American Eagle Outfitters Reports Fourth Quarter and Fiscal 2003 Earnings.Business Editors WARRENDALE, Pa.--(BUSINESS WIRE)--Feb. 26, 2004 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: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. 31, 2004. The Company also stated that consolidated February February: see month. month-to-date comparable store sales have increased in the mid-teens. Fourth Quarter Ended January 31, 2004 -- Total sales increased 5.2% to $517.3 million from $491.6 million for the quarter ended February 1, 2003. -- Sales for the fourth quarter 2003 included $26.7 million from the Bluenotes/Thriftys operation, compared to $22.2 million for the corresponding period last year. -- Sales for the fourth quarter 2003 included $21.6 million from the Company's Direct business, which includes our e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. business as well as our catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. , compared to $18.9 million for the corresponding period last year. (The Company's Direct business is not included in our comparable store sales calculation.) -- Comparable store sales for the American Eagle Outfitters stores declined 5.1% for the quarter ended January 31, 2004. -- Consolidated comparable store sales, which include American Eagle and Bluenotes/Thriftys stores, declined 4.7% when compared to the corresponding period last year. -- Reported net income for the quarter decreased to $35.4 million, or $0.49 per share on a 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. basis. Reported net income includes a non-cash goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $6.1 million, or $0.08 per share on a diluted basis, related to Bluenotes The Bluenotes was a low cost Canadian brand was established in 1984, and has developed into Canada's leading denim retailer. Bluenotes were Thrifty's at clothing store chain and thrived in the 1980s and 1990s when teens and young adults who did not want to shop at their parent's remaining goodwill. -- Adjusted net income(a) for the quarter, which excludes a non-cash goodwill impairment charge, increased to $41.5 million, or $0.57 per share on a diluted basis, from net income of $38.9 million, or $0.54 per share on a diluted basis last year. Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. for the Twelve Months Ended January 31, 2004 -- Total sales increased 3.9% to $1.520 billion from $1.463 billion for the twelve months ended February 1, 2003. -- Sales for the twelve months included $84.5 million from the Bluenotes/Thriftys operation, compared to $80.2 million for the corresponding period last year. -- Sales for the twelve months included $54.6 million from the Company's Direct business, which includes our e-commerce business as well as our catalog, compared to $45.6 million for the corresponding period last year. (The Company's Direct business is not included in our comparable store sales calculation.) -- Comparable store sales for the American Eagle Outfitters stores declined 6.6% when compared to the same twelve month period last year. -- Consolidated comparable store sales, which include American Eagle and Bluenotes/Thriftys stores, declined 6.7% when compared to the corresponding period last year. -- Reported net income for the year-to-date period decreased to $60.0 million, or $0.83 per share on a diluted basis. Reported net income includes non-cash goodwill impairment charges of $14.1 million, or $0.20 per share on a diluted basis. -- Adjusted net income(a) for the year-to-date period, which excludes non-cash goodwill impairment charges, decreased to $74.1 million, or $1.03 per share on a diluted basis from net income of $88.7 million, or $1.22 per share on a diluted basis last year. (a) A complete definition and discussion of the Company's use of non-GAAP measures, identified by "(a)", is located below. At 9:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy , on February 26, 2004, the Company's management team will host a conference call to review the financial results. To listen to the call, dial 877-601-0864 at least ten minutes prior to the start of the call. 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. A replay will be available beginning February 26th at noon EST through March 9th. To listen to the replay, dial 1-800-642-1687 and reference confirmation code #4809611. An audio replay of the conference call will also be available at www.ae.com until May 13, 2004. American Eagle Outfitters (Nasdaq:AEOS) is a leading lifestyle retailer that designs, markets, and sells its own brand of relaxed relaxed, adj freed from tension, being at ease, as applied to muscles and the mind. , casual clothing for 15 to 25 year olds, providing high-quality 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 at affordable prices. AE's collection includes modern basics like jeans, cargo pants cargo pants or trousers Noun, pl loose trousers with a large external pocket on the side of each leg , and graphic Ts as well as a stylish Stylish is a free Mozilla extension that allows for the manipulation of web pages and XUL application user interfaces through the use of CSS or user styles available localy or from centralized web-site [1], which allows style sharing. 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. of cool accessories, outerwear and 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). . AE's 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. subsidiary, Bluenotes/Thriftys, targets a slightly younger demographic See demographics. , offering a more urban/suburban, denim-driven collection for 12 to 22 year-olds. American Eagle Outfitters currently operates 740 AE stores in 49 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). and 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. , 65 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 , and 110 Bluenotes/Thriftys stores in Canada. AE also operates via its Web business, www.ae.com, which offers additional sizes and styles of favorite AE merchandise. Non-GAAP Measure Disclosure The following definitions are provided for the two non-GAAP (Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ) measures used by the Company in this release. The two measures are adjusted net income and adjusted diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . Each use is indicated by "(a)". We do not intend for these two non-GAAP measures to be considered in isolation or as a substitute for the related GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures. Other companies may define the measures differently. Adjusted Financial Results In this release, adjusted net income and adjusted diluted 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. each exclude the non-cash goodwill impairment charges of $6.1 million, or $0.08 per share, and $14.1 million or $0.20 per share, for the fourth quarter and year-to-date periods ended January 31, 2004, respectively, related to our Bluenotes operation. We believe that these adjusted measures provide investors with an important perspective on the current underlying operating performance of our businesses by isolating i·so·late tr.v. i·so·lat·ed, i·so·lat·ing, i·so·lates 1. To set apart or cut off from others. 2. To place in quarantine. 3. and excluding the impact of the non-cash impairment charges related to our acquisition of the Bluenotes business in fiscal 2000. -- Adjusted net income: In this release, we define "adjusted net income" to start with GAAP net income and then add back the $6.1 million and $14.1 million Bluenotes non-cash goodwill impairment charges for the fourth quarter and year-to-date periods ended January 31, 2004, respectively. The table below shows a reconciliation between GAAP net income and adjusted net income. -- Adjusted diluted EPS: In this release, we define "adjusted diluted EPS" to start with GAAP diluted EPS and then add back the $0.08 per share and $0.20 per share Bluenotes non-cash goodwill impairment charges for the fourth quarter and year-to-date periods ended January 31, 2004, respectively. The table below shows a reconciliation between GAAP diluted EPS and adjusted diluted EPS.
Non-GAAP Financial Measures:
Reconciliation of GAAP Net Income and Diluted EPS to Adjusted Net
Income and Diluted EPS
Three Months Ended Twelve Months Ended
----------------------- -----------------------
January 31, February 1, January 31, February 1,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Reported GAAP
Net Income $ 35,354 $ 38,876 $ 60,000 $ 88,735
Non-Cash Goodwill
Impairment Charge 6,118 - 14,118 -
--------- --------- --------- ---------
Adjusted Net Income $ 41,472 $ 38,876 $ 74,118 $ 88,735
========= ========= ========= =========
Reported GAAP
Diluted EPS $ 0.49 $ 0.54 $ 0.83 $ 1.22
Non-Cash Goodwill
Impairment Charge 0.08 - 0.20 -
--------- --------- --------- ---------
Adjusted Diluted EPS $ 0.57 $ 0.54 $ 1.03 $ 1.22
========= ========= ========= =========
AMERICAN EAGLE OUTFITTERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
January 31, February 1,
2004 2003
----------- -----------
ASSETS
Cash, cash equivalents and
short-term investments $ 337,812 $ 241,573
Merchandise inventory 120,586 124,708
Other current assets 67,225 60,445
----------- -----------
Total current assets 525,623 426,726
----------- -----------
Property and equipment, net 278,689 267,479
Goodwill, net 10,136 23,614
Other assets, net 50,623 23,520
----------- -----------
Total Assets $ 865,071 $ 741,339
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 71,330 $ 50,608
Accrued compensation and payroll taxes 14,409 13,001
Accrued rent 30,985 28,476
Accrued income and other taxes 28,669 12,655
Unredeemed stored value cards and
gift certificates 25,785 22,837
Current portion of note payable 4,832 4,225
Other current liabilities 13,025 9,784
----------- -----------
Total current liabilities 189,035 141,586
----------- -----------
Note Payable 13,874 16,356
Other non-current liabilities 18,492 5,915
----------- -----------
Total non-current liabilities 32,366 22,271
----------- -----------
Total stockholders' equity 643,670 577,482
----------- -----------
Total Liabilities and Stockholders'
Equity $ 865,071 $ 741,339
=========== ===========
Current Ratio 2.78 3.01
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
------------------------ ------------------------
January 31, February 1, January 31, February 1,
2004 2003 2004 2003
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Net sales $ 517,255 $ 491,554 $ 1,519,968 $ 1,463,141
Cost of sales,
including
certain buying,
occupancy and
warehousing
expenses 322,449 315,136 965,716 920,643
----------- ----------- ----------- -----------
Gross profit 194,806 176,418 554,252 542,498
Selling,
general and
administrative
expenses 112,875 101,614 379,289 350,752
Depreciation and
amortization 14,729 13,247 56,281 50,661
Goodwill
impairment loss 6,118 - 14,118 -
----------- ----------- ----------- -----------
Operating income 61,084 61,557 104,564 141,085
Other income, net 383 1,387 2,021 2,528
----------- ----------- ----------- -----------
Income before
income taxes 61,467 62,944 106,585 143,613
Provision for
income taxes 26,113 24,068 46,585 54,878
----------- ----------- ----------- -----------
Net income $ 35,354 $ 38,876 $ 60,000 $ 88,735
=========== =========== =========== ===========
Basic income
per common share $ 0.50 $ 0.55 $ 0.84 $ 1.24
Diluted income
per common share $ 0.49 $ 0.54 $ 0.83 $ 1.22
Weighted average
common shares
outstanding -
basic 71,179 71,132 71,113 71,709
Weighted average
common shares
outstanding -
diluted 72,251 72,034 72,207 72,783
------------------------------ ------------ ----------- ------------
Total gross square
footage at end of
period:
American Eagle
Outfitters Stores 4,239,497 3,817,442
Bluenotes/Thriftys
Stores 351,732 353,270
------------------------------ ------------ ----------- ------------
Store count at
end of period:
American Eagle
Outfitters Stores 805 753
Bluenotes/Thriftys
Stores 110 111
------------------------------ ------------ ----------- ------------
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