Charlotte Russe Announces Second Quarter Results.Business Editors SAN DIEGO--(BUSINESS WIRE)--April 17, 2003 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): -- 8% Second Quarter Sales Growth Despite Same Store Sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of Decline of 11.6% -- 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. Loss Per Share 7 Cents Before 16-Cent Charge for Closure of Charlotte's Room Test Stores - Total Loss of 23 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. Reported for Quarter -- 29 New Store Openings Fiscal Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , 75 Planned for Fiscal 2003 Charlotte Russe Holding, Inc. (Nasdaq/NM:CHIC), a growing specialty retailer of fashionable, value-priced apparel and accessories for young women, today reported financial results for the second quarter of fiscal 2003 ended March 29, 2003. 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: "In March, when we updated guidance for the second quarter, we indicated that retailing for young womens fashion apparel was being impacted by weak mall traffic and a very promotional environment. As we noted previously, the second quarter of our fiscal year is traditionally our weakest quarter in terms of average store volumes and the shift to 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 served to make business more difficult. The financial results announced today are consistent with our revised guidance. Sales at comparable stores were down 11.6% during the second quarter and loss per share, before taking into account the 16-cent impact of closing the Charlotte's Room stores, was 7 cents. "Maintaining strong store-level inventory controls has been one of our strengths, and this past quarter was no exception. We have positioned our inventories to levels appropriate for the later Easter this year and the associated sales from students on their Spring breaks. At the quarter-end, inventory levels at stores open for more than one year were up 8% over last year's level, consistent with our internal plans. "Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for our business continue to be impacted by the deleveraging of store occupancy expenses. The successful sales of clearance goods in early January January: see month. resulted in higher than normal markdown Markdown The difference between the highest current bid price among broker-dealers in the market and the lower price that a dealer charges a customer. Notes: The broker offers a lower price to try stimulate trading in hopes that they will make the money back on the extra levels, and we encountered higher than anticipated markdowns to manage inventory flow during February February: see month. and March. "Our early April sales results have shown that there is no reason to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the outlook for our business in the near term," said Zeichner. "We expected that the calendar shift of a later Easter would transfer sales from our second quarter (ended March 29th) into our third quarter (to end June June: see month. 28th); however, trends during the first two weeks of April have not achieved those expectations. Assuming no significant change in the overall retailing environment, we would guide investors to expect the current negative comparable store sales to continue throughout the third quarter of fiscal 2003; however, as previously stated, we would expect to be profitable for the quarter." "We are planning to open approximately 75 new stores during fiscal 2003. New stores continue to produce cash returns on investment of over 80% in their first year of operation; however, we are currently reviewing our new store opening goals for fiscal 2004 given the lack of visibility in the womens fashion retail environment," 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 second quarter increased 8% to $93.1 million from $86.1 million for the second quarter last year. Comparable store sales decreased 11.6% during the quarter, compared to a decrease of 2.8% for the second quarter of fiscal 2002. Net sales for the first 26 weeks of fiscal 2003 were $226.4 million, an increase of 14% from $198.0 million for the same period last year. Comparable store sales decreased 7.2% during the 26-week period, compared to a decrease of 8.1% that was reported for the same period last year. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , before taking into account the pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta $5.5 million charge associated with the closure of the Charlotte's Room stores, was $2.5 million as compared to $5.6 million of income during the same quarter last year. Net loss was $4.9 million as compared to income of $3.5 million for the same quarter last year. Diluted loss per share for the quarter was $0.23 as compared to net income of $0.15 for the same quarter of the prior year. The average number of shares outstanding for the recent quarter was 21.2 million calculated on a diluted basis as compared to 23.7 million for the second quarter of fiscal 2002. Diluted and basic shares were the same for the current quarter since options and warrants were excluded from the calculation of diluted loss per share as their effect would have been anti-dilutive. 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 first 26 weeks of fiscal 2003 decreased 76% to $4.3 million from $17.9 million for the same period last year. Net income decreased 77% to $2.5 million from $10.9 million for the same period 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 26-week period was $0.11 as compared to $0.46 for the same period of the prior year, a decrease of 76%. The average number of shares outstanding during the 26-week period was 23.5 million on a diluted basis compared to 23.6 million for the same period last year. Charlotte Russe Holding, Inc. is a growing mall-based specialty retailer of fashionable, value-priced apparel and accessories targeting young women between the ages of 15 and 35. The company operated a total of 270 Charlotte Russe and Rampage 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 March 29, 2003 which included 29 new stores opened during the first half of fiscal 2003. 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. 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: 3733583. 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 13, 2002, 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 OPERATIONS
(amounts in 000's, except per share data)
(unaudited)
Second Quarter Ended Six Months Ended
-------------------- -------------------
March 29, March 30, March 29, March 30,
2003 2002 2003 2002
--------- --------- --------- ---------
Net sales $93,098 $86,070 $226,427 $198,008
Cost of goods sold 74,841 63,241 171,578 142,886
--------- --------- --------- ---------
Gross profit 18,257 22,829 54,849 55,122
Selling, general &
administrative expenses 20,752 17,199 45,085 37,217
Store closing costs 5,500 --- 5,500 ---
--------- --------- --------- ---------
Operating income(loss) (7,995) 5,630 4,264 17,905
Interest income, net 22 82 31 83
Other charges (73) (70) (135) (148)
--------- --------- --------- ---------
Income(loss) before income
taxes (8,046) 5,642 4,160 17,840
Income tax expense(benefit) (3,139) 2,139 1,622 6,957
--------- --------- --------- ---------
Net income(loss) $(4,907) $3,503 $2,538 $10,883
========= ========= ========= =========
Basic earnings(loss) per share $(0.23) $0.17 $0.12 $0.52
========= ========= ========= =========
Diluted earnings(loss) per
share $(0,23) $0.15 $0.11 $0.46
========= ========= ========= =========
Basic weighted average shares
outstanding 21,236 20,949 21,226 20,888
Diluted weighted average shares
outstanding 21,236 23,700 23,494 23,608
CHARLOTTE RUSSE HOLDING, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(amounts in 000's)
(unaudited)
March 29, March 30,
2003 2002
--------- ---------
ASSETS
------
Cash and cash equivalents $17,694 $11,532
Inventories 34,683 25,187
Other current assets 8,044 2,922
Deferred tax assets 4,600 4,000
--------- ---------
Total current assets 65,021 43,641
Fixed assets, net 95,280 90,048
Goodwill, net 28,790 28,790
Other assets 1,371 1,427
--------- ---------
Total assets $190,462 $163,906
========= =========
LIABILITIES
-----------
Accounts payable trade $26,583 $23,180
Accounts payable other 4,049 3,348
Accrued payroll and related expense 2,320 2,669
Income and sales taxes payable 1,580 2,636
Other current liabilities 10,244 7,985
--------- ---------
Total current liabilities 44,776 39,818
Deferred rent 9,066 6,963
Other liabilities 283 179
Deferred tax liabilities 5,000 1,900
--------- ---------
Total liabilities 59,125 48,860
Total stockholders' equity 131,337 115,046
--------- ---------
Total liabilities and
stockholders' equity $190,462 $163,906
========= =========
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