Charlotte Russe Announces Fourth Quarter and Year End Results.Business Editors SAN DIEGO--(BUSINESS WIRE)--Oct. 24, 2002 Charlotte Russe charlotte russe n. A cold dessert of Bavarian cream set in a mold lined with ladyfingers. [French : charlotte, charlotte + russe, Russian.] Noun 1. Holding, Inc.(Nasdaq/NM:CHIC): -- 22% Fourth Quarter Sales Growth Despite Lower Same Store Sales, 26% Sales Growth for Full Year -- 15 New Store Openings During the Fourth Quarter, 63 New Stores Opened During Fiscal Year -- Net Income Improves to $5.9 Million with EPS of 25 Cents for the Fourth Quarter, $22.4 Million of Net Income with EPS of 95 Cents for Full Year Charlotte Russe Holding, Inc. (Nasdaq/NM: CHIC), a rapidly growing specialty retailer of fashionable, value-priced apparel and accessories for young women, today reported financial results for the fourth quarter and full fiscal 2002 ended September September: see month. 28, 2002. Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Bernard Ber·nard , Claude 1813-1878. French physiologist noted for his study of the digestive and nervous systems. Zeichner remarked: "We were disappointed with business during our important back-to-school season; however, with strong merchandise-level gross margins, along with the benefit of continued focus on expense control, we achieved 25 cents of earnings per share in the fourth quarter compared to 23 cents last year. "We maintain strong store-level inventory controls to support our sales, and our full year inventory turn ratio was about 11.5 times. At the end of the fourth quarter, inventory levels at comparable stores were up 16% over prior year levels. Our inventory levels are very dynamic. As of this past week, inventories at comparable stores were about 1% higher than the same week last year, and we are very comfortable with the freshness and fashion orientation of our merchandise on hand. "We continue to be cautious about the near-term near-term adj. Of, for, or involving a short period of time in the near future. outlook," said Zeichner. "Weak mall traffic and shaky consumer confidence is expected to impact the important Christmas Christmas [Christ's Mass], in the Christian calendar, feast of the nativity of Jesus, celebrated in Roman Catholic and Protestant Churches on Dec. 25. In liturgical importance it ranks after Easter, Pentecost, and Epiphany (Jan. 6). selling season, while the calendar shift of a later Easter Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it will transfer sales from our second quarter into the third quarter. The benefit of sales from our new stores is expected to buffer buffer, solution that can keep its relative acidity or alkalinity constant, i.e., keep its pH constant, despite the addition of strong acids or strong bases. some of the impact of these factors. Accordingly, assuming no significant change in the overall retailing environment, we would guide investors to expect flat comparable store sales during the first quarter of fiscal 2003 with earnings per share of 32 to 36 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. 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, compared to 31 cents last year. "We continue to be confident about the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth opportunities for our business. We opened 63 new stores during the past year from internally generated cashflow, and our strong balance sheet carries no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . With average cashflow from new stores continuing to produce returns on investment of over 80%, reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of our cashflow back into the business represents an excellent use of corporate funds," the Chief Executive concluded. Financial Results: 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 fourth quarter increased 22% to $109.4 million from $89.3 million for the fourth quarter last year. Comparable store sales decreased 5.0% during the quarter, compared to a decrease of 7.4% for the fourth quarter of fiscal 2001. Net sales for the 52-week fiscal year ended September 28, 2002 were $409.4 million, an increase of 26% from $324.8 million for fiscal 2001. Comparable store sales decreased 5.4% for the fiscal year, compared to a decrease of 1.7% for the prior fiscal 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. for the fourth quarter increased 20% to $9.7 million from $8.1 million for the same quarter last year. Net income increased 11% to $5.9 million from $5.3 million for the same quarter last year. 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 for the quarter was $0.25 as compared to $0.23 for the same quarter of the prior year, an increase of 9%. The average number of shares outstanding during the recent quarter was 23.6 million on a diluted basis, compared to 23.5 million for the fourth quarter last year. In the fourth quarter of fiscal 2001, the reversal of income tax accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. benefited 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. by approximately 1.7 cents. On the other hand, elimination of goodwill amortization in fiscal 2002 helped the fourth quarter by approximately 0.8 cents. After taking these factors into account, earnings per share rose approximately 14%, on an adjusted basis, during the fourth quarter. Operating income for the fiscal year increased 6% to $36.9 million from $34.8 million for fiscal 2001. Net income increased 4% to $22.4 million from $21.5 million for the prior fiscal year. Diluted earnings per share for fiscal 2002 was $0.95 as compared to $0.92 for fiscal 2001, an increase of 3%. After taking into account the elimination of goodwill amortization in fiscal 2002 and the income tax reversal in fiscal 2001 mentioned above, earnings per share for the full year rose approximately 2%, on an adjusted basis. Charlotte Russe Holding, Inc. is a rapidly growing mall-based specialty retailer of fashionable, value-priced apparel and accessories targeting young women between the ages of 15 and 35. The company, under its three distinct store concepts, operated a total of 251 stores in 34 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. , as of September 28, 2002 which included 63 new stores opened during fiscal 2002. In total, the company expects to open 75 new Charlotte Russe and Rampage stores during fiscal 2003 which ends in September 2003. The "Charlotte Russe" stores offer fashionable, affordable apparel and accessories that have been tested and accepted by the marketplace, thus appealing to women who prefer established fashion trends. The "Rampage" stores feature emerging fashion trends and appeal to women with a flair for making fashion statements and who want to create a cutting-edge look. The "Charlotte's Room" stores are a test concept that provides a diverse offering of gifts, accessories and some apparel items for girls and younger women ranging in ages from 11 to 17. Interested listeners are invited to participate in today's Charlotte Russe conference call at 11:00 a.m. Eastern Time which will be broadcast over the internet at http://www.charlotte-russe.com. To listen to the live call, please go to the web site at least 15 minutes early to register, 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. , and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at the Company's web site shortly after the call, or by calling (877)519-4471, PIN: 3412094. 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 the historical information contained herein, this press 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. that are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not limited to general and regional economic conditions, industry trends, consumer demands and preferences, competition from other retailers and uncertainties generally associated with women's apparel and accessory accessory, in criminal law, a person who, though not present at the commission of a crime, becomes a participator in the crime either before or after the fact of commission. retailing. A complete description of these factors, as well as others that could affect the Company's business, is set forth in the Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , filed with the Securities and Exchange Commission on December December: see month. 13, 2001, and any amendments thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. .
-- Financial statements follow --
CHARLOTTE RUSSE HOLDING, INC.
CONSOLIDATED STATEMENTS OF INCOME
(amounts in 000's, except per share data)
(unaudited)
Fourth Quarter Ended Twelve Months Ended
---------------------- ---------------------
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2002 2001 2002 2001
----------- ---------- --------- ----------
Net sales $109,418 $ 89,339 $409,382 $324,825
Cost of goods sold 79,059 63,552 296,006 226,065
----------- ---------- --------- ----------
Gross profit 30,359 25,787 113,376 98,760
Selling, general &
administrative expenses 20,695 17,494 76,516 63,114
Amortization of goodwill --- 223 --- 895
----------- ---------- --------- ----------
Operating income 9,664 8,070 36,860 34,751
Interest income, net 67 101 164 425
Other charges (78) (82) (289) (315)
----------- ---------- --------- ----------
Income before income taxes 9,653 8,089 36,735 34,861
Income taxes 3,765 2,795 14,327 13,370
----------- ---------- --------- ----------
Net Income $ 5,888 $ 5,294 $ 22,408 $ 21,491
=========== ========== ========= ==========
Basic earnings per share $0.28 $0.25 $1.06 $1.04
=========== ========== ========= ==========
Diluted earnings per share $0.25 $0.23 $0.95 $0.92
=========== ========== ========= ==========
Basic weighted average
shares outstanding 21,210 20,792 21,045 20,596
Diluted weighted average
shares outstanding 23,630 23,508 23,694 23,428
CHARLOTTE RUSSE HOLDING, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(amounts in 000's)
(unaudited)
Sept. 28, Sept. 29,
2002 2001
--------- ----------
ASSETS
Cash and cash equivalents $ 13,553 $ 10,031
Inventories 33,319 23,537
Other current assets 2,503 2,560
Deferred tax assets 4,300 3,700
--------- ----------
Total current assets 53,675 39,828
Fixed assets, net 95,632 77,351
Goodwill, net 28,790 28,790
Other assets 1,406 1,452
--------- ----------
Total assets $179,503 $147,421
========= ==========
LIABILITIES
Accounts payable trade $ 24,929 $ 19,607
Accounts payable other 5,445 4,826
Accrued payroll and related expense 2,372 1,932
Income and sales taxes payable 1,259 5,092
Other current liabilities 6,752 5,928
--------- ----------
Total current liabilities 40,757 37,385
Notes payable to bank --- ---
Deferred rent 8,377 5,575
Other liabilities 209 269
Deferred tax liabilities 1,600 2,000
--------- ----------
Total liabilities 50,943 45,229
Total stockholders' equity 128,560 102,192
--------- ----------
Total liabilities and stockholders' equity $179,503 $147,421
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