 | Press Release| Aeropostale Reports Fourth Quarter and Fiscal Year 2002 Results | |
NEW YORK--(BUSINESS WIRE)--March 13, 2003--
Fourth Quarter Earnings Per Share of $0.46 Versus $0.38 Prior Year
Fourth Quarter Revenues Increase 30.6% Versus Prior Year
Aeropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of
active and casual apparel for young women and men, today reported
results for the fourth quarter and fiscal year ended February 1, 2003.
Net income for the fourth quarter was $17.7 million or $0.46 per
diluted share compared to net income of $13.9 million or $0.38 per
diluted share in the year-ago quarter (see Exhibit B). For the
year-ago quarter, net income, excluding a non-cash charge related to
equity based compensation, was $16.3 million or $0.44 per diluted
share.
Net sales for the quarter increased 30.6% to $206.4 million versus
$158.0 million in the comparable period last year. Fourth quarter
comparable store sales increased 0.3%, compared to an increase of
-
23.1% in the year-ago quarter.
The Company reported fourth quarter operating income of $29.3
million, or 14.2% of sales, versus $23.6 million, or 14.9% of sales,
in the year-ago period. Operating income for the full year increased
-
21.2% to $52.1 million, or 9.5% of sales, from $43.0 million, or 10.6%
of sales, recorded in fiscal 2001. Inventory, on a square foot basis,
was down 9.0% compared to the prior year.
Julian R. Geiger, Chairman and Chief Executive Officer said,
"Despite the very challenging retail environment during the fourth
quarter, we were pleased that we were able to generate better than
anticipated earnings while returning inventory to an appropriate
level. This reconfirms the highly flexible and effective nature of our
operating model."
Net income for the 52 weeks ended February 1, 2003 was $31.3
million or $0.82 per diluted share compared to net income of $26.5
million or $0.71 per diluted share in the prior year. Excluding the
pre-tax, non-cash charge related to equity based compensation of
approximately $4.5 million, net income and diluted earnings per share
for the 52 weeks ended February 1, 2003 were $34.0 million or $0.89
per diluted share compared to net income of $27.3 million or $0.73 per
diluted share excluding equity based compensation of $4.0 million and
income of $1.6 million related to a cumulative effect of an accounting
change for negative goodwill (See Exhibit D).
Net sales for the 52 weeks ended February 1, 2003 increased 36.2%
to $550.9 compared to net sales of $404.4 million for the 52 weeks
ended February 2, 2002. Comparable stores sales increased 6.6% for the
full year, compared to an increase of 15.5% in the prior year.
Mr. Geiger continued, "The performance of our new stores in fiscal
2002 have again exceeded our expectations. This year, we will continue
to target opening at least 85 new stores and will continue to build
our presence in existing markets while expanding into five new states;
Colorado, Washington, Oklahoma, North Dakota and South Dakota."
The company today also reiterated its earnings guidance for the
fiscal year ending January 2004. For the full year, the Company
believes it is likely to report net sales in the range of $670 million
to $674 million and earnings in the range of $1.06 to $1.10. It
expects to report earnings per share of between a loss of two cents
and breakeven for both the first and second quarter; earnings per
share in the range of $0.46 to $0.48 in the third quarter; and,
earnings per share in the range of $0.61 to $0.63 in the fourth
quarter.
Mr. Geiger concluded, "Our ability to achieve record sales and
double-digit earnings growth for the year underscores the strength of
our brand, highlights the compelling nature of our concept and is a
testimony to the dedication of our people. While we understand that
the retail environment continues to be challenging, our business model
is sound and we remain confident that we can expand our store base to
900 stores nationwide. We look forward to capitalizing on the many
opportunities we have created and delivering superior returns to our
shareholders."
The Company will be holding a conference call today at 4:30 P.M.
to review its fiscal 2002 results. The broadcast will be available
through the 'Investor Relations' link at www.aeropostale.com and at
www.companyboardroom.com. To listen to the broadcast, your computer
must have Windows Media Player installed. If you do not have Windows
Media Player, go to the latter site prior to the call, where you can
download the software for free.
About Aeropostale, Inc.
Aeropostale, Inc. is a mall-based specialty retailer of casual
apparel and accessories that targets both young women and young men
aged 11 to 20. The company provides customers with a selection of
high-quality, active-oriented, fashion basic merchandise in a
high-energy store environment. The company maintains complete control
over the proprietary brand by designing and sourcing all of its own
merchandise. Aeropostale products can be purchased only in its stores,
which sell Aeropostale merchandise exclusively.
The first Aeropostale store was opened in 1987. The company
operates 367 stores in 35 states.
Safe Harbor
Special Note: Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995: Except for historical information
contained herein, the statements made in this release constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Such forward-looking statements involve certain risks and
uncertainties, including statements regarding the company's strategic
direction, prospects and future results. Certain factors, including
factors outside of our control, may cause actual results to differ
materially from those contained in the forward-looking statements.
These factors include the company's ability to implement its growth
strategy successfully, changes in consumer fashion preferences,
economic and other conditions in the markets in which we operate,
competition, seasonality and the other risks discussed in the
company's prospectus dated May 16, 2002 filed with the Securities and
Exchange Commission, which discussions are incorporated in this
release by reference.
EXHIBIT A
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
February 1, February 2,
2003 2002
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $87,475 $44,958
Merchandise inventory 46,645 37,979
Other current assets 10,669 6,843
------------- ----------
Total current assets 144,789 89,780
FIXTURES, EQUIPMENT AND IMPROVEMENTS -- Net
69,448 48,646
OTHER ASSETS 8,795 8,501
------------- ----------
TOTAL ASSETS $223,032 $146,927
============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 17,954 13,995
Accrued expenses 40,044 37,604
------------- ----------
Total current liabilities 57,998 51,599
OTHER LIABILITIES 37,075 25,521
SERIES B REDEEMABLE PREFERRED STOCK:
$0.01 par value per share; authorized, 0 and
6 issued and outstanding, 6 shares
liquidation preference $6,250; 12.5%
cumulative -- 9,617
COMMITMENT AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock -- par value, $0.01 per share;
200,000 and 75,266 shares authorized,
35,306 and 31,047 shares issued and
outstanding 353 310
Common stock -- Nonvoting, par value, $0.01
per share; 75,266 shares authorized, 0 and
1,118 shares issued and outstanding -- 11
Additional paid-in capital 41,657 9,321
Deferred compensation -- ( 4,473)
Retained earnings 85,949 55,021
------------- ----------
Total stockholders' equity 127,959 60,190
------------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $223,032 $146,927
============= ==========
EXHIBIT B
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED FINANCIAL DATA
(in thousands, except per share and store data)
13 weeks ended 13 weeks ended
February 1, 2003 February 2, 2002
------------------- ------------------
% of
Sales % Sales
NET SALES $206,423 100.0% $158,021 100.0%
COST OF SALES 142,965 69.3 102,969 65.2
------------- -----------
GROSS PROFIT 63,458 30.7 55,052 34.8
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 34,109 16.5 31,477 19.9
------------- -----------
INCOME FROM OPERATIONS 29,349 14.2 23,575 14.9
INTEREST (INCOME) EXPENSE -- Net (113) 0.1 6 --
------------- -----------
INCOME BEFORE INCOME TAXES 29,462 14.3 23,569 14.9
PROVISION FOR INCOME TAXES 11,787 5.7 9,659 6.1
------------- -----------
NET INCOME $17,675 8.6% $13,910 8.8%
============= ===========
Basic net income per share $0.50 $0.43
============= ===========
Diluted net income per share $0.46 $0.38
============= ===========
Basic weighted average number of
shares outstanding 35,222 31,723
Diluted weighted average number
of shares outstanding 38,435 36,233
STORE DATA:
Comparable store sales 0.3% 23.1%
Stores open at end of period 367 278
Total gross square footage at
end of period 1,299,606 962,697
EXHIBIT C
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED FINANCIAL DATA
(in thousands, except per share and store data)
52 weeks ended 52 weeks ended
February 1, 2003 February 2, 2002
------------------ -----------------
% of
Sales % Sales
NET SALES $550,904 100.0% $404,438 100.0%
COST OF SALES 388,301 70.5 274,061 67.8
------------ ----------
GROSS PROFIT 162,603 29.5 130,377 32.2
------------ ----------
Selling, general and
administrative expenses 110,506 20.1 86,619 21.4
Store closing expense -- -- 815 0.2
Amortization of negative goodwill -- -- (117) --
------------ ----------
Total costs and expenses 110,506 20.1 87,317 21.6
------------ ----------
INCOME FROM OPERATIONS 52,097 9.5 43,060 10.6
INTEREST (INCOME) EXPENSE -- Net (56) -- 877 0.2
------------ ----------
INCOME BEFORE INCOME TAXES 52,153 9.5 42,183 10.4
PROVISION FOR INCOME TAXES 20,863 3.8 17,326 4.3
------------ ----------
INCOME FROM CONTINUING OPERATIONS 31,290 5.7 24,857 6.1
Gain on discontinued
operations -- -- 17 --
Cumulative effect of
accounting change -- -- 1,632 0.4
------------ ----------
NET INCOME $31,290 5.7% $26,506 6.6%
============ ==========
BASIC NET INCOME PER COMMON SHARE
From continuing operations $ 0.90 $0.75
From discontinued operations -- --
From cumulative accounting
change -- 0.05
------------ ----------
Net income per share $0.90 $0.80
============ ==========
DILUTED NET INCOME PER COMMON
SHARE:
From continuing operations $0.82 $0.66
From discontinued operations -- --
From cumulative accounting
change -- 0.05
------------ ----------
Net income per share $0.82 $0.71
============ ==========
Basic weighted average number of
shares outstanding 34,387 31,567
Diluted weighted average number
of shares outstanding 37,854 35,879
STORE DATA:
Comparable store sales 6.6% 15.5%
Stores open at end of period 367 278
Total gross square footage at end
of period 1,299,606 962,697
EXHIBIT D: The following proforma condensed consolidated statements of
operations for the 13 weeks and 52 weeks ended February 1, 2003 and
February 2, 2002 excludes the equity based compensation and cumulative
accounting change for the respective periods, if applicable.
PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share date)
13 weeks ended
----------------------------------------
February 1, February 2,
2003 2002
----------------- --------------------
NET INCOME $17,675 $13,910
Equity based compensation -- 3,972
Income tax effect (a) -- (1,589)
----------------- --------------------
PROFORMA NET INCOME $17,675 $16,293
================= ====================
PROFORMA DILUTED EARNINGS
PER SHARE: $0.46 $0.44
================= ====================
52 weeks ended
----------------------------------------
February 1, February 2,
2003 2002
----------------- --------------------
NET INCOME $31,290 $26,507
Equity based compensation 4,473 3,972
Income tax effect (a) (1,789) (1,589)
Cumulative accounting
change -- (1,632)
----------------- --------------------
PROFORMA NET INCOME $33,974 $27,258
================= ====================
PROFORMA DILUTED EARNINGS
PER SHARE: $0.89 $0.73
================= ====================
(a) Assumes a tax rate of 40%
CONTACT:
Aeropostale
Michael J. Cunningham, 973/872-5677
or
Integrated Corporate Relations
(Investor Relations)
James Palczynski/Chad A. Jacobs
203/222-9013
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