NEW YORK, May 30, 2007 (BUSINESS WIRE) -- dELiA*s, Inc. (Nasdaq: DLIA), a direct marketing and retail
company comprised of three lifestyle brands primarily targeting
consumers between the ages of 12 and 19, today announced financial
results for the first quarter ended May 5, 2007.
For the three months ended May 5, 2007:
-- Total revenue increased by 11% to $57.8 million from $51.9
million last year.
-- Same-store sales for the retail segment increased by 9% for
the comparable thirteen-week periods, with total retail sales
increasing by 34%. Net sales of the direct segment increased
by 3% over the first quarter of fiscal 2006. The direct
segment sales increased by 11% on a comparable calendar basis
(after reflecting the impact of last year's 53-week fiscal
calendar on the timing of catalog mailings).
-- Total gross margin decreased by 220 bps to 36.1% of sales, or
$20.9 million, due to the decrease in the retail segment and
its growing percentage of the total sales mix. Gross margin
for the direct segment increased by 50 bps from year-ago
levels.
-- SG&A expense was 42.1% versus 40.9% a year ago, an increase of
120 bps due to the additional costs associated with the move
of our corporate headquarters and other one-time expenses,
which more than offset the improved leveraging of other
expenses due to the increase in revenue.
-- Net loss for the quarter increased to $3.3 million or $0.11
per share compared to last year's $1.2 million or $0.05 loss
per share.
Robert Bernard, Chief Executive Officer, stated: "We are pleased
to have delivered a 9% comp increase in retail sales and an 11%
increase in direct sales on a comparable calendar basis, with results
consistent with our expectations, despite the challenging retail
environment. Looking ahead, we continue to make progress on our goals.
We are on track to grow our store base by approximately 25% this year,
and on May 1, we achieved a significant milestone: We now have over
half of our store base in the new prototype format. This is an
important step toward improving the long-term productivity and
profitability of our dELiA*s retail division."
Retail Segment Results
Net sales for the dELiA*s retail stores increased by 34% to $19.7
million for the quarter compared to last year's $14.7 million. During
the quarter, we opened six new stores, relocated one store and closed
four stores. In addition, we closed our Natick, MA location in April
to remodel and reopen for Back-to-School. Accordingly, we ended the
quarter with 75 stores in operation as compared to the 61 premiere
locations open as of April 29, 2006, the ending date of last year's
fiscal quarter. Gross profit for the retail segment, which includes
distribution, occupancy and merchandising costs, was $3.9 million
versus last year's $3.6 million, an increase of 10% in dollars, and a
decrease, expressed as a percentage of revenues, from 24.1% of sales
in fiscal 2006 to 19.9% of sales this year. This decrease reflected
additional promotional markdowns required to clear excess carryover
merchandise in the retail segment. Selling, general and administrative
expenses, which includes allocated overhead, improved to 43.6% of
sales from 45.0% last year, resulting in a quarterly loss for the
segment of $4.7 million versus $3.1 million last year.
Direct Segment Results
Net sales for the direct segment increased 3% to $38.1 million
versus last year's $37.1 million for the quarter. Net sales for the
direct segment would have increased by 11% based upon comparing the
thirteen-week period ended May 5, 2007 to the comparable thirteen
weeks ended May 6, 2006. Gross profit was $16.9 million versus last
year's $16.3 million, an increase of 4%. This improvement reflected
higher merchandise margins, despite the calendar shift. Selling,
general and administrative expenses were up 8% in dollars and by over
200 bps to 41.3% of sales, with approximately half of this increase
attributable to the costs of the test CCS Girls catalog. Income for
the direct segment thus decreased to $1.2 million from $1.7 million.
Conference Call Information
A conference call to discuss fiscal 2007 first quarter results is
scheduled for Wednesday May 30, at 4:30 pm Eastern Daylight Savings
Time. The conference call will be web-cast live at www.deliasinc.com.
A replay of this call will be available on our website for one year,
and can also be accessed until June 27, 2007 by dialing (888)
286-8010, pass code 68097280.
During the conference call, the Company may discuss and answer
questions concerning business and financial developments and trends.
The Company's responses to questions, as well as other matters
discussed during the conference call, may contain or constitute
information that has not been disclosed previously.
About dELiA*s, Inc.
dELiA*s, Inc. is a direct marketing and retail company comprised
of three lifestyle brands primarily targeting consumers between the
ages of 12 and 19. Its brands - dELiA*s, Alloy and CCS - generate
revenue by selling apparel, accessories, footwear, room furnishings
and action sports equipment predominantly to teenage consumers through
direct mail catalogs, websites, and, for dELiA*s, mall-based specialty
retail stores.
Safe Harbor Language
This announcement may contain 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, including statements
regarding our expectations and beliefs regarding our future results or
performance. Because these statements apply to future events, they are
subject to risks and uncertainties. When used in this announcement,
the words "anticipate," "believe," "estimate," "expect,"
"expectation," "project," "intend" and similar expressions are
intended to identify such forward-looking statements. Our actual
results could differ materially from those projected in the
forward-looking statements. Additionally, you should not consider past
results to be an indication of our future performance. For a
discussion of risk factors that may affect our results, see the "Risk
Factors That May Affect Future Results" section of our filings with
the Securities and Exchange Commission, including our annual report on
Form 10-K and quarterly reports on Form 10-Q. We do not intend to
update any of the forward-looking statements after the date of this
announcement to conform these statements to actual results, to changes
in management's expectations or otherwise, except as may be required
by law.
dELiA*s, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
For the Thirteen Weeks
Ended
-------------------------------
May 5, 2007 April 29,
2006
------------ -------------
(unaudited)
Net revenues $ 57,807 100.0% $ 51,870 100.0%
Cost of goods sold 36,947 63.9% 32,017 61.7%
------------ ------------
Gross profit 20,860 36.1% 19,853 38.3%
Selling, general and
administrative expenses 24,314 42.1% 21,201 40.9%
------------ ------------
Loss before interest income
(expense)
and income taxes (3,454) -6.0% (1,348) -2.6%
Interest income (expense), net 209 0.4% 48 0.1%
------------ ------------
Loss before income taxes (3,245) -5.6% (1,300) -2.5%
Provision (benefit) for income
taxes 20 0.0% (80) -0.2%
------------ ------------
Net loss $ (3,265) -5.6% $ (1,220) -2.4%
============ ============
Basic and diluted net loss per
share of common stock:
Basic and diluted net loss
attributable to common
stockholders per share $ (0.11) $ (0.05)
============ ============
WEIGHTED AVERAGE BASIC AND
DILUTED COMMON SHARES
OUTSTANDING 30,778,033 25,636,187
============ ============
Certain reclassifications have been made to prior year amounts to
conform to the current year's presentation.
dELiA*s, Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands)
May 5, 2007 February 3, 2007 April 29, 2006
------------- ---------------- ----------------
ASSETS (unaudited) (unaudited)
Current Assets:
Cash and cash
equivalents $ 19,227 $ 28,874 $ 30,126
Inventories, net 28,365 31,680 23,727
Prepaid catalog costs 3,234 3,157 3,188
Other current assets 8,443 6,759 4,185
------------- ---------------- ----------------
Total current assets 59,269 70,470 61,226
Property and
equipment, net 46,508 39,543 27,821
Goodwill 40,204 40,204 40,204
Intangible assets, net 2,587 2,610 2,713
Other noncurrent
assets 598 678 875
------------- ---------------- ----------------
Total assets $149,166 $153,505 $ 132,839
============= ================ ================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 13,795 $ 17,821 $ 14,547
Current portion of
mortgage note payable 149 139 136
Accrued expenses and
other current
liabilities 29,300 27,549 23,149
------------- ---------------- ----------------
Total current
liabilities 43,244 45,509 37,832
Deferred credits and
other long term
liabilities 8,488 7,723 4,454
Long-term portion of
mortgage note payable 2,372 2,406 2,518
------------- ---------------- ----------------
Total liabilities 54,104 55,638 44,804
------------- ---------------- ----------------
Commitments and
contingencies
Stockholders' Equity:
Preferred stock; $.001
par value, 25,000,000
shares authorized,
none issued -- -- --
Common stock; $.001 par
value; 100,000,000
shares authorized;
30,829,463,
30,745,497, and
26,344,920 shares
issued and
outstanding,
respectively 31 30 26
Additional paid-in
capital 95,747 94,975 92,121
Deferred compensation (197) -- --
(Accumulated deficit)
retained earnings (519) 2,862 (4,112)
------------- ---------------- ----------------
Total stockholders'
equity 95,062 97,867 88,035
------------- ---------------- ----------------
Total liabilities and
stockholders' equity $149,166 $153,505 $ 132,839
============= ================ ================
Working Capital $ 16,025 $ 24,961 $ 23,394
============= ================ ================
dELiA*s, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
For the Thirteen Weeks
Ended
-----------------------
May 5, April 29,
2007 2006
----------- -----------
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(3,265) $(1,220)
Adjustments to reconcile net loss to net cash
(used in) provided by
operating activities:
Depreciation and amortization 1,707 1,254
Stock-based compensation 199 295
Changes in operating assets and liabilities:
Inventories 3,315 2,105
Prepaid catalog costs and other current
assets (1,762) (617)
Other noncurrent assets 80 102
Accounts payable, accrued expenses and other
current liabilities (1,626) 949
----------- -----------
Net cash (used in) provide by operating
activities (1,352) 2,868
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (8,649) (4,139)
----------- -----------
Net cash used in investing activities (8,649) (4,139)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Due from Alloy Inc. - 8,155
Payment of mortgage note payable (24) (26)
Proceeds from rights offering, net of expenses - 19,793
Proceeds from exercise of employee stock
options 378 952
----------- -----------
Net cash provided by financing activities 354 28,874
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (9,647) 27,603
CASH AND CASH EQUIVALENTS, beginning of period 28,874 2,523
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $19,227 $30,126
=========== ===========
Cash paid during the period for interest $ 49 $ 46
Cash paid during the period for taxes $ 323 $ -
Noncash transfers from Alloy, Inc. $ - $ 686
dELiA*s, Inc.
Selected Operating Data
(In thousands, except number of stores)
For the Thirteen Weeks Ended
-----------------------------
May 5, 2007 April 29, 2006
------------ ----------------
(unaudited) (unaudited)
Channel Net Sales:
Retail $19,678 $14,739
Direct:
Catalog 9,492 10,964
Internet 28,637 26,167
------------ ----------------
$57,807 $51,870
============ ================
Catalogs Mailed 21,756 20,753
============ ================
Number of Stores:
Beginning of period 74 59
Premiere Stores opened 7 * 4
Premiere Stores closed 6 * 0
------------ ----------------
End of period 75 63
============ ================
Total Gross Sq. Ft @ End of Period 283.0 234.4
============ ================
Total Gross Sq. Ft @ End of Period -
Premiere 283.0 226.6
============ ================
* Totals include one store that was closed and relocated to another
site in the same mall during the first quarter of fiscal 2007;
and one store that was closed in the first quarter of fiscal 2007,
that is being remodeled and will reopen during the second quarter of
2007.
SOURCE: dELiA*s, Inc.
dELiA*s, Inc.
Stephen A. Feldman, 212-807-9060
or
ICR
Joseph Teklits/Jean Fontana, 203-682-8200