-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SSq7LpM2GoFrUGAifs7fdw3SLAh+fAA5cVtOI4ttA5nQNsqdJt6rgJSP0OAw1cWj FAsV1OdKmUBEYPbHDVNLTA== 0001275287-05-000647.txt : 20050222 0001275287-05-000647.hdr.sgml : 20050221 20050222070604 ACCESSION NUMBER: 0001275287-05-000647 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050218 ITEM INFORMATION: Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050222 DATE AS OF CHANGE: 20050222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GYMBOREE CORP CENTRAL INDEX KEY: 0000786110 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 942615258 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21250 FILM NUMBER: 05629216 BUSINESS ADDRESS: STREET 1: 500 HOWARD STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 415-278-7000 MAIL ADDRESS: STREET 1: 500 HOWARD STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 8-K 1 gc2097.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) FEBRUARY 18, 2005 THE GYMBOREE CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 000-21250 942615258 ---------------------------- ---------------- ------------------- (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 500 Howard Street, San Francisco, CA 94105 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (415) 278-7000 ------------------------------------------------------------ (Former name or former address if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW (a) On February 18, 2005, the management of The Gymboree Corporation (the "Company") concluded that the Company's previously issued financial statements for the quarters ending May 1, 2004, July 31, 2004 and October 30, 2004 should be restated. The Company is in the process of determining whether other financial statements will also require restatement. The Company's management reached its conclusion that such prior financial statements should be restated in connection with a review of certain non-cash items relating to its lease accounting practices. The review stemmed from a public letter issued by the SEC to the American Institute of Certified Public Accountants on February 7, 2005, which clarified the interpretation of existing accounting literature applicable to certain leases and leasehold improvements. Similar to other retailers with numerous operating leases, the Company will adjust its method of accounting for rent holidays, landlord allowances and incentives. The Company expects to record non-cash adjustments affecting results from continuing operations and net income to conform to the interpretation provided by the SEC. These adjustments, which will include amounts related to the Company's new corporate headquarters, retail stores and other operating leases, have not been finalized. Based on its preliminary assessment, the Company estimates that it will record an additional non-cash charge in fiscal 2004 of approximately $0.06 to $0.07 per diluted share relating to the Company's new corporate headquarters. This restatement will impact selling, general and administrative expenses and is expected to reduce income from continuing operations and net income for the first, second, third and fourth quarters of fiscal 2004 by approximately $0.01, $0.02, $0.02, $0.01 per diluted share, respectively. The Company is currently calculating the impact related to its retail stores and other operating leases. As a result, the estimated range of earnings per share for the fourth quarter of fiscal 2004 and for fiscal 2004 that were provided in the press release dated February 3, 2005 by the Company should not be relied upon. As a result of the Company's determination to restate its consolidated financial statements as discussed above, the financial statements included in the Company's Quarterly Reports on Form 10-Q for the first three quarters of the fiscal year ended January 29, 2005 should no longer be relied upon. The amount of the adjustment related to accounting for retail store and other operating leases, when determined, is likely to affect periods prior to fiscal 2004. The Company has not determined whether such adjustments will require restatement of prior periods. The Company's management has discussed its conclusion disclosed in this Form 8-K with the Audit Committee of the Board of Directors and Deloitte & Touche LLP, the Company's independent public accountants. 2 ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99.1 Press release of The Gymboree Corporation issued February 22, 2005 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE GYMBOREE CORPORATION Date: February 22, 2005 By: /s/ Blair W. Lambert --------------------------- Blair W. Lambert Chief Operating Officer and Chief Financial Officer 4 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- --------------------------------------------------------------- 99.1 Press release of The Gymboree Corporation issued February 22, 2005 5 EX-99.1 2 gc2097ex991.txt Exhibit 99.1 THE GYMBOREE CORPORATION COMPLETES PRELIMINARY REVIEW OF LEASE ACCOUNTING PRACTICES COMPANY EXPECTS TO RESTATE PRIOR PERIODS FOR NON-CASH ADJUSTMENTS SAN FRANCISCO, Feb. 22 /PRNewswire-FirstCall/ -- The Gymboree Corporation (Nasdaq: GYMB) has made a preliminary determination that its current method of accounting for rent holidays, landlord allowances and incentives under operating leases is not consistent with the views expressed by the Office of the Chief Accountant of the Securities and Exchange Commission in a letter dated February 7, 2005. In that letter, the SEC provided clarification on long-standing, generally accepted accounting principles related to operating leases. The SEC's interpretation has led numerous retailers to announce adjustments and restatements related to operating lease accounting. The Company expects to record non-cash adjustments affecting results from continuing operations and net income to conform to the interpretation provided by the SEC. These adjustments do not impact the timing or amount of lease payments, as they relate solely to accounting treatment. These adjustments, which will include amounts related to the Company's new corporate headquarters, retail stores and other operating leases, have not been finalized. However, the Company has concluded that it will restate quarterly information filed in fiscal 2004 and is likely to restate prior periods. Impact related to retail stores and other operating leases: The Company is currently calculating the impact related to its retail stores and other operating leases. Impact related to corporate headquarters relocation in fiscal 2004: Based on its preliminary assessment, the Company estimates that it will record an additional non-cash charge in fiscal 2004 of approximately $0.06 to $0.07 per diluted share relating to the Company's new corporate headquarters. This restatement will impact selling, general and administrative expenses and is expected to reduce income from continuing operations and net income for the first, second, third and fourth quarters of fiscal 2004 by approximately $0.01, $0.02, $0.02, $0.01 per diluted share, respectively. Management Presentations Due to a scheduling conflict, the Company has changed the date of its fourth quarter 2004 earnings press release and conference call to Wednesday, March 9, 2005 at 1:30 p.m. Pacific Time. About The Gymboree Corporation The Gymboree Corporation's specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of January 29, 2005, the Company operated a total of 648 stores: 579 Gymboree(R) retail stores (551 in the United States and 28 in Canada), 55 Janie and Jack(R) retail shops and 14 Janeville(TM) stores in the United States. The Company also operates online stores at www.gymboree.com and www.janieandjack.com, and offers directed parent-child developmental play programs at 528 franchised and company-operated centers in the United States and 26 countries. Forward-Looking Statements The foregoing paragraphs contain forward-looking statements relating to The Gymboree Corporation's 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 further examination of the Company's accounting for operating leases, customer reactions to new merchandise, service levels and new concepts, success in meeting our delivery targets, the level of our promotional activity, unanticipated costs actually incurred in connection with the management restructuring and severance, the wind down of our UK and Ireland operations, our gross margin achievement, our ability to appropriately manage inventory, general economic conditions, 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, 2004. These forward-looking statements reflect The Gymboree Corporation's expectations as of February 22, 2005. The Gymboree Corporation undertakes no obligation to update the information provided herein. NOTE: Gymboree and Janie and Jack are registered trademarks of The Gymboree Corporation. Janeville is a trademark of The Gymboree Corporation. SOURCE Gymboree Corporation -0- 02/22/2005 /CONTACT: investors, Charles Bracher, +1-415-278-7137, or investor_relations@gymboree.com, or media, Jaclyn Schatzow, +1-415-278-7472, or media_relations@gymboree.com, both of Gymboree Corporation/ /Web site: http://www.gymboree.com / -----END PRIVACY-ENHANCED MESSAGE-----