Aeropostale Reports Record Fourth Quarter and Fiscal Year 2003 Results.Business Editors NEW YORK--(BUSINESS WIRE)--March 11, 2004 Aeropostale, Inc. (NYSE NYSE See: New York Stock Exchange : ARO) -- Fourth Quarter Earnings Per Share Increase 54% to $0.71 Versus $0.46 in Prior Year -- Announces Earnings Guidance for Fiscal 2004 Aeropostale, Inc. (NYSE: ARO), a mall-based specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. retailer of active and casual apparel for the teen market, today reported results for the fourth quarter and fiscal year ended January January: see month. 31, 2004. In a separate release today, the company announced that its board of directors approved a three-for-two stock split to be effected in the form of a stock dividend to holders of record on April 12, 2004. The company also announced that its board of directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: an increase of $35 million in its common stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program, which will bring the total stock repurchase program to $70 million. Net income for the fourth quarter reached a record level of $27.5 million or $0.71 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, ahead of the company's most recent guidance. This compares to $17.7 million or $0.46 per diluted share in the comparable quarter in the prior year. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter increased 32.1% to a record level of $272.6 million versus $206.4 million in the comparable period last year. Fourth quarter comparable store sales increased 8.5%, compared to an increase of 0.3% in the year ago quarter. Julian Julian or Julian the Apostate Latin Julianus Apostata orig. Flavius Claudius Julianus (born AD 331/332, Constantinople—died June 26/27, 363, Ctesiphon, Mesopotamia) Roman emperor (361–363), noted scholar and military leader. R. Geiger, Chairman and Chief Executive Officer, said, "We are extremely pleased with the results of the fourth quarter, which were driven by a successful holiday sales period. Our merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain assortment assortment /as·sort·ment/ (ah-sort´ment) the random distribution of nonhomologous chromosomes to daughter cells in metaphase of the first meiotic division. as·sort·ment n. was trend right and focused, and our merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. and promotional strategies were highly effective. Our strong performance during the holiday selling season underscores the strength of our brand and highlights the compelling nature of our concept." Net income for the 52 weeks ended January 31, 2004 was $54.3 million or $1.40 per diluted share, compared to net income of $31.3 million or $0.82 per diluted share in the prior year. Net income for the prior year excluding an equity based compensation charge was $34.0 million or $0.89 per diluted share (See Exhibit D). Net sales for the 52 weeks ended January 31, 2004 increased 33.4% to $734.9 million, compared to net sales of $550.9 million for the 52 weeks ended February February: see month. 1, 2003. Comparable store sales increased 6.6% for the full year, compared to an increase of 6.6% in the prior year. The company today also announced its earnings guidance for fiscal 2004. The company believes it will achieve earnings per share of $0.09 for the first quarter. For the full year, the company believes it will open 95 new stores, achieve mid single digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. comparable store sales and earnings per diluted share in the range of $1.72 to $1.73. Mr. Geiger continued, "Fiscal 2003 was an important year for our company strategically and financially. We reached record levels of sales and earnings, opened 95 stores, entered six new markets and solidified so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. our position as a destination brand within the mall mall: see shopping center. (World-Wide Web) mall - A collection of World-Wide Web documents featuring commercial products and services, usually served by one particualr Internet access provider. . We remain excited as we head into the new fiscal year and we believe that we are prepared to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the many opportunities that lie ahead." The Company will be holding a conference call today at 4:30 P.M. to review its fiscal 2003 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 Digital jukebox software for Windows from Microsoft that plays a variety of audio, video and streaming formats including MP3, WMA, CD audio and MIDI. Starting with Version 6.2 in 1999, the Windows Media Rights Manager was added for securing copyrighted content. installed. If you do not have Windows Media Player, go to the latter site prior to the call, where you can download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. the software for free. About Aeropostale, Inc. Aeropostale, Inc. (www.aeropostale.com) 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 high-energy adj. 1. Of or relating to elementary particles with energies exceeding hundreds of thousands of electron volts. 2. Yielding a large amount of energy upon undergoing chemical reaction. 3. Vigorous; dynamic. 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 currently operates 462 stores in 41 states. Special Note: Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Except for historical information contained herein, the statements made in this release constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. dated July July: see month. 28, 2003 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)
Jan. 31, Feb. 1,
2004 2003
-------- --------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $138,356 $ 87,475
Merchandise inventory 61,807 46,645
Other current assets 13,252 10,669
-------- --------
Total current assets 213,415 144,789
FIXTURES, EQUIPMENT AND IMPROVEMENTS -- Net 92,578 69,448
OTHER ASSETS 1,055 8,795
-------- --------
TOTAL ASSETS $307,048 $223,032
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 30,477 $ 17,954
Accrued expenses 40,196 40,044
-------- --------
Total current liabilities 70,673 57,998
OTHER LIABILITIES 50,682 37,075
COMMITMENT AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock -- par value, $0.01 per share;
200,000 authorized, 37,863 and 35,306 shares
issued and outstanding 379 353
Treasury stock - at cost (630 shares) (17,695) --
Additional paid-in capital 63,478 41,657
Other comprehensive loss (672) --
Retained earnings 140,203 85,949
-------- --------
Total stockholders' equity 185,693 127,959
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $307,048 $223,032
======== ========
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
Jan. 31, 2004 Feb. 1, 2003
---------------- ---------------
% of % of
Sales Sales
NET SALES $272,642 100.0% $206,423 100.0%
COST OF SALES including certain
buying, occupancy and warehousing
expenses 182,680 67.0 142,965 69.3
-------- --------
GROSS PROFIT 89,962 33.0 63,458 30.7
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 45,088 16.5 34,109 16.5
-------- --------
INCOME FROM OPERATIONS 44,874 16.5 29,349 14.2
INTEREST INCOME -- Net (261) (0.1) (113) (0.1)
-------- --------
INCOME BEFORE INCOME TAXES 45,135 16.6 29,462 14.3
PROVISION FOR INCOME TAXES 17,613 6.5 11,787 5.7
-------- --------
NET INCOME $ 27,522 10.1% $ 17,675 8.6%
======== ========
Basic net income per share $ 0.74 $ 0.50
======== ========
Diluted net income per share $ 0.71 $ 0.46
======== ========
Basic weighted average number of
shares outstanding 37,399 35,222
Diluted weighted average number of
shares outstanding 39,029 38,435
STORE DATA:
Comparable store sales 8.5% 0.3%
Stores open at end of period 459 367
Total gross square footage at end of
period 1,611,669 1,299,606
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
Jan. 31, 2004 Feb. 1, 2003
--------------- ---------------
% of % of
Sales Sales
NET SALES $734,868 100.0% $550,904 100.0%
COST OF SALES including certain
buying, occupancy and warehousing
expenses 505,152 68.7 388,301 70.5
-------- --------
GROSS PROFIT 229,716 31.3 162,603 29.5
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 141,520 19.3 110,506 20.1
-------- --------
INCOME FROM OPERATIONS 88,196 12.0 52,097 9.5
INTEREST INCOME -- Net (760) (0.1) (56) --
-------- --------
INCOME BEFORE INCOME TAXES 88,956 12.1 52,153 9.5
PROVISION FOR INCOME TAXES 34,702 4.7 20,863 3.8
-------- --------
NET INCOME $ 54,254 7.4% $ 31,290 5.7%
======== ========
Basic net income per share $ 1.49 $ 0.90
======== ========
Diluted net income per share $ 1.40 $ 0.82
======== ========
Basic weighted average number of
shares outstanding 36,505 34,387
Diluted weighted average number of
shares outstanding 38,858 37,854
STORE DATA:
Comparable store sales 6.6% 6.6%
Stores open at end of period 459 367
Total gross square footage at end of
period 1,611,669 1,299,606
EXHIBIT D: The following proforma condensed consolidated
statements of income for the 52 weeks ended January 31, 2004 and
February 1, 2003 excludes an equity based compensation charge for the
respective periods, if applicable.
PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share date)
52 weeks ended
-------------------
Jan. 31, Feb. 1,
2004 2003
-------- --------
NET INCOME $ 54,254 $ 31,290
Equity based compensation -- 4,473
Income tax effect (a) -- (1,789)
Cumulative accounting change -- --
-------- --------
PROFORMA NET INCOME $ 54,254 $ 33,974
======== ========
PROFORMA DILUTED EARNINGS PER SHARE: $ 1.40 $ 0.89
======== ========
(a) Assumes a tax rate of 40%
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