GYMB Gymboree Corp (MM)

SAN FRANCISCO, Aug. 19 /PRNewswire-FirstCall/ -- The Gymboree Corporation (NASDAQ:GYMB) today reported earnings of $12.2 million or $0.41 per diluted share for the second fiscal quarter ended August 1, 2009. This compares to earnings of $8.0 million or $0.27 per diluted share for the same period of the prior year. Current year results reflect a benefit of $0.05 per diluted share due to a lower than anticipated tax rate for the quarter. Net sales from retail operations for the fiscal quarter ended August 1, 2009, totaled $212.3 million, a 5% increase from the $202.8 million in net sales from retail operations for the second fiscal quarter of the prior year. As previously reported, comparable store sales from retail operations for the second fiscal quarter decreased 1% versus the same period last year. Total net sales for the second fiscal quarter were $215.4 million, an increase of 5% compared to total net sales of $205.7 million for the second fiscal quarter last year. Business Outlook For the third fiscal quarter of 2009, the Company expects a low-single digit decrease in comparable store sales versus the same period of the prior year. The Company expects earnings for the third fiscal quarter in the range of $0.95 to $1.03 per diluted share. Management Presentation The live broadcast of the discussion of second quarter 2009 earnings results will be available to interested parties at 1:30 p.m. PT (4:30 p.m. ET) on Wednesday, August 19, 2009. To listen to the live broadcast over the Internet, please log on to http://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, August 26, 2009, at 800-642-1687, passcode 85034602, 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 August 1, 2009, the Company operated a total of 926 retail stores: 624 Gymboree stores (591 in the United States, 31 in Canada and 2 in Puerto Rico), 135 Gymboree Outlet stores, 120 Janie and Jack shops and 47 Crazy 8 stores in the United States. The Company also operates online stores at http://www.gymboree.com/, http://www.janieandjack.com/ and http://www.crazy8.com/, and offers directed parent-child developmental play programs at 616 franchised and Company-operated Gymboree Play & Music centers in the United States and 30 other countries. Forward-Looking Statements The foregoing financial information for the second fiscal quarter ended August 1, 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 August 19, 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. EXHIBIT A THE GYMBOREE CORPORATION ------------------------ CONDENSED CONSOLIDATED STATEMENTS OF INCOME ------------------------------------------- (In thousands, except per share and operating data) (Unaudited) 13 Weeks 13 Weeks 26 Weeks 26 Weeks Ended Ended Ended Ended August 1, August 2, August 1, August 2, 2009 2008 2009 2008 ---- ---- ---- ---- Net sales: Retail $212,262 $202,818 $440,241 $441,735 Play & Music 3,132 2,930 6,028 6,118 ----- ----- ----- ----- Total net sales 215,394 205,748 446,269 447,853 Cost of goods sold, including buying and occupancy expenses (122,166) (111,806) (243,512) (230,493) -------- -------- -------- -------- Gross profit 93,228 93,942 202,757 217,360 Selling, general and administrative expenses (75,809) (81,067) (149,154) (162,892) ------- ------- -------- -------- Operating income 17,419 12,875 53,603 54,468 Other income 201 417 509 698 --- --- --- --- Income before income taxes 17,620 13,292 54,112 55,166 Income tax expense (5,459) (5,281) (20,143) (22,117) ------ ------ ------- ------- Net income $12,161 $8,011 $33,969 $33,049 ======= ====== ======= ======= Net income per share: Basic $0.42 $0.29 $1.19 $1.19 Diluted $0.41 $0.27 $1.15 $1.14 Weighted average shares outstanding: Basic 28,654 27,988 28,551 27,765 Diluted 29,854 29,166 29,655 29,060 Operating Data: Stores Open at the Beginning of the Period 901 811 886 786 New Stores 25 26 40 51 Closed Stores - (2) - (2) -- -- -- -- Stores Open at the End of the Period 926 835 926 835 === === === === Gross Store Square Footage 1,818,000 1,623,000 1,818,000 1,623,000 Merchandise Inventories per Square Foot $71 $80 $71 $80 Supplemental Financial Information: Depreciation and amortization $9,195 $8,616 $18,177 $17,021 Interest income, net $174 $349 $421 $586 Stock-based compensation $4,478 $4,913 $8,351 $9,424 CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (In thousands) (Unaudited) August 1, January 31, August 2, 2009 2009 2008 ---- ---- ---- Current Assets Cash and cash equivalents $164,745 $140,472 $43,775 Accounts receivable 16,553 18,735 16,680 Merchandise inventories 129,293 114,972 129,099 Prepaid income taxes 12,487 - 22,495 Prepaid expenses and deferred taxes 28,517 19,704 25,244 ------ ------ ------ Total current assets 351,595 293,883 237,293 ------- ------- ------- Property and Equipment, net 209,961 204,227 200,730 Deferred Taxes and Other Assets 20,818 22,471 19,578 Total Assets $582,374 $520,581 $457,601 ======== ======== ======== Current Liabilities Accounts payable $55,650 $44,400 $53,876 Accrued liabilities 70,528 69,443 73,882 ------ ------ ------ Total current liabilities 126,178 113,843 127,758 ------- ------- ------- Long Term Liabilities Deferred liabilities 76,504 72,463 65,491 Stockholders' Equity 379,692 334,275 264,352 ------- ------- ------- Total Liabilities and Stockholders' Equity $582,374 $520,581 $457,601 ======== ======== ======== DATASOURCE: The Gymboree Corporation CONTACT: Investor Relations, Jeffrey P. Harris, +1-415-278-7933, , or Media Relations, Mark Mizicko, +1-415-278-7503, , both of Gymboree Corporation Web Site: http://www.gymboree.com/ http://www.janieandjack.com/ http://www.crazy8.com/

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