36,491       41,873  
Income tax expense
     (14,684 )     (16,836 )
Net income
   $ 21,807     $ 25,037  
                 
Net income per share:
                
Basic
   $ 0.77     $ 0.91  
Diluted
   $ 0.74     $ 0.86  
                 
Weighted average shares outstanding:
                
Basic
     28,447       27,543  
Diluted
     29,455       28,953  
                 
Operating Data:
                
Stores Open at the Beginning of the Period
     886       786  
New Stores
     15       25  
Stores Open at the End of the Period
     901       811  
                 
Gross Store Square Footage
     1,763,000       1,570,000  
Merchandise Inventories per Square Foot
   $ 57     $ 61  
                 
Supplemental Financial Information:
                
Depreciation and amortization
   $ 8,983     $ 8,405  
Interest income, net
   $ 247     $ 237  
Stock-based compensation
   $ 3,874     $ 4,510  
 
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
   
May 2,
    
January 31,
    
May 3,
  
   
2009
    
2009
    
2008
  
                   
Current Assets
                  
  Cash and cash equivalents   $ 150,190     $ 140,472     $ 58,052  
  Accounts receivable     24,624       18,735       22,840  
  Merchandise inventories     100,242       114,972       95,557  
  Prepaid expenses and deferred taxes     26,868       19,704       24,321  
     Total current assets     301,924       293,883       200,770  
                         
Property and Equipment, net
     204,628       204,227       191,669  
Deferred Taxes and Other Assets
     21,695       22,471       22,189  
                         
                         
  Total Assets   $ 528,247     $ 520,581     $ 414,628  
                         
Current Liabilities
                        
  Accounts payable   $ 28,252     $ 44,400     $ 30,286  
  Accrued liabilities     56,632       69,341       66,587  
  Income tax payable     8,063       102       8,273  
     Total current liabilities     92,947       113,843       105,146  
                         
Long-Term Liabilities
                        
  Deferred liabilities     75,683       72,463       66,615  
                         
Stockholders' Equity
     359,617       334,275       242,867  
                         
  Total Liabilities and Stockholders' Equity   $ 528,247     $ 520,581     $ 414,628