EX-99 2 d30600exv99.htm PRESS RELEASE exv99
 

Exhibit 99
For Further Information Contact:
Elaine D. Crowley
Sr. Vice President, Chief Financial Officer
(817) 347-8200
BOMBAY ANNOUNCES THIRD QUARTER OPERATING RESULTS
FOR IMMEDIATE RELEASE — November 16, 2005
          FORT WORTH, TEXAS — The Bombay Company, Inc. (NYSE-BBA) reported that revenue for the three months ended October 29, 2005 increased 1.1% to $128.1 million compared to $126.7 million for the three months ended October 30, 2004. For the nine-month period, revenue increased 1.5% to $378.2 million compared to $372.7 million for the corresponding period of the prior year. Same store sales for Bombay stores in existence for more than one year increased 2.7% for the quarter and declined 0.4% for the year-to-date period.
     Net loss for the third quarter was $4.1 million or $0.11 per share compared to a net loss of $7.3 million or $0.20 per share for the corresponding period of the prior year. For the nine months ended October 29, 2005, the net loss was $21.5 million or $0.59 per share compared to a net loss of $19.4 million or $0.54 per share for the nine months ended October 30, 2004.
     James D. Carreker, Chairman and Chief Executive Officer, stated, “While we were pleased with the initial customer response to our new fall introductions and the rooms layout early in the quarter, we did not regain August’s sales momentum following the hurricanes. In order to create sales momentum, we became more promotional during the latter part of the quarter, which adversely affected our margins.
     “As part of our merchandise strategy, the focus has been on upgrading the assortment from a style and quality standpoint. The improved assortment has resulted in a significant increase in average unit retail prices, and we believe that this fall’s results have demonstrated the customers’ acceptance of the merchandise upgrade. We believe that our holiday assortment positions us well for the fourth quarter. As previously indicated, we expect holiday sales to come later and with more promotional activity than originally anticipated; however, we do not expect the same level of clearance markdowns as last year,” noted Mr. Carreker.
     Overall the average ticket increased 14% for the quarter while the number of transactions, including transactions from new stores, declined 8%. During the third quarter, revenue from the direct-to-customer channel, which includes Internet and mail order, declined $1.9 million compared to the corresponding period of the prior year. This represents an improving trend compared to the second quarter as the channel is beginning to respond to additional Internet marketing and improved functionality and appearance of the website. Revenue from Bailey Street Trading Company, the assets of which were sold during the second quarter of Fiscal 2005, were approximately $4.1 million during the third quarter last year.
     During the quarter, the Company completed the sale of its non-operating land and building adjacent to the Company-owned corporate headquarters in Fort Worth, Texas for $5.6 million, and recorded a $4.1 million pre-tax gain in connection with the transaction. Selling, general and administrative costs were $.9 million lower than last year. Corporate overhead costs were $1.0 million or 110 basis points below last year’s levels while marketing, including visual merchandising, costs were $0.3 million or 30 basis points lower than last year due in

 


 

part to a shift in the timing of the Christmas gift catalog from October to November. Expenses associated with the direct-to-customer channel are, in large part, variable and declined as a result of the lower revenue. These declines were partially offset by higher store four-wall costs, which increased $0.7 million or 30 basis points due to higher payroll expenses. Based on performance to date, the Company provided a benefit equal to 34.9% of the pre-tax loss for the nine months compared to a 35.3% benefit during the first half of the year.
     The Company ended the quarter with $176.3 million in inventory which is slightly higher than last year and in line with internal expectations. The increase is due primarily to better in-stock position and flow of KIDS merchandise, which was adversely impacted last year by issues surrounding imports of bedroom furniture from China. The Company has managed its inventory receipts such that it expects to end the year with inventory levels in line with its plan of $132 to $138 million.
     During the fourth quarter, the Company expects to open 11 stores, including four BombayKIDS stores, and close six to nine stores ending the year with approximately 497 to 500 stores including 60 BombayKIDS stores.
     Based upon the recent months’ trends, the Company now expects results for the fourth quarter of Fiscal 2005 to be in the range of $0.24 to $0.33 per share assuming a tax rate of approximately 35%.
     In conjunction with this release, you are invited to listen to Bombay’s conference call with management that will be conducted on Thursday, November 17, 2005 at 10:00 a.m. Central Time. The Company will review the third quarter results as well as the outlook for the remainder of Fiscal 2005. Interested parties should dial 212-676-5380 ten minutes prior to the start time. The call will also be broadcast live over the Internet at www.bombaycompany.com. For those who are unable to listen to the live broadcast, a telephone replay will be available for 72 hours beginning at 12:00 p.m. Central Time at 800-633-8284. The access code is 21226536. The call will also be available for replay for 45 days on the investor relations page of the Bombay website.
     The Bombay Company, Inc. designs, sources and markets a unique line of home accessories, wall décor and furniture through 494 retail outlets, specialty catalogs and the Internet in the U.S. and internationally.
     Any statements in this press release that may be considered forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of The Bombay Company, Inc. and its wholly-owned subsidiaries (the “Company” or “Bombay”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and financial market conditions which affect consumer confidence in the spending environment for home-related purchases; competition; seasonality; success of operating initiatives; new product development and introduction schedules; uninterrupted flow of product; acceptance of new product offerings; inherent safety of product offerings; advertising and promotional efforts; adverse publicity; expansion of the store chain; availability, locations and terms of sites for store development; ability to renew leases on an economic basis; changes in business strategy or development plans including risks associated with the strategy to move stores off-mall; availability and terms of borrowings or capital for operating purposes; labor and employee benefit costs; ability to obtain insurance at a reasonable cost; rising fuel and energy costs and their impact on the operations of the business; reliance on technology; security of the technological infrastructure; changes in government or trade regulations including duties on bedroom furniture imports from China and the possibility that the scope of such duties will be expanded to encompass additional countries or product categories; risks associated with international business; fluctuations in foreign currency exchange rates; terrorism; war or threat of war; potential travel or import/export restrictions due to communicable diseases; regional weather conditions; hiring and retention of adequate and qualified personnel and other risks and uncertainties contained in the Company’s 2004 Annual Report on Form 10-K and other SEC filings as they occur. The Company undertakes no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof as a result of new information, future events or otherwise.
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THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
                                 
    Three Months Ended     Nine Months Ended  
    October 29,     October 30,     October 29,     October 30,  
    2005     2004     2005     2004  
            (restated)             (restated)  
 
                               
Net revenue
  $ 128,062     $ 126,669     $ 378,220     $ 372,729  
Costs and expenses:
                               
Cost of sales, buying and store occupancy costs
    96,504       94,922       294,205       283,624  
Selling, general & administrative expenses
    40,895       41,805       119,931       118,674  
 
                       
Operating loss
    (9,337 )     (10,058 )     (35,916 )     (29,569 )
Gain on sale of assets
    4,130             4,690        
Interest expense, net
    (970 )     (318 )     (1,800 )     (283 )
 
                       
Loss before income taxes
    (6,177 )     (10,376 )     (33,026 )     (29,852 )
Income tax benefit
    (2,048 )     (3,048 )     (11,526 )     (10,449 )
 
                       
Net loss
    ($4,129 )     ($7,328 )     ($21,500 )     ($19,403 )
 
                       
 
                               
Net loss per basic & diluted share
    ($0.11 )     ($0.20 )     ($0.59 )     ($0.54 )
 
                       
 
                               
Avg. common shares outstanding
    36,336       35,831       36,165       35,644  
 
                       
 
                               
Avg. common shares outstanding and dilutive potential common shares
    36,336       35,831       36,165       35,644  
 
                       
 
                               
Other Selected Financial and Operating Data
                               
Capital expenditures
  $ 5,068     $ 12,533     $ 16,347     $ 26,815  
Depreciation and amortization
  $ 4,833     $ 4,201     $ 14,016     $ 13,042  
 
                               
Stores opened
    8       28       30       47  
Stores closed
    9       7       38       25  
 
                               
Store composition:
                               
Bombay core
    388       399                  
Outlet
    48       47                  
KIDS
    58       47                  
 
                           
Total
    494       493                  
 
                           
 
                               
Total Combination format stores
    54       43                  

 


 

THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
                 
    October 29,     October 30,  
    2005     2004  
            (restated)  
ASSETS
               
 
               
Current assets:
               
Cash and short-term investments
  $ 7,688     $ 15,053  
Inventories
    176,302       171,744  
Other current assets
    32,521       30,798  
 
           
 
               
Total current assets
    216,511       217,595  
Property and equipment, net
    95,120       87,619  
Goodwill, net
    423       423  
Other assets
    14,914       10,698  
 
           
 
               
TOTAL ASSETS
  $ 326,968     $ 316,335  
 
           
 
               
LIABILITIES & STOCKHOLDERS’ EQUITY
               
 
               
Current liabilities:
               
Notes payable to banks
  $ 62,218     $ 51,490  
Accounts payable and accrued expenses
    43,965       45,063  
Gift certificates redeemable
    8,042       6,507  
Accrued payroll and bonuses
    3,134       2,660  
Accrued insurance
    4,997       4,150  
 
           
 
               
Total current liabilities
    122,356       109,870  
 
           
 
               
Accrued rent and other liabilities
    41,367       31,966  
 
           
 
               
Stockholders’ equity:
               
Preferred stock
           
Common stock
    38,150       38,150  
Additional paid-in capital
    79,910       79,835  
Retained earnings
    52,237       66,539  
Accumulated other comprehensive income
    1,676       1,182  
Treasury stock
    (7,338 )     (9,404 )
Deferred compensation
    (1,390 )     (1,803 )
 
           
 
               
Total stockholders’ equity
    163,245       174,499  
 
           
 
               
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY
  $ 326,968     $ 316,335