EX-99.1 3 y91986exv99w1.txt PRESS RELEASE Exhibit 99.1 AEROPOSTALE REPORTS STRONG THIRD QUARTER RESULTS ---Earnings Per Share of $0.56, an increase of 44% Versus Prior Year--- ---Revenues Increase 30% Versus Prior Year--- ---Announces $35 million Share Repurchase Program--- NEW YORK, NEW YORK, NOVEMBER 20, 2003 --- Aeropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of active and casual apparel for the teen market, today reported results for the fiscal third quarter ended November 1, 2003. Net income for the quarter ended November 1, 2003 was $21.9 million or $0.56 per diluted share, in line with consensus and slightly ahead of the company's most recent guidance. This compares to $15.0 million or $0.39 per diluted share in the comparable quarter in the prior year. Net sales for the quarter increased 30.1% to $220.1 million versus $169.2 million in the comparable period. Comparable sales for the third quarter of fiscal 2003 increased 5.2% compared to an increase of 5.0% in the prior year. Julian R. Geiger, Chairman and Chief Executive Officer, said, "Our solid results for the quarter were driven by stronger than planned performances by new stores, improved merchandise margins throughout the quarter and an excellent response to our planned promotions. We are optimistic about the prospects for the upcoming holiday season and believe that our merchandise assortment is focused and trend right." Also today, the company announced that its board of directors has authorized a $35 million share repurchase program. The company noted that based upon current and projected cash flows, the share purchase program is an excellent means to return additional value to its shareholders while investing in the growth opportunities that lie ahead. The company also today commented that it was comfortable with the current First Call earnings estimate consensus of $0.65 for the fourth quarter. Mr. Geiger concluded, "Our momentum is good, our inventories are clean and we are well positioned for the holiday selling period. We believe that the combination of a strong brand, proprietary merchandise and a flexible operating model will allow us to continue to capture market share. We continue to be confident about the transportability of our brand and our ability to penetrate new markets successfully." 1 The Company will be holding a conference call today at 4:15 P.M. to review its fiscal 2003 third quarter results. The broadcast will be available through the 'Investor Relations' link at www.aeropostale.com and at www.companyboardroom.com. To listen to the broadcast, your computer must have Windows Media Player installed. If you do not have Windows Media Player, go to the latter site prior to the call, where you can download the software for free. ABOUT AEROPOSTALE, INC. Aeropostale, Inc. (www.aeropostale.com) is a mall-based specialty retailer of casual apparel and accessories that targets both young women and young men aged 11 to 20. The company provides customers with a selection of high-quality, active-oriented, fashion basic merchandise in a high-energy store environment. The company maintains complete control over the proprietary brand by designing and sourcing all of its own merchandise. Aeropostale products can be purchased only in its stores, which sell Aeropostale merchandise exclusively. The first Aeropostale store was opened in 1987. The company currently operates 460 stores in 41 states. SPECIAL NOTE: SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve certain risks and uncertainties, including statements regarding the company's strategic direction, prospects and future results. Certain factors, including factors outside of our control, may cause actual results to differ materially from those contained in the forward-looking statements. These factors include the company's ability to implement its growth strategy successfully, changes in consumer fashion preferences, economic and other conditions in the markets in which we operate, competition, seasonality and the other risks discussed in the company's prospectus dated July 28, 2003 filed with the Securities and Exchange Commission, which discussions are incorporated in this release by reference. 2 EXHIBIT A AEROPOSTALE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
NOVEMBER 1, FEBRUARY 1, NOVEMBER 2, 2003 2003 2002 ----------- ----------- ----------- (UNAUDITED) (1) (UNAUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents ..................... $ 78,529 $ 87,475 $ 11,366 Merchandise inventory ......................... 113,447 46,645 99,484 Other current assets .......................... 17,630 10,669 16,102 ----------- ----------- ----------- Total current assets ....................... 209,606 144,789 126,952 FIXTURES, EQUIPMENT AND IMPROVEMENTS-- Net 92,326 69,448 70,257 OTHER ASSETS .................................... 9,528 8,795 8,492 ----------- ----------- ----------- TOTAL ASSETS .......................... $ 311,460 $ 223,032 $ 205,701 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Revolving credit facility ..................... $ -- $ -- $ 1,857 Accounts payable .............................. 54,350 17,954 26,063 Accrued expenses .............................. 35,816 40,044 30,447 ----------- ----------- ----------- Total current liabilities .................. 90,166 57,998 58,367 OTHER NONCURRENT LIABILITIES .................... 49,109 37,075 37,391 I. COMMITMENT AND CONTINGENCIES STOCKHOLDERS' EQUITY: Common stock-- par value, $0.01 per share; 200,000 shares authorized, 37,374, 35,306 and ... 374 353 351 35,160 shares issued and outstanding Additional paid-in capital .................... 59,130 41,657 41,318 Retained earnings ............................. 112,681 85,949 68,274 ----------- ----------- ----------- Total stockholders' equity ................. 172,185 127,959 109,943 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 311,460 $ 223,032 $ 205,701 =========== =========== ===========
Note (1) Balance sheet derived from audited consolidated financial statements 3 EXHIBIT B AEROPOSTALE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SELECTED FINANCIAL DATA (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AND STORE DATA)
13 WEEKS ENDED 13 WEEKS ENDED NOVEMBER 1, 2003 NOVEMBER 2, 2002 ----------------------------- ---------------------------- % OF SALES % OF SALES NET SALES ........................................ $ 220,071 100.0% $ 169,210 100.0% COST OF SALES .................................... 146,149 66.4 118,308 69.9 --------- ----- --------- ----- GROSS PROFIT ..................................... 73,922 33.6 50,902 30.1 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 38,123 17.3 25,774 15.2 --------- ----- --------- ----- INCOME FROM OPERATIONS ........................... 35,799 16.3 25,128 14.9 INTEREST (INCOME) EXPENSE -- Net ................. (65) -- 126 0.1 --------- ----- --------- ----- INCOME BEFORE INCOME TAXES ....................... 35,864 16.3 25,002 14.8 PROVISION FOR INCOME TAXES ....................... 13,986 6.4 10,001 5.9 --------- ----- --------- ----- NET INCOME ....................................... $ 21,878 9.9% $ 15,001 8.9% ========= ========= BASIC NET INCOME PER COMMON SHARE $ 0.59 $ 0.43 ========= ========= DILUTED NET INCOME PER COMMON SHARE $ 0.56 $ 0.39 ========= ========= Basic weighted average shares outstanding 37,174 35,104 Diluted weighted average shares outstanding 39,169 38,396 STORE DATA: Comparable store sales 5.2% 5.0% Stores open at end of period 460 365 Total gross square footage at end of period 1,613,999 1,286,784
4 EXHIBIT C AEROPOSTALE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SELECTED FINANCIAL DATA (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AND STORE DATA)
39 WEEKS ENDED 39 WEEKS ENDED NOVEMBER 1, 2003 NOVEMBER 2, 2002 ---------------------------- -------------------------- % OF SALES % OF SALES NET SALES ........................................ $ 462,226 100.0% $ 344,481 100.0% COST OF SALES .................................... 322,472 69.8 245,336 71.2 --------- ----- --------- ----- GROSS PROFIT ..................................... 139,754 30.2 99,145 28.8 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 96,432 20.9 76,397 22.2 --------- ----- --------- ----- INCOME FROM OPERATIONS ........................... 43,322 9.4 22,748 6.6 INTEREST (INCOME) EXPENSE-- Net .................. (499) (0.1) 57 -- --------- ----- --------- ----- INCOME BEFORE INCOME TAXES ....................... 43,821 9.5 22,691 6.6 PROVISION FOR INCOME TAXES ....................... 17,089 3.7 9,076 2.6 --------- ----- --------- ----- NET INCOME ....................................... $ 26,732 5.8% $ 13,615 4.0% ========= ======== BASIC NET INCOME PER COMMON SHARE $ 0.74 $ 0.39 ========= ======== DILUTED NET INCOME PER COMMON SHARE $ 0.69 $ 0.35 ========= ======== Basic weighted average shares outstanding 36,208 34,108 Diluted weighted average shares outstanding 38,801 37,661 STORE DATA: Comparable store sales 5.4% 10.8% Stores open at end of period 460 365 Total gross square footage at end of period 1,613,999 1,286,784
5 EXHIBIT D: The following adjusted condensed consolidated statements of income for the 39 weeks ended November 2, 2002 exclude equity based compensation of $4.5 million. (B) ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) 39 WEEKS ENDED --------------------------- NOVEMBER 1, NOVEMBER 2, 2003 2002 -------- -------- NET INCOME .................................. $ 26,732 $ 13,615 Equity based compensation ................... -- 4,473 Income tax effect (a) ....................... -- (1,789) -------- -------- ADJUSTED NET INCOME ......................... $ 26,732 $ 16,299 ======== ======== ADJUSTED NET INCOME PER SHARE ............... $ 0.69 $ 0.42 ======== ======== (A) ASSUMES A TAX RATE OF 40% 6