EX-99.1 2 v053553_ex99-1.htm Unassociated Document
 
 
 

NEWS RELEASE


DRESS BARN, INC. REPORTS RECORD FOURTH QUARTER AND FISCAL YEAR 2006 RESULTS

-- 4Q ‘06 Comparable Sales Increase 7% --
-- 4Q ‘06 Earnings Per Share $0.35 --
-- Fiscal ’06 Comparable Sales Increase 8% --
-- Fiscal ’06 Earnings Increase To $79 Million Or $1.15 Per Share --
-- Reaffirms Fiscal ’07 Earnings Per Share Guidance --

SUFFERN, NY - SEPTEMBER 26, 2006 - Dress Barn, Inc. (NASDAQ - DBRN) today reported sales and earnings results for the fourth quarter and fiscal year ended July 29, 2006.

Fourth Quarter Results

Net sales for the thirteen-week period ended July 29, 2006 increased 12% to a record level of $343.3 million compared to last year’s $307.1 million. Comparable store sales for the fiscal fourth quarter increased 7%, driven by a 12% increase for the Company’s dressbarn stores, and offset by a 3% decrease for the Company’s maurices stores.

Net earnings for the fiscal fourth quarter ended July 29, 2006 were $24.4 million, or $0.35 per diluted share. While this is less than the prior year’s reported $33.6 million, or $0.54 per diluted share, the year-ago quarter’s results include the favorable pre-tax impact of $37.7 million, or $0.32 per diluted share, primarily related to a litigation reserve reversal. Excluding this impact, last year’s earnings per diluted share would have been $0.22; this year’s earnings per diluted share of $0.35 represents a 59% increase versus last year.
 
2006 Fiscal Year Results

Net sales for the fiscal year ended July 29, 2006 increased to a record level of $1.3 billion, a 30% increase over the previous fiscal year’s level of approximately $1.0 billion. Comparable store sales increased 8% for this period, driven primarily by a 10% increase for dressbarn, while maurices increased 5%. The current full year financial results were also driven by the inclusion of a full year sales contribution from maurices compared to seven months in the prior year.

Net earnings for the fiscal year ended July 29, 2006 increased to a record level of $79.0 million, or $1.15 per diluted share. This compares to a reported $52.6 million, or $0.86 per diluted share in the prior year. Once again, primarily excluding the litigation reserve reversal discussed above, earnings per diluted share increased 95% to $1.15 per diluted share versus earnings per diluted share of $0.59 for the prior fiscal year.
 
 
 
 


David R. Jaffe, President and Chief Executive Officer of Dress Barn, Inc. commented, “We are pleased to have finished the year with a strong quarter. Our dressbarn concept continued to hit the mark and ended the quarter with a lean, focused assortment and very little exposure to clearance. In addition to ensuring strong margins, this reinforces our brand position and competitive stance. At the same time, our current sales trend in maurices, particularly in our bottoms business has improved nicely. We expect a successful conclusion to the back-to-school selling season and are excited about our prospects for the holiday season.”

Mr. Jaffe continued, “Fiscal 2006 was an exceptional year for our Company. Importantly, we are pleased with the very successful integration of maurices and it is now well positioned for store growth. maurices provides us with both significant diversification and a second growth vehicle. Additionally, we continued to execute our dressbarn operations at a very high level. We have improved our merchandise, reinforced our brand position, and continued to make gains in both sales and in productivity. We are proud to have driven significant shareholder value with the powerful combination of these two initiatives.”

Reaffirms Fiscal July, 2007 Earnings Guidance

For the fiscal year ending July 28, 2007, the Company reaffirms its previously estimated earnings per diluted share guidance in the range of $1.25 to $1.30, which represents a 9% to 13% increase over actual per diluted share earnings of $1.15 for fiscal 2006. This estimate is based upon certain key assumptions previously announced.

Conference Call Information

The Company will conduct a conference call today, September 26, 2006 at 4:30 p.m. Eastern Time to review its fiscal year end and fourth quarter financial results. Parties interested in participating in the conference call may dial-in at (617) 614-3450, the passcode is 52094398. The conference call will also be simultaneously broadcast at www.dressbarn.com. A recording of the conference call will be available until October 10, 2006 by dialing (617) 801-6888, the passcode is 64292012.

About Dress Barn, Inc.
Dress Barn, Inc. (NASDAQ - DBRN), is a leading national specialty apparel retailer offering quality career and casual fashion apparel through its dressbarn and maurices brands. As of August 26, 2006, the Company operated 799 dressbarn stores in 45 states and 548 maurices stores in 40 states. For more information, please visit www.dressbarn.com and www.maurices.com.

Forward-Looking Statements
Certain statements made in this press release are not historical in nature and are “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The Company does not undertake to publicly update or review its forward-looking statements even if experience or future changes make it clear that our projected results expressed or implied will not be achieved. Detailed information concerning a number of factors that could cause actual results to differ materially from the information contained herein is readily available on our most recent report on Form 10-K for the year ended July 30, 2005 and Form 10-Q for the quarter ended April 29, 2006.
The conference call will be recorded on behalf of Dress Barn, Inc. and consists of copyrighted material. It may not be re-recorded, re-produced, transmitted or re-broadcast, in whole or in part, without the Company’s express written permission. Accessing the call or the rebroadcast represents consent to these terms and conditions. Participation in the call serves as consent to having any comments or statements made appear on any transcript, broadcast or rebroadcast of this call.

CONTACT:
Dress Barn, Inc.
Investor Relations
(845) 369-4600
 
 
 
 
 


Dress Barn, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings - Unaudited
Dollars in thousands except per share amounts
 
   
Thirteen Weeks Ended
  
Fifty-Two Weeks Ended
  
   
July 29,
  
 
  
July 30,
      
July 29,
  
 
  
July 30,
  
 
  
   
2006
      
2005
      
2006
      
2005
      
                                   
Net sales
  
$
343,305
    
100.0
%
$
307,052
    
100.0
%
$
1,300,277
    
100.0
%
$
1,000,264
    
100.0
%
Cost of sales, including
                                                 
occupancy and buying costs
    
199,911
   
58.2
%
  
187,722
   
61.1
%
  
773,631
   
59.5
%
  
621,656
    
62.1
%
Gross profit
    
143,394
    
41.8
%
  
119,330
   
38.9
%
  
526,646
    
40.5
%
  
378,608
   
37.9
%
Selling, general and
                                                 
administrative expenses
    
94,417
    
27.5
%
  
86,414
   
28.1
%
  
353,031
    
27.2
%
  
286,751
   
28.7
%
Depreciation expense
    
10,827
    
3.2
%
  
10,549
   
3.4
%
  
41,679
    
3.2
%
  
34,457
    
3.4
%
Litigation charge
    
-
    
0.0
%
  
(37,726
)
  
(12.3
%)
  
-
    
0.0
%
  
(35,329
)
  
(3.5
%)
Operating income
   
38,150
   
11.1
%
  
60,093
   
19.6
%
  
131,936
   
10.1
%
  
92,729
   
9.3
%
                                                   
Interest income
    
1,228
   
0.4
%
  
585
   
0.2
%
  
2,656
   
0.2
%
  
1,735
   
0.2
%
Interest expense
    
(1,206
)
  
(0.4
%)
  
(5,527
)
  
(1.8
%)
  
(5,364
)
  
(0.4
%)
  
(10,230
)
  
(1.0
%)
Other income
    
382
   
0.1
%
  
382
   
0.1
%
  
1,526
   
0.1
%
  
1,526
   
0.2
%
Earnings before income taxes
    
38,554
   
11.2
%
  
55,533
   
18.1
%
  
130,754
   
10.1
%
  
85,760
   
8.6
%
Income taxes
    
14,111
   
4.1
%
  
21,952
    
7.1
%
  
51,800
   
4.0
%
  
33,200
    
3.3
%
Net earnings
 
$
24,443
    
7.1
%
$
33,581
    
10.9
%
$
78,954
    
6.1
%
$
52,560
    
5.3
%
Earnings per share:
                                                  
Basic:
  
$
0.40
        
$
0.56
        
$
1.29
        
$
0.88
        
Diluted:
  
$
0.35
        
$
0.54
        
$
1.15
        
$
0.86
        
Average shares outstanding:
                                                  
Basic:
    
61,653
         
60,054
         
61,216
         
59,570
       
Diluted:
    
70,454
         
62,047
         
68,728
         
61,158
       


Note: All prior period share and per share amounts have been adjusted to reflect a two-for-one split of the Company’s common stock effective April 3, 2006 that was in the form of a 100 percent stock dividend.
 
 
 
 

Dress Barn, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets - Unaudited
Dollars in thousands
 
   
July 29,
  
July 30,
  
ASSETS
  
2006
  
2005
  
Current Assets:
          
Cash, cash equivalents, and marketable securities
  
$
153,743
  
$
42,619
  
Merchandise inventories
    
170,487
   
167,643
 
Deferred taxes
    
6,459
    
-
  
Prepaid expenses and other
    
19,547
   
12,923
 
Total Current Assets
    
350,236
   
223,185
 
Property and equipment, net
    
238,065
    
232,698
  
Intangible Assets, net
    
110,199
   
111,243
 
Goodwill
    
132,566
   
132,566
 
Other Assets
    
16,667
   
16,553
 
TOTAL ASSETS
  
$
847,733
  
$
716,245
  
               
LIABILITIES AND SHAREHOLDERS' EQUITY
              
Current Liabilities:
              
Accounts payable-trade
  
$
121,198
  
$
107,702
  
Accrued salaries, wages and related expenses
    
43,911
   
35,209
 
Other accrued expenses
    
38,557
   
35,237
 
Customer credits
    
16,260
   
12,849
 
Income taxes payable
    
11,453
    
92
  
Deferred tax liability
    
-
    
3,612
  
Current portion of long-term debt
    
1,148
   
1,089
 
Total Current Liabilities
    
232,527
   
195,790
 
Long-Term Debt
    
144,751
   
155,900
 
Deferred Rent and Other
    
51,231
   
44,194
 
Deferred Tax Liability
    
10,077
    
7,233
  
               
Shareholders' Equity
    
409,147
    
313,128
  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  
$
847,733
  
$
716,245