Jo-Ann Stores Announces Results for First Quarter.HUDSON, Ohio Hudson is a city in Summit County, Ohio, United States. The population was 22,439 at the 2000 census, making it the 389th largest city in the midwest. This number rose to 23,154 at the 2006 census estimates [1]. -- Jo-Ann Stores Jo-Ann Stores Inc. (NYSE: JAS) is a specialty retailer of crafts and fabrics based in Hudson, Ohio, United States. It operates the retail chains Jo-Ann Fabrics and Jo-Ann Etc. The headquarters of the company is located in the former General Motors Terex plant. , Inc. (NYSE NYSE See: New York Stock Exchange : JAS JAS James JAS Journal of Animal Science JAS Jamaica AIDS Support JAS Journal Abbreviation Sources JAS Japan Air System JAS Just A Second JAS Japanese Agricultural Standard JAS Jordanian Astronomical Society (Amman, Jordan) ) today announced financial results for its fiscal 2007 first quarter ended April 29, 2006. Net loss for the first quarter of fiscal 2007 was $6.6 million, or $0.28 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. common share, compared with net income of $4.2 million, or $0.18 per diluted common share 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 first quarter increased 1.0% to $424.7 million from $420.7 million in the prior year. Same-store sales Same-store sales is a business term which refers to the revenue generated by one of a retail chain's specific outlets during a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year. decreased 3.9% for the quarter, versus a same-store sales increase of 0.6% in the first quarter last year. Review of Operating Results Gross margins for the first quarter of fiscal 2007 decreased to 46.6% of net sales from 48.7% in the first quarter last year, due to higher markdowns compared to last year. As expected, in an effort to sell-through sell-through Adjective of the sale of prerecorded video cassettes, without their first being for hire only excess and discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: inventory, the first quarter gross margin rate performance was significantly impacted. Selling, general and administrative expenses increased to 44.7% of sales in the first quarter of fiscal 2007 from 42.9% in the first quarter last year. The increase in percentage is due to the lack of leverage resulting from the same-store sales performance, coupled with 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. costs related to the opening of the distribution center in Opelika, Alabama Opelika is a city in Lee County in east central Alabama. It is the county seat of Lee County and is a principal city, along with Auburn, Alabama, in the Auburn-Opelika, Alabama Metropolitan Statistical Area (MSA). , and increases in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , primarily driven by increases in store fixed expenses and advertising, resulting from the larger number of superstores This is a list of superstores by country. Multi-national
Alan A`lan´ n. 1. A wolfhound. Rosskamm, chairman and chief executive officer said, "As expected, our sales growth and gross margin rate remain challenged as we execute on our repair plan against a backdrop Backdrop may refer to:
Mr. Rosskamm, continued, "Our new Opelika, Alabama distribution center now serves approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 170 of our stores, and we expect it to enhance the performance of our logistics network. Also, we are making substantial progress on our merchandise 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. project. This project should be completed by the beginning of the third quarter and will bring new, fresh merchandise to our stores which should help drive the business improvement we expect in the second half of fiscal 2007. I am confident that we are focused on the correct initiatives, which I expect will enable us to end the year as a more disciplined organization with a much stronger balance sheet and a significantly reduced debt balance." Change in Accounting for Stock-Based Compensation Effective January January: see month. 29, 2006, the Company adopted Statement of Financial Accounting Standards ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") No. 123R, "Share-Based Payment." SFAS No. 123R, among other things, changes the way of accounting for forfeited for·feit n. 1. Something surrendered or subject to surrender as punishment for a crime, an offense, an error, or a breach of contract. 2. Games a. share-based awards. Under the new standard, the Company is required to estimate forfeitures at the time of the award grant, rather than account for them as they occur. The Company had been expensing share-based awards without estimating forfeitures, and reduced the expense recognized as forfeitures actually occurred. Accordingly, as of the adoption date, the Company is required to reduce its previously recognized expense for forfeitures on existing awards which have not yet vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) , which results in the reduction of previously recognized expense. The amount of this reduction is presented on the statement of operations See Income statement. as a cumulative effect of a change in accounting principle, net of tax. The cumulative adjustment increased first quarter 2007 earnings by $1.0 million, or $0.04 per diluted common share. Investors will have the opportunity to listen to the first quarter earnings conference call at 4:30 p.m. ET today. The call can be accessed via 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 through Streetevents at http://www.streetevents.com and on our website at http://www.joann.com (go to the top of our home page and click on "Jo-Ann Stores," click on "Our Company," click on "Investor Relations Investor relations The process by which the corporation communicates with its investors. ," then click on the Conference Call icon). To listen to the live call, please go to the website at least ten minutes before the call begins to register, and 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 shortly after the call. The replay may be accessed at http://www.joann.com and at http://www.streetevents.com or by phone at 800-642-1687, conference ID #7843531. Jo-Ann Stores, Inc. (http://www.joann.com), the leading national fabric and craft retailer with locations in 47 states, operates 662 Jo-Ann Fabrics and Crafts traditional stores and 164 Jo-Ann superstores. 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. Our actual results, performance or achievements may materially differ from those expressed or implied in the forward-looking statements. Risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, general economic conditions, changes in customer demand, changes in trends in the fabric and craft industry, seasonality, failure to manage new store growth and the store transition strategy, effective execution of the Repair Plan strategy, the availability of merchandise, changes in the competitive pricing for products, the impact of competitors' store openings and closings, longer-term unseasonable un·sea·son·a·ble adj. 1. Not suitable to or appropriate for the season. 2. Not characteristic of the time of year: unseasonable weather. 3. Poorly timed; inopportune. weather or wide spread severe weather, our inability to effectively manage our distribution network, our ability to recruit and retain highly qualified personnel, our ability to sell-through our inventory at acceptable prices, energy costs, increases in transportation costs, our indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and limits on attaining additional financing, failure to maintain the security of our electronic and other confidential information Noun 1. confidential information - an indication of potential opportunity; "he got a tip on the stock market"; "a good lead for a job" steer, tip, wind, hint, lead , failure to comply with various laws and regulations, consumer confidence and debt levels, and other capital market and geo-political conditions. Other important factors that may cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's Securities and Exchange Commission filings.
JO-ANN STORES, INC.
Consolidated Statements of Operations
(Unaudited)
---------------
Thirteen Weeks
Ended
---------------
April April
29, 30,
2006 2005
------- -------
(Dollars in millions, except per share data)
Net sales $424.7 $420.7
Cost of sales 226.7 215.9
------- -------
Gross margin 198.0 204.8
Selling, general and administrative expenses 189.7 180.6
Store pre-opening and closing costs 5.5 4.9
Depreciation and amortization 11.6 10.5
------- -------
Operating (loss) profit (8.8) 8.8
Interest expense, net 3.5 2.1
------- -------
(Loss) income before income taxes and cumulative
effect
of accounting change (12.3) 6.7
Income tax (benefit) provision (4.7) 2.5
------- -------
(Loss) income before cumulative effect of accounting
change (7.6) 4.2
Cumulative effect of accounting change, net of tax 1.0 --
------- -------
Net (loss) income $ (6.6) $ 4.2
======= =======
(Loss) income per common share - basic:
(Loss) income before cumulative effect of accounting
change $(0.32) $ 0.19
Net (loss) income (0.28) 0.19
(Loss) income per common share - diluted:
(Loss) income before cumulative effect of accounting
change $(0.32) $ 0.18
Net (loss) income (0.28) 0.18
Weighted average shares outstanding (in thousands):
Basic 23,316 22,479
======= =======
Diluted 23,316 23,208
======= =======
OTHER INFORMATION
Number of stores open at period end:
Traditional stores 663 724
Superstores 162 125
------- -------
825 849
======= =======
Square footage at period end (000's):
Traditional stores 9,785 10,559
Superstores 6,468 5,124
------- -------
16,253 15,683
======= =======
Average square footage per store:
Traditional stores 14,759 14,600
======= =======
Superstores 39,924 41,000
======= =======
JO-ANN STORES, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
---------------
April April January
29, 30, 28,
2006 2005 2006
------- ------- -------
(Dollars in millions)
Assets
Current assets:
Cash and cash equivalents $ 26.1 $ 43.2 $ 17.9
Inventories 463.0 446.4 514.7
Deferred income taxes 38.0 21.3 38.0
Prepaid expenses and other current assets 26.8 20.7 35.2
------- ------- -------
Total current assets 553.9 531.6 605.8
Property, equipment and leasehold
improvements, net 333.9 238.8 331.7
Goodwill, net -- 27.1 --
Other assets 10.2 11.4 9.3
------- ------- -------
Total assets $898.0 $808.9 $946.8
======= ======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $131.7 $153.2 $146.6
Accrued expenses 76.6 59.9 94.1
------- ------- -------
Total current liabilities 208.3 213.1 240.7
Long-term debt 190.0 100.0 203.7
Deferred income taxes 23.2 27.6 23.2
Lease obligations and other long-term
liabilities 82.4 49.8 79.8
Shareholders' equity 394.1 418.4 399.4
------- ------- -------
Total liabilities and shareholders' equity $898.0 $808.9 $946.8
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