American Eagle Outfitters Reports Fourth Quarter EPS of $0.71 versus $0.70 from Continuing Operations Last Year.WARRENDALE, Pa. -- Achieves Record Annual EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $1.89 for Fiscal 2005; Provides First Quarter EPS Guidance American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Eagle Outfitters, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AEOS AEOS American Eagle Outfitters Inc. (stock symbol) AEOS Advanced Electro-Optical System (3.67 meter adaptive optical telescope on Maui) AEOS Advanced Electro Optical Sensor ) today announced its consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: financial results for the fourth quarter and year ended January January: see month. 28, 2006. Fourth Quarter Ended January 28, 2006 --Total sales increased 13.4% to $764.4 million from $674.0 million for the quarter ended January 29, 2005. --Comparable store sales increased 7.8% compared to a 28.6% increase in the corresponding period last year. --Gross profit for the quarter increased to $354.2 million, or 46.3% as a percent to sales, from $332.4 million, or 49.3% as a percent to sales last year. The decline in gross profit as a percent to sales was primarily due to a lower 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 margin as well as the deleveraging of buying, occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy and warehousing costs. --Operating income for the quarter increased to $174.2 million from $171.7 million last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. as a percent to sales was 22.8% compared to 25.5% last year. --On January 27, 2006, the Company entered into an agreement to sell certain assets of National Logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. Services, its Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. distribution operation. As a result of this agreement, the Company recognized a $0.01 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 loss. Additionally, the assets subject to this agreement have been classified as held-for-sale for all periods presented in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. . This transaction was completed during February February: see month. 2006. --During the quarter, the Company recognized a tax charge of $0.02 per diluted share related to the anticipated repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of foreign earnings. This charge is reflected in the fourth quarter's 40% effective tax rate. --Net income for the quarter increased to $107.5 million, or $0.71 per share on a diluted basis, from net income of $100.9 million, or $0.66 per share on a diluted basis last year (which included a $0.04 loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. ). As described above, net income includes a $0.01 per diluted share loss related to National Logistics Services and a $0.02 per diluted share tax charge related to the anticipated repatriation of foreign earnings. Fiscal Year Ended January 28, 2006 --Total sales increased 22.8% to $2.309 billion from $1.881 billion for the twelve months ended January 29, 2005. --Comparable store sales increased 15.5% compared to a 21.4% increase in the same twelve month period last year. --Gross profit for the period increased to $1.074 billion, or 46.5% as a percent to sales, from $877.8 million, or 46.7% as a percent to sales last year. The decline in gross profit as a percent to sales was primarily due to a lower merchandise margin, partially offset by the leveraging of buying, occupancy and warehousing costs. --Operating income for the period increased to $461.1 million, or 20.0% as a percent to sales, from $362.7 million, or 19.3% as a percent to sales last year. --Net income for the period increased to $294.2 million, or $1.89 per share on a diluted basis, from net income of $213.3 million, or $1.42 per share on a diluted basis last year (which included a $0.07 loss from discontinued operations). As described above, net income includes a $0.01 per diluted share loss related to National Logistics Services and a $0.02 per diluted share tax charge related to the anticipated repatriation of foreign earnings. In a separate release this morning, the Company announced a February comparable store sales increase of 6%. At this time, Management expects first quarter earnings to be in the range of $0.36 to $0.38, compared to $0.35 per share last year. Guidance in 2006 includes the expensing of stock options. The first quarter guidance includes stock option expense of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.02 per share. For the year, we expect stock option expense to be approximately $0.04-$0.05 per share. At 9:00 a.m. Eastern Time, on March 1, 2006, the Company's management team will host a conference call to review the financial results. To listen to the call, dial 877-601-0864 five to seven minutes prior to the scheduled start time. The conference call will also be simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics broadcast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.ae.com or www.streetevents.com. Anyone unable to listen to the call can access a replay beginning March 1, 2006 at 12:00 p.m. Eastern Time through March 15th. To listen to the replay, dial 1-800-642-1687 and reference confirmation code 3321190#. An audio replay of the conference call will also be available at www.ae.com. American Eagle Outfitters (NASDAQ:AEOS) is a leading retailer that designs, markets and sells its own brand of laidback, current clothing for 15 to 25 year-olds, providing high-quality merchandise at affordable prices. AE's original collection includes standards like jeans and graphic T's as well as essentials like accessories, outerwear, footwear Footwear consists of garments worn on the feet. It is worn for a variety of reasons, including protection against the environment, hygiene and adornment. Usually, socks and other hosiery are worn between the feet and the footwear, except for sandals and flip flops (thongs). , basics and swimwear. American Eagle Outfitters currently operates 798 stores in 50 states, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. , and 71 AE stores in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . AE also operates ae.com, which offers additional sizes and styles of favorite AE merchandise and ships around the world. The company plans to open MARTIN + OSA Martin + Osa (Martin & Osa) is a new clothing brand developed by American Eagle Outfitters. The store's name and inspiration comes from Martin and Osa Johnson, a globetrotting husband and wife team from Kansas who explored Africa and the South Pacific Islands, chronicling their , a new sportswear concept targeting 25 to 40 year old women and men, in the fall of 2006. For additional information and updates, visit www.martinandosa.com. "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: This release contains 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. , which represent our expectations or beliefs concerning future events, specifically regarding first quarter earnings. All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors beyond the Company's control. Such factors include, but are not limited to the risk that our Spring assortments are not well received, and as a result, our first quarter sales, markdowns and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. earnings expectations may not be achieved, and those other risks described in the "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" section of the Company's filings with the Securities and Exchange Commission. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in any such forward-looking statements. The Company does not undertake to publicly update or revise its forward-looking statements even if future changes make it clear that projected results expressed or implied will not be realized.
AMERICAN EAGLE OUTFITTERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
January 28, January 29,
2006 2005
----------- -----------
(Unaudited)
ASSETS
Cash, cash equivalents and short-term
investments $ 751,518 $ 589,607
Merchandise inventory (1) 210,739 170,576
Other current assets 106,232 91,601
Assets held for sale (2) 12,183 13,581
----------- -----------
Total current assets 1,080,672 865,365
----------- -----------
Property and equipment, net 345,518 339,833
Goodwill, net 9,950 9,950
Long-term investments 145,774 84,416
Other assets, net 23,735 29,362
----------- -----------
Total Assets $ 1,605,649 $ 1,328,926
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable (1) $ 139,197 $ 108,929
Accrued compensation and payroll taxes 58,186 36,008
Accrued rent 52,506 45,089
Accrued income and other taxes 43,273 33,926
Unredeemed stored value cards and gift
certificates 43,045 32,724
Current portion of deferred lease credits 10,406 9,798
Other current liabilities 15,010 16,152
----------- -----------
Total current liabilities 361,623 282,626
----------- -----------
Deferred lease credits 60,087 57,758
Other non-current liabilities 28,387 25,056
----------- -----------
Total non-current liabilities 88,474 82,814
----------- -----------
Total stockholders' equity 1,155,552 963,486
----------- -----------
Total Liabilities and Stockholders'
Equity $ 1,605,649 $ 1,328,926
----------- -----------
----------- -----------
Current Ratio 2.99 3.06
(1) The Company has historically recognized ownership of
merchandise inventory for financial reporting purposes at the
point when it arrived at one of the Company's deconsolidation
centers. With upgrades to merchandise systems and increased
visibility, the Company will record merchandise at the FOB port,
which is when risk of loss and title transfers to the Company.
Merchandise inventory and accounts payable as of January 28, 2006
and January 29, 2005 have been adjusted by $31.0 million and
$32.6 million, respectively, to reflect this change.
(2) Assets held for sale represent the assets of National
Logistics Services subject to the sales agreement entered into
during the fourth quarter of Fiscal 2005, which closed in
February 2006. Amounts as of January 29, 2005 have been
reclassified for comparative purposes.
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
------------------------ ------------------------
January 28, January 29, January 28, January 29,
2006 2005 2006 2005
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited)
Net sales $ 764,367 $ 674,024 $ 2,309,371 $ 1,881,241
Cost of sales,
including certain
buying, occupancy
and warehousing
expenses 410,123 341,647 1,235,620 1,003,433
----------- ----------- ----------- -----------
Gross profit 354,244 332,377 1,073,751 877,808
Selling, general
and administrative
expenses 160,869 142,386 538,091 446,829
Depreciation and
amortization 19,149 18,304 74,578 68,273
----------- ----------- ----------- -----------
Operating income 174,226 171,687 461,082 362,706
Other income, net 4,378 3,343 15,885 4,129
----------- ----------- ----------- -----------
Income before
income taxes 178,604 175,030 476,967 366,835
Provision for
income taxes 71,468 68,086 183,256 142,603
----------- ----------- ----------- -----------
Income from
continuing
operations, net of
tax 107,136 106,944 293,711 224,232
Income (loss) from
discontinued
operations, net of
tax 405 (6,027) 442 (10,889)
----------- ----------- ----------- -----------
Net income $ 107,541 $ 100,917 $ 294,153 $ 213,343
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Basic per common
share amounts:
Income from
continuing
operations $ 0.72 $ 0.73 $ 1.94 $ 1.55
Loss from
discontinued
operations 0.00 (0.04) 0.00 (0.08)
----------- ----------- ----------- -----------
Net income per
basic common
share $ 0.72 $ 0.69 $ 1.94 $ 1.47
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Diluted per common
share amounts:
Income from
continuing
operations $ 0.71 $ 0.70 $ 1.89 $ 1.49
Loss from
discontinued
operations 0.00 (0.04) 0.00 (0.07)
----------- ----------- ----------- -----------
Net income per
diluted common
share $ 0.71 $ 0.66 $ 1.89 $ 1.42
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average
common shares
outstanding -
basic 148,112 147,094 151,604 145,150
Weighted average
common shares
outstanding -
diluted 151,461 153,402 155,354 150,244
----------------------------------------------------------------------
Total gross square
footage at end of
period: 4,780,187 4,540,095
Store count at end
of period: 870 846
----------------------------------------------------------------------
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