THE GYMBOREE CORPORATION 
By SAN FRANCISCO, Nov. 15, 2010 /PRNewswire-FirstCall/ -- The Gymboree Corporation (Nasdaq: GYMB) today reported earnings of $34.4 million or $1.26 per diluted share for the third fiscal quarter ended October 30, 2010. This compares to earnings of $34.8 million or $1.15 per diluted share for the same period of the prior year. Excluding $3.5 million of transaction-related expenses, earnings per diluted share for the third fiscal quarter was $1.33.
Net sales from retail operations for the fiscal quarter ended October 30, 2010, totaled $276.6 million, a 4% increase from $265.6 million in net sales from retail operations for the third fiscal quarter of the prior year. As previously reported, comparable store sales from retail operations for the third fiscal quarter decreased 4% versus the same period last year. Total net sales for the third fiscal quarter were $280.9 million, an increase of 4% compared to total net sales of $269.1 million for the third fiscal quarter last year. Excluding the impact of transaction-related expenses, operating margins increased to 21.4% of sales versus 21.0% in the third quarter of the prior year.
"We are pleased to continue to report higher operating margins after excluding the impact of transaction-related expenses," said Matthew McCauley, Chairman and Chief Executive Officer. "Our strategy of leveraging existing infrastructure across a multi-brand portfolio, coupled with the strong performance of Crazy 8, has served as the catalyst for our continued margin improvement. Looking ahead, we plan to build on our success with the Crazy 8 brand and expect to roll out an additional 80 stores in 2011."
Management Presentation
The broadcast of the discussion of third quarter 2010 earnings results will be available to interested parties at 5:00 a.m. PT (8:00 a.m. ET) on Monday, November 15, 2010. To listen to the broadcast over the Internet, please log on to www.gymboree.com, go to "About Us" at the bottom of the page, go to "Investors & Media" and then "Conference Calls & Webcasts." The call will be available through midnight ET, Monday, November 22, 2010, at 800-642-1687, passcode 54962970, 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 October 30, 2010, the Company operated a total of 1,049 retail stores: 636 Gymboree® stores (595 in the United States, 37 in Canada, 2 in Australia and 2 in Puerto Rico), 148 Gymboree Outlet stores, 122 Janie and Jack® shops and 143 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 672 franchised and Company-operated Gymboree Play & Music® centers in the United States and 33 other countries.
Forward-Looking Statements
The foregoing financial information for the third fiscal quarter ended October 30, 2010, 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 high levels of unemployment and consumer debt, volatility in the financial markets, general 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 30, 2010. These forward-looking statements reflect The Gymboree Corporation's expectations as of November 15, 2010. 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 Ended 13 Weeks Ended
October 30, October 31,
2010 2009
---- ----
Net sales:
Retail $276,585 $265,596
Play & Music 4,265 3,485
----- -----
Total net sales 280,850 269,081
Cost of goods sold, including
buying and occupancy expenses (142,046) (131,973)
-------- --------
Gross profit 138,804 137,108
Selling, general and
administrative expenses (82,102) (80,689)
------- -------
Operating income 56,702 56,419
Other income 47 159
--- ---
Income before income taxes 56,749 56,578
Income tax expense (22,353) (21,823)
------- -------
Net income $34,396 $34,755
======= =======
Net income per share:
Basic $1.30 $1.20
Diluted $1.26 $1.15
Weighted average shares
outstanding:
Basic 26,400 28,952
Diluted 27,355 30,093
Operating Data:
Stores Open at the Beginning of
the Period 1,019 926
New Stores 30 25
Closed Stores - -
--- ---
Stores Open at the End of the
Period 1,049 951
===== ===
Gross Store Square Footage 2,097,000 1,866,000
Merchandise Inventories per Square
Foot $82 $77
Supplemental Financial
Information:
Depreciation and amortization $10,169 $9,285
Interest income, net $19 $43
Stock-based compensation $4,013 $4,442
39 Weeks Ended 39 Weeks Ended
October 30, October 31,
2010 2009
---- ----
Net sales:
Retail $746,073 $705,836
Play & Music 10,351 9,513
------ -----
Total net sales 756,424 715,349
Cost of goods sold, including
buying and occupancy expenses (390,549) (375,484)
-------- --------
Gross profit 365,875 339,865
Selling, general and
administrative expenses (241,515) (229,843)
-------- --------
Operating income 124,360 110,022
Other income 179 668
--- ---
Income before income taxes 124,539 110,690
Income tax expense (48,703) (41,966)
------- -------
Net income $75,836 $68,724
======= =======
Net income per share:
Basic $2.77 $2.40
Diluted $2.68 $2.31
Weighted average shares
outstanding:
Basic 27,382 28,684
Diluted 28,291 29,801
Operating Data:
Stores Open at the Beginning of
the Period 953 886
New Stores 99 65
Closed Stores (3) -
--- ---
Stores Open at the End of the
Period 1,049 951
===== ===
Gross Store Square Footage 2,097,000 1,866,000
Merchandise Inventories per Square
Foot $82 $77
Supplemental Financial
Information:
Depreciation and amortization $29,712 $27,463
Interest income, net $65 $464
Stock-based compensation $12,551 $12,793
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In thousands)
(Unaudited)
October
October 30, January 30, 31,
2010 2010 2009
---- ---- ----
Current Assets
Cash and cash equivalents $176,835 $257,672 $212,107
Accounts receivable 18,777 9,911 14,500
Merchandise inventories 171,191 121,133 144,559
Prepaid expenses and deferred
taxes 19,697 19,778 17,431
Total current assets 386,500 408,494 388,597
------- ------- -------
Property and Equipment, net 218,274 205,461 208,627
Deferred Taxes and Other Assets 21,051 22,175 20,130
Total Assets $625,825 $636,130 $617,354
======== ======== ========
Current Liabilities
Accounts payable $55,775 $46,470 $47,409
Accrued liabilities 70,776 69,295 64,975
Income tax payable 624 5,381 3,559
--- -----
Total current liabilities 127,175 121,146 115,943
------- ------- -------
Long Term Liabilities
Lease incentives and other
liabilities 80,630 76,231 75,423
Stockholders' Equity 418,020 438,753 425,988
------- ------- -------
Total Liabilities and
Stockholders' Equity $625,825 $636,130 $617,354
======== ======== ========
SOURCE The Gymboree Corporation
