SHRP Sharper Image Corp (MM)

Sharper Image Corporation (NASDAQ:SHRP) today reported its operating results for the third quarter ended October 31, 2007. For the third quarter ended October 31, 2007, total revenues were $69.5 million compared to $106.2 million for the same period in the previous year, a decrease of 35 percent. The Company reported a net loss of $22.7 million, or a loss of $1.50 per share, compared to a net loss of $22.1 million, or a loss of $1.48 per share, in the prior year�s third quarter. For the nine-month period ended October 31, 2007, total revenues were $217.4 million compared to $320.2 million for the same period in the previous year, a decrease of 32 percent. The Company reported a net loss of $60.2 million, or a loss of $3.98 per share, compared to a net loss of $49.4 million, or $3.30 per share, in the prior year�s nine-month period. Conference Call for Third Quarter Results Interested parties are invited to a live conference call on December 11, 2007 discussing third quarter results at 5:00 a.m. pacific time, 8:00 a.m. eastern time, at www.sharperimage.com or by calling (800) 891-4505. The conference call may also be accessed from outside the United States at (706) 634-2296. To access the call from www.sharperimage.com, click on �Investor Relations.� A digital replay of the conference call will be available two hours after the completion of the call through 12:00 Midnight, Eastern time, December 18, and can be accessed by dialing (800) 642-1687 and entering code number 25571948. This replay for the conference call is also available outside the United States, and can be accessed by calling (706) 645-9291 and entering code number 25571948. About Sharper Image The Sharper Image is a specialty retailer that is nationally and internationally renowned as a leading source of new, innovative, high-quality products that make life better and more enjoyable. The Company's principal selling channels include 186 Sharper Image specialty stores throughout the United States; the award-winning Sharper Image monthly catalog; and its primary Web site, www.sharperimage.com. The Company also has business-to-business sales teams for marketing its exclusive and proprietary products for corporate incentive and reward programs and wholesale to selected U.S. and international retailers. Forward-Looking Statements This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the Company's current plans, expectations, estimates, and projections about the specialty retail industry and management's beliefs about the Company's future performance. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates" or variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties that are difficult to predict and which may cause the Company's actual results and performance to differ materially from those expressed or forecasted in any such forward-looking statements. Some of these risks and uncertainties are discussed in the Company�s Annual Report on Form 10-K for the year ended January 31, 2007 under �Risk Factors�. These risks include, among other factors,�the success of its new business strategy, its ability to continue to find or develop and to offer attractive merchandise to customers, the market potential for products in design,�the success of its advertising efforts, changes in�business and economic conditions, risks associated with its retail store, catalog and Internet operations, and changes in the competitive environment in which it operates. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements. However, readers should carefully review the statements set forth in the reports, which the Company files from time to time with the Securities and Exchange Commission, particularly its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. THE SHARPER IMAGE� FINANCIAL TABLES (Unaudited) (Dollars in thousands except number of shares and per share amounts) � � � � � � Three-Months EndedOctober 31, Nine-Months EndedOctober 31, Statements of Operations 2007 2006 2007 2006 � Net Sales $ 67,389 $ 103,295 $ 210,795 $ 311,481 Delivery 1,747 2,640 5,480 8,061 Licensing and list rentals � 315 � � 271 � � 1,097 � � 668 � Revenues 69,451 106,206 217,372 320,210 � Cost of products 42,065 63,009 126,642 173,623 Buying and occupancy 20,086 20,621 59,499 61,242 Advertising and promotion 8,914 18,549 24,341 60,260 Selling, General and administrative � 35,437 � � 40,693 � � 103,740 � � 107,370 � � Operating loss (37,051 ) (36,666 ) (96,850 ) (82,285 ) Other income-net � (975 ) � (91 ) � (2,009 ) � 124 � � Loss before income tax benefit (38,026 ) (36,757 ) (98,859 ) (82,161 ) � Income tax benefit � (15,288 ) � (14,666 ) � (38,709 ) � (32,782 ) � Net loss $ (22,738 ) $ (22,091 ) $ (60,150 ) $ (49,379 ) � Net loss per share - basic & diluted $ (1.50 ) $ (1.48 ) $ (3.98 ) $ (3.30 ) � Weighted avg. number of shares - basic & diluted 15,154,195 14,971,496 15,098,210 14,962,544 � � � October 31, January 31, October 31, Balance Sheets 2007 2007 2006 � ASSETS Current assets Cash and cash equivalents $ 804 $ 18,014 $ 834 Accounts receivable, net 12,646 13,076 28,035 Merchandise inventories 101,433 76,722 122,299 Deferred income taxes 16,940 16,720 15,809 Prepaid income taxes 2,118 2,314 2,544 Prepaid expenses and other � 5,965 � � 5,186 � � 16,366 � Total current assets 139,906 132,032 185,887 Property and equipment, net 70,650 86,140 97,212 Deferred income taxes and other deferred assets 73,168 35,339 13,863 Other assets � 12,358 � � 10,433 � � - � Total assets $ 296,082 � $ 263,944 � $ 296,962 � � LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 65,287 $ 35,711 $ 60,941 Accrued expenses 13,344 20,152 17,827 Accrued compensation 6,952 5,014 5,335 Reserve for refunds 15,651 17,877 17,300 Revolving credit facility and term-loan 62,092 - 22,342 Deferred revenue � 34,808 � � 31,997 � � 38,242 � Total Current Liabilities 198,134 110,751 161,987 Deferred rent and other deferred liabilities 27,824 28,046 1,590 Long term borrowings � 6,339 � � 2,031 � � - � Total liabilities � 232,297 � � 140,828 � � 163,577 � Stockholders' equity Common stock 152 150 150 Additional paid-in capital 116,406 114,839 114,543 Retained earnings (accumulated deficit) � (52,773 ) � 8,177 � � 18,692 � Total stockholders' equity � 63,785 � � 123,166 � � 133,385 � Total liabilities and stockholders' equity $ 296,082 � $ 263,994 � $ 296,962 �