EX-99 2 restatedearningsrelease4th04.txt EARNINGS RELEASE 4TH QUARTER FISCAL 2004 FOR FURTHER INFORMATION CONTACT: ELAINE D. CROWLEY SR. VICE PRESIDENT, CHIEF FINANCIAL OFFICER (817) 347-8200 BOMBAY REVISES FOURTH QUARTER AND FISCAL 2004 OPERATING RESULTS FOURTH QUARTER AND ANNUAL RESULTS IMPROVED OPERATING CASH FLOWS RESTATED; NO IMPACT ON TOTAL CASH FLOWS FOR IMMEDIATE RELEASE - APRIL 29, 2005 FORT WORTH, TEXAS - The Bombay Company, Inc. (NYSE-BBA) announced that earnings for the fourth quarter ended January 29, 2005 were $7.2 million or $0.20 per diluted share compared to earnings of $12.1 million or $0.33 per diluted share for the corresponding period of the prior fiscal year. For the fiscal year ended January 29, 2005, the Company reported a loss of $12.2 million or $0.34 per share compared to earnings of $9.9 million or $0.28 per share for the fiscal year ended January 31, 2004. These and all other amounts in the press release have been presented on a basis consistent with the restatement described below. Earnings for the quarter are $66,000 higher than announced on March 22, 2005 and the loss for the year is $621,000 lower than previously announced as a result of recording the adjustment relating to pre-opening lease cost described below. Net revenue, selling, general and administrative expenses and interest were not affected by the change. The Company also revisited the treatment of landlord construction allowances. The effect is an increase to cash flow from operations and a corresponding decrease in cash flows from investing activities for the same period. Commentary on the quarter included in the prior release continues to be applicable. LEASE ACCOUNTING CHANGE AND CASH FLOW RESTATEMENT The Company previously announced in its press release dated March 22, 2005, that like many other companies in the retail industry, it had reviewed its lease accounting practices and indicated that it planned to restate its previously filed financial statements when it files its Annual Report on Form 10-K for the fiscal year ended January 29, 2005. Subsequently, additional clarification was provided by the staff of the Securities and Exchange Commission (the "SEC") relative to the acceptability of capitalizing construction period rent, and in a March 29, 2005 press release, the Company announced that it was withdrawing its restated financial results while it reassessed the manner in which it planned to revise its lease accounting practices. Historically, the Company has recognized store lease expense on a straight- line basis beginning on the date the store opened. This generally had the effect of excluding the pre-opening store build out, fixturing and merchandise stocking periods during which the Company typically had no rent payments. The previously announced results indicated that the Company planned to include the rent-free, build out, fixturing and merchandise stocking period in the period over which straight-line rent should be expensed. After further evaluation, the Company has adopted an accounting policy to capitalize rent during the construction period and recognize straight line rent expense upon the store becoming substantially complete and ready for its intended use, which results in our recording rent expense during the merchandise stocking period. The impact of the adoption of the new accounting policy was not material to the operating results for any previously reported fiscal year or interim period; however, the Company has elected to restate prior year financial statements in order to provide transparency as to the effect of the change on the prior period results and to enhance the comparability of the prior financial information. As a result of this change, the Company is decreasing its previously reported Fiscal 2003 net income by $85,000 and increasing its Fiscal 2002 net income by $11,000, neither of which change diluted earnings per share for those periods. The impact on the Company's January 31, 2004 consolidated balance sheet is an increase in net property and equipment of approximately $4.6 million, an increase in total assets of approximately $4.8 million, an increase in total liabilities of approximately $5.2 million, and a decrease in stockholders' equity of approximately $0.4 million. The change has no effect on historical or future cash flows or the timing of payments under the Company's leases. Additionally, in prior periods, the Company reflected proceeds from landlord construction allowances as a separate component of cash flows from investing activities in the consolidated statements of cash flows. The Company reviewed its accounting and reporting with respect to landlord allowances and has restated its historical Fiscal 2003 and Fiscal 2002 consolidated statement of cash flows to record such proceeds as a component of cash flows from operating activities. The impact of the restatement is as follows (in thousands):
Fiscal 2003 As Reported Adjustment As Restated Net cash provided by (used in) operations $ (8,682) $ 11,900 $ 3,218 Net cash (used in) investing activities $ (28,990) $ (11,900) $ (40,890) Fiscal 2002 As Reported Adjustment As Restated Net cash provided by operations $ 25,626 $ 3,525 $ 29,151 Net cash (used in) investing activities $ (9,935) $ (3,525) $ (13,460)
The adjustment has no impact on total cash flows for each period, liquidity of the Company or its outlook for Fiscal 2005. The Bombay Company, Inc. designs, sources and markets a unique line of home accessories, wall d{e'}cor and furniture through retail outlets, specialty catalogs and the internet in the U.S. and internationally. Any statements in this press release that may be considered forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Those risks are described in the Company's public announcements, reports to stockholders and SEC filings, including but not limited to Reports on Forms 10-K, 8-K and 10-Q, copies of which are available from the SEC or may be obtained upon request from the Company. The Company undertakes no obligation to revise the forward-looking statements contained therein to reflect events or circumstances after the date thereof as a result of new information, future events or otherwise. * * *
THE BOMBAY COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except store counts and per share amounts) (unaudited) THREE MONTHS ENDED TWELVE MONTHS ENDED JANUARY 29, JANUARY 31, JANUARY 29, JANUARY 31, 2005 2004 2005 2004 (restated) (restated) Net revenue $203,358 $211,564 $576,087 $596,435 Costs and expenses: Cost of sales, buying and store occupancy costs 144,937 144,406 428,561 421,459 Selling, general & administrative expenses 46,984 47,102 165,658 158,446 Operating income (loss) 11,437 20,056 (18,132) 16,530 Interest income 22 31 67 176 Interest expense (273) (238) (601) (621) Income (loss) before income taxes 11,186 19,849 (18,666) 16,085 Provision (benefit) for income taxes 3,988 7,704 (6,461) 6,219 Net income (loss) $7,198 $12,145 $(12,205) $9,866 Net income (loss) per basic share $0.20 $0.34 $(0.34) $0.28 Net income (loss) per diluted share $0.20 $0.33 $(0.34) $0.28 Avg. common shares outstanding 35,857 35,292 35,697 34,649 Avg. common shares outstanding and dilutive common shares 36,505 36,562 35,697 34,966 OTHER SELECTED FINANCIAL AND OPERATING DATA Capital expenditures, net $10,394 $5,535 $36,850 $40,890 Depreciation and amortization $5,777 $4,861 $18,814 $18,253 Stores opened 19 39 66 84 Stores converted - - - 4 Stores closed 10 17 35 35 Store composition: Large format 384 365 Regular stores 20 25 Outlet 47 46 KIDS 51 35 Total 502 471 Square footage (in thousands) 2,020 1,847
THE BOMBAY COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) JANUARY 29, JANUARY 31, 2005 2004 (restated) ASSETS Current assets: Cash and short-term investments $9,168 $25,619 Inventories 144,702 138,908 Other current assets 27,022 26,012 Total current assets 180,892 190,539 Property and equipment, net 92,012 72,688 Goodwill, net 423 423 Deferred taxes 5,052 593 Other assets 5,794 5,492 TOTAL ASSETS $284,173 $269,735 LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $48,997 $35,348 Income taxes payable - 1,103 Accrued insurance 4,081 3,730 Accrued payroll and bonuses 5,660 8,019 Gift certificates redeemable 8,312 7,129 Total current liabilities 67,050 55,329 Accrued rent and other non-current liabilities 35,192 23,389 Stockholders' equity: Preferred stock - - Common stock 38,150 38,150 Additional paid-in capital 79,700 79,210 Retained earnings 73,737 85,942 Accumulated other comprehensive income 944 122 Treasury stock (9,268) (11,555) Deferred compensation (1,332) (852) Total stockholders' equity 181,931 191,017 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $284,173 $269,735