The Neiman Marcus Group Reports Fourth Quarter and Fiscal Year Earnings; Fourth Quarter Earnings Growth of 35%.Business Editors DALLAS--(BUSINESS WIRE)--Sept. 9, 2003 The Neiman Marcus Neiman Marcus U.S. department-store chain. It was founded in Dallas, Texas, in 1907 by Herbert Marcus, his sister Carrie Marcus Neiman, and her husband, A.L. Neiman. Group, Inc. (NYSE NYSE See: New York Stock Exchange :NMG NmG No More Gas (Myers Motors electric vehicle) NMG Navy Metrication Group NMG Nuera Media Gateway NMG Network Media Gateway NMG Network Management Gateway NMG Network Measurement Group .A)(NYSE:NMG.B) today reported financial results for the fourth quarter and fiscal year 2003. The fiscal year 2003 fourth quarter and fiscal year 2003 amounts are reported on a thirteen and fifty-two Adj. 1. fifty-two - being two more than fifty 52, lii cardinal - being or denoting a numerical quantity but not order; "cardinal numbers" week basis, respectively. The Company's fiscal year 2002 included a fifty-third week. Unless otherwise stated, the fiscal year 2002 fourth quarter and fiscal year 2002 amounts are reported on a fourteen and fifty-three week basis, respectively. For the fourth quarter of fiscal year 2003, the Company reported total revenues of $703 million compared to $666 million in the prior year. Net earnings were $7 million, or $0.15 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, in the fourth quarter of fiscal year 2003 compared to $5 million, or $0.11 per diluted share, in the fourth quarter of fiscal year 2002, which is an increase of 35 percent. Excluding the impact of certain items as described below, adjusted earnings for the fourth quarter of fiscal year 2002 were $6 million, or $0.13 per diluted share. See the "Reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Net Earnings to Non-GAAP Adjusted Earnings" table below for the reconciliation of adjusted earnings and the Company's statements regarding the use of this non-GAAP financial measure. For fiscal year 2003, total revenues increased 5.1 percent to $3.10 billion compared to $2.95 billion in the prior year. Net earnings for fiscal year 2003 were $109 million, or $2.29 per diluted share, compared to $100 million, or $2.08 per diluted share, for fiscal year 2002, which represents an increase of 9.8 percent. Adjusted earnings for fiscal year 2003 were $124 million, or $2.60 per diluted share, compared to $97 million, or $2.02 per diluted share, for the prior year, which is an increase of 28 percent. Adjusted earnings for fiscal year 2003 and 2002 exclude the impact of certain items as described below. "Overall, I am very pleased with our fiscal year 2003 results," said Burton Burton can mean: Places Australia
Mr. Tansky continued, "In the last few months, we have seen an improvement in the retail environment. While these recent trends are encouraging, we remain committed to improving the operational efficiencies of our business. The initiatives we began in fiscal 2003, combined with our 2004 plans, position us to benefit in an improving economy." Based on the current sales trends, the Company anticipates its comparable store revenues for the first quarter of fiscal year 2004 to increase in the mid-single digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. range. Business Segments During the fourth quarter of fiscal year 2002, the Company realigned its business segments to reflect its current operating strategies. All of the Company's online operations are now included in the Direct Marketing segment. Previously, certain online operations were included in the Other business segment. The Company's principal business segments are Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Retail Stores and Direct Marketing. All prior amounts have been restated based on this new alignment Alignment is the adjustment of an object in relation with other objects, or a static orientation of some object or set of objects in relation to others.
Fourth quarter revenues for the Specialty Retail Stores segment, which consists of Neiman Marcus Stores and Bergdorf Goodman Bergdorf Goodman is a major, world-renowned luxury goods department store based in Midtown, Manhattan in New York City. It is owned by Neiman Marcus. History Beginnings , were $576 million compared to $553 million in the previous year. Revenues for the fourth quarter of fiscal year 2003 compared to last year increased 3.7 percent and 8.1 percent at Neiman Marcus Stores and Bergdorf Goodman, respectively. Total revenues for the Company's fifty-third week of fiscal year 2002 were $37 million. On a thirteen-week basis, comparable store revenues increased 5.2 percent at Neiman Marcus Stores and 16.2 percent at Bergdorf Goodman. Fourth quarter operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the Specialty Retail Stores segment were $12 million compared to $14 million in the prior year. Neiman Marcus Direct, the Company's direct marketing division, reported fourth quarter fiscal year 2003 revenues of $105 million compared to $96 million in the previous year. Operating earnings for Neiman Marcus Direct were $10 million in the fourth quarter compared to $7 million a year ago. The Company's Other segment includes the operations of the Kate n. 1. (Zool.) The brambling finch. Spade and Laura Mercier Laura Mercier is a French make-up artist who has lent her name to a line of cosmetics. History Raised in Provence, Laura Mercier began her training at age 17 when she entered painting school in Paris. brands and corporate expenses. Other Items In the first quarter of fiscal year 2003, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ." Based upon the valuation results of its third party appraisal experts, the Company recorded a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $24 million in the first quarter of fiscal year 2003 as a result of implementing the fair value model of the new accounting standard. During the fourth quarter of fiscal 2002, the Company wrote-down the carrying values Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → of three Kate Spade retail stores to their estimated fair value. The write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. resulted in a pretax charge of $3 million. During the third quarter of fiscal year 2002, the Company terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: its prior vacation VACATION. That period of time between the end of one term and beginning of another. During vacation, rules and orders are made in such cases as are urgent, by a judge at his chambers. plan. Under the previous plan, eligible employees received an annual vacation grant at the beginning of each service year. Pursuant to the new vacation policy, eligible employees earn vacation pay ratably over the course of the year in which services are rendered. As a result of this change, the Company's previously recorded $17 million vacation accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. was no longer required and, therefore, the liability was eliminated and credited to operating results. Also in the third quarter of fiscal 2002, the Company recorded an $8 million pretax charge. This charge related to 1) the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of the net carrying value of the Company's investment in WeddingChannel.com, an 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 bridal registry A bridal registry is a system designed by department stores for the purpose of allowing an engaged couple to manage the purchase of gifts for their wedding. From what is available at the store, the couple creates a list of items that they would like to receive, then the list is service, 2) the write-down of the carrying values of the fixed assets of the two Neiman Marcus Galleries stores to estimated fair value and 3) the accrual of the estimated loss associated with the abandonment abandonment, in law, voluntary, intentional, and absolute relinquishment of rights or property without conveying them to any other person. Abandonment also means willfully leaving one's spouse or children, intending not to return (see desertion). of excess warehouse space held by the Company pursuant to a 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. operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. . During the second quarter of fiscal year 2002, the Company incurred expenses of approximately $2 million in connection with cost reduction strategies. These expenses consisted primarily of severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs and lease termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. expenses incurred in connection with the closing of the Neiman Marcus Galleries store in Seattle, Washington  This page is protected from moves until disputes have been resolved on the .The reason for its protection is listed on the protection policy page. . A live webcast of the conference call on earnings can be accessed through the Investor Information section of the Neiman Marcus Group website at www.neimanmarcusgroup.com on Tuesday Tuesday: see week. , September September: see month. 9, 2003 beginning at 7:30 a.m. Central Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time. Following the live broadcast, interested parties may replay the webcast by accessing this website. To access financial information that will be presented during the call, please visit the Investor Information section of the Neiman Marcus Group website at www.neimanmarcusgroup.com. 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. , including statements regarding the Company's objectives and expectations concerning, among other things, its productivity and profitability; merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. and marketing strategies; inventory performance; store renovation and expansion plans; capital expenditures; liquidity; and development of management information systems. These forward-looking statements are made based on management's expectations and beliefs concerning future events, as well as on assumptions made by and data currently available to management. Therefore, these forward-looking statements involve a number of risks and uncertainties and are not guarantees of future performance. A variety of factors could cause the Company's actual results to differ materially from the anticipated or expected results expressed in these forward-looking statements. Factors that could affect future performance include, but are not limited to: current political and economic conditions; changes in political and economic conditions that may occur in the future; terrorist activities in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , as well as the potential escalation es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. in the international war on terrorism Terrorist acts and the threat of Terrorism have occupied the various law enforcement agencies in the U.S. government for many years. The Anti-Terrorism and Effective Death Penalty Act of 1996, as amended by the usa patriot act ; political, social, economic or other events resulting in the short or long-term disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. in business at the Company's stores, distribution centers or offices; changes in consumer confidence resulting in a reduction of discretionary spending on goods that are, or are perceived per·ceive tr.v. per·ceived, per·ceiv·ing, per·ceives 1. To become aware of directly through any of the senses, especially sight or hearing. 2. To achieve understanding of; apprehend. to be, "luxuries;" changes in demographic See demographics. or retail environments; changes in consumer preferences or fashion trends; competitive responses to the Company's marketing, merchandising and promotional efforts 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. inventory liquidations by vendors or other retailers; delays in the receipt of 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 ordered by the Company due to work stoppages and/or other causes of delay in connection with either the manufacture or shipment of such merchandise; seasonality of the retail business; adverse weather conditions, particularly during peak selling seasons; delays in anticipated store openings; natural disasters; significant increases in paper, printing and postage POSTAGE. The money charged by law for carrying letters, packets and documents by mail. By act of congress of March 3, 1851, Minot's Statute at Large, U. S. 587, it is enacted as follows: 2.-Sec. 1. costs; litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. that may have an adverse effect on the financial results or reputation of the Company; changes in the Company's relationships with designers, vendors and other sources of merchandise; the financial viability of the Company's designers, vendors and other sources of merchandise; changes in foreign currency exchange rates; impact of funding requirements related to the Company's noncontributory non·con·trib·u·to·ry adj. Of or relating to a pension plan in which participating members or employees are not required to support the plan with their own contributions. defined benefit pension plan; changes in the Company's relationships with certain of its key sales associates; changes in key management personnel; changes in the Company's proprietary credit card arrangement that adversely impact its ability to provide consumer credit; or changes in government or regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. increasing the Company's cost of operations. The Company undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statements to reflect subsequent events, new information or future circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
THE NEIMAN MARCUS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
August 2, August 3,
2003 2002
----------- -----------
ASSETS
------
Current assets:
Cash and cash equivalents $206,950 $178,638
Undivided interests in NMG Credit Card
Master Trust 243,145 208,602
Accounts receivable 22,595 19,778
Merchandise inventories 687,062 656,844
Other current assets 86,369 63,764
----------- -----------
Total current assets 1,246,121 1,127,626
----------- -----------
Property and equipment, net 674,185 653,166
Other assets 114,124 126,754
----------- -----------
Total assets $2,034,430 $1,907,546
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable and current maturities of
long-term liabilities $1,241 $1,098
Accounts payable 262,909 257,560
Accrued liabilities 266,259 259,800
----------- -----------
Total current liabilities 530,409 518,458
----------- -----------
Long-term liabilities:
Notes and debentures 249,733 249,710
Other long-term liabilities 108,234 77,473
----------- -----------
Total long-term liabilities 357,967 327,183
----------- -----------
Minority interest 8,206 6,592
Total shareholders' equity 1,137,848 1,055,313
----------- -----------
Total liabilities and shareholders' equity $2,034,430 $1,907,546
=========== ===========
THE NEIMAN MARCUS GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Fourth Quarter Fiscal Year
Ended Ended
------------------- -----------------------
(in thousands, except per August 2, August 3, August 2, August 3,
share data) 2003 2002 2003 2002
--------- --------- ----------- -----------
Revenues $702,656 $666,356 $3,098,124 $2,948,332
Cost of goods sold
including buying and
occupancy costs 501,357 474,310 2,073,579 1,997,378
Selling, general and
administrative expenses 184,670 178,865 802,435 776,647
Effect of change in
vacation policy -- -- -- (16,576)
Impairment and other
charges (1) -- 3,070 -- 13,233
--------- --------- ----------- -----------
Operating earnings 16,629 10,111 222,110 177,650
Interest expense, net 4,087 3,246 16,270 15,406
--------- --------- ----------- -----------
Earnings before income
taxes, minority interest
and change in accounting
principle 12,542 6,865 205,840 162,244
Income taxes 4,828 2,609 79,248 61,653
--------- --------- ----------- -----------
Earnings before minority
interest and change in
accounting principle 7,714 4,256 126,592 100,591
Minority interest in net
earnings of subsidiaries (542) 1,060 (2,488) (1,017)
--------- --------- ----------- -----------
Earnings before change in
accounting principle 7,172 5,316 124,104 99,574
Change in accounting
principle -- write-down
of intangible assets, net
of taxes -- -- (14,801) --
--------- --------- ----------- -----------
Net earnings $7,172 $5,316 $109,303 $99,574
========= ========= =========== ===========
Weighted average number of
common and common
equivalent shares
outstanding:
Basic 47,355 47,692 47,462 47,444
========= ========= =========== ===========
Diluted 47,862 48,129 47,795 47,835
========= ========= =========== ===========
Basic earnings per share:
Earnings before effect
of change in
accounting principle $0.15 $0.11 $2.61 $2.10
Change in accounting
principle -- -- (0.31) --
--------- --------- ----------- -----------
Basic earnings per
share $0.15 $0.11 $2.30 $2.10
========= ========= =========== ===========
Diluted earnings per
share:
Earnings before
effect of change in
accounting principle $0.15 $0.11 $2.60 $2.08
Change in accounting
principle -- -- (0.31) --
--------- --------- ----------- -----------
Diluted earnings per
share $0.15 $0.11 $2.29 $2.08
========= ========= =========== ===========
(1) Impairment and other charges for the fiscal year ended August
3, 2002 include: severance costs and lease termination
expenses incurred in connection with the closing of the Neiman
Marcus Galleries store in Seattle recorded in the second
fiscal quarter; the following impairment and other charges
recorded in the third fiscal quarter: a) the write-off of the
net carrying value of the Company's investment in
WeddingChannel.com, an Internet bridal registry service, b)
the write-down of the carrying values of the fixed assets of
the two Neiman Marcus Galleries stores to estimated fair value
and c) the accrual of the estimated loss associated with the
abandonment of excess warehouse space held by the Company
pursuant to a long-term operating lease; and the write-down of
the carrying values of the fixed assets of three Kate Spade
retail stores to their estimated fair value recorded in the
fourth fiscal quarter.
THE NEIMAN MARCUS GROUP, INC.
OTHER OPERATING DATA
(UNAUDITED)
SEGMENTS: Fourth Quarter Ended Fiscal Year Ended
-------------------- -------------------
August 2, August 3, August 2, August 3,
(in millions) 2003 2002 2003 2002
---------- --------- --------- ---------
REVENUES:
Specialty Retail Stores $576.3 $553.2 $2,524.8 $2,433.2
Direct Marketing 105.1 96.1 493.5 444.0
Other (1) 21.3 17.1 79.8 71.1
---------- --------- --------- ---------
Total $702.7 $666.4 $3,098.1 $2,948.3
========== ========= ========= =========
OPERATING EARNINGS:
Specialty Retail Stores $12.2 $14.0 $198.2 $170.5
Direct Marketing 10.0 6.5 45.8 22.8
Other (1) (5.6) (7.3) (21.9) (19.0)
Effect of change in vacation
policy -- -- -- 16.6
Impairment and other charges -- (3.1) -- (13.2)
---------- --------- --------- ---------
Total $16.6 $10.1 $222.1 $177.7
========== ========= ========= =========
OTHER DATA: Fourth Quarter Ended Fiscal Year Ended
-------------------- -------------------
August 2, August 3, August 2, August 3,
(in millions) 2003 2002 2003 2002
---------- --------- --------- ---------
Capital Expenditures $19 $27 $100 $149
Depreciation and Amortization 21 18 79 82
(1) Other includes the results of operations of Kate Spade LLC,
Gurwitch Products, LLC and corporate expenses. All of the
Company's online operations are now included in the Direct
Marketing segment. Previously, certain online operations were
included in the Other business segment. Prior year amounts
have been reclassified to conform to the current year
presentation.
THE NEIMAN MARCUS GROUP, INC.
RECONCILIATION OF GAAP NET EARNINGS TO NON-GAAP ADJUSTED EARNINGS
(UNAUDITED)
Fourth Quarter Ended Fiscal Year Ended
-------------------- -------------------
(in thousands, except per August 2, August 3, August 2, August 3,
share data) 2003 2002 2003 2002
---------- --------- --------- ---------
Net earnings (GAAP) $7,172 $5,316 $109,303 $99,574
Effect of change in
vacation policy, net of
taxes -- -- -- (10,277)
Impairment and other
charges, net of taxes (1) -- 1,066 -- 7,368
Change in accounting
principle -- -- 14,801 --
---------- --------- --------- ---------
Adjusted earnings (Non-GAAP) $7,172 $6,382 $124,104 $96,665
========== ========= ========= =========
Diluted earnings per share
(GAAP) $0.15 $0.11 $2.29 $2.08
Effect of change in
vacation policy, net of
taxes -- -- -- (0.21)
Impairment and other
charges, net of taxes (1) -- 0.02 -- 0.15
Change in accounting
principle -- -- 0.31 --
---------- --------- --------- ---------
Adjusted earnings per share
(Non-GAAP) $0.15 $0.13 $2.60 $2.02
========== ========= ========= =========
The Neiman Marcus Group, Inc. believes reporting adjusted earnings
is a more accurate representation of the Company's on-going economic
performance and therefore uses adjusted reporting internally to
evaluate and manage the Company's operations. The Neiman Marcus Group,
Inc. has chosen to provide this information to investors to enable
them to perform more meaningful comparisons of operating results and
as a means to emphasize the results of on-going operations. Adjusted
earnings should be considered in addition to, not as a substitute for,
the Company's other measures of financial performance reported in
accordance with generally accepted accounting principles.
(1) Impairment and other charges for the fiscal year ended August
3, 2002 include: severance costs and lease termination
expenses incurred in connection with the closing of the Neiman
Marcus Galleries store in Seattle recorded in the second
fiscal quarter; the following impairment and other charges
recorded in the third fiscal quarter: a) the write-off of the
net carrying value of the Company's investment in the
WeddingChannel.com, an Internet bridal registry service, b)
the write-down of the carrying values of the fixed assets of
the two Neiman Marcus Galleries stores to estimated fair value
and c) the accrual of the estimated loss associated with the
abandonment of the excess warehouse space held by the Company
pursuant to a long-term operating lease; and the write-down of
the carrying values of the fixed assets of three Kate Spade
retail stores to their estimated fair value recorded in the
fourth fiscal quarter.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion