FORT WORTH, Texas, Aug. 16 /PRNewswire-FirstCall/ -- The Bombay
Company, Inc. (NYSE:BBA) reported that revenue for the three months
ended July 29, 2006 decreased 5.3% to $121.3 million compared to
$128.0 million for the three months ended July 30, 2005. Same store
sales for Bombay stores in existence for more than one year
decreased 3.0% for the quarter. Revenue from retail stores declined
to $113.3 million from $119.5 million on a lower store count while
our direct-to-customer business, which includes Internet and Mail
Order, grew to $7.3 million for the quarter compared to $4.5
million last year, driven primarily by Internet sales. Prior year
amounts include $3.3 million of revenue from the Bailey Street
operations, the assets of which were sold during Fiscal 2005. The
loss before income taxes for the quarter ended July 29, 2006 was
$20.2 million compared to $13.3 million for the quarter ended July
30, 2005. The net loss for the quarter ended July 29, 2006 was
$19.9 million or $0.55 per share compared to a net loss of $9.4
million or $0.26 for the corresponding period of the prior year.
For the six-month period, revenue decreased 4.1% to $239.9 million
compared to $250.2 million for the corresponding period of the
prior year. Revenue from retail stores declined to $224.0 million
from $232.5 million as a result of the reduction in store count and
a 2.1% decline is same store sales while our direct-to-customer
business grew to $13.8 million for the quarter compared to $9.7
million last year, due to higher Internet sales. Fiscal 2005
amounts include $6.9 million of revenue from Bailey Street
operations. The loss before income taxes for the six months ended
July 29, 2006 was $36.1 million compared to $26.8 million for the
six months ended July 30, 2005. The net loss for the quarter ended
July 29, 2006 was $35.5 million or $0.98 per share compared to a
net loss of $17.3 million or $0.48 for the corresponding period of
the prior year. David B. Stewart, Chief Executive Officer, noted,
"My focus since arriving in early June has been on developing a
plan designed to return the Company to positive cash flow and
improve operations to attract customers and drive sales and
margins. Toward this end, first steps to impact Fiscal 2006 and
position the Company included: * selling unproductive inventory
from our stores and distribution system, * strengthening our store
merchandise presentation to be more customer friendly and
understandable by re-aligning rooms for a more logical product
adjacency, * developing in-store presentations designed to increase
velocity of Core items, and * strengthening the merchandise buy for
the second half of the year in key categories. "I believe that
these actions were critical to position the Company to execute for
the fall. Softness in sales and margins during May and June left
the Company with higher levels of inventory and reduced
profitability. Although adversely affecting the gross margin
percentage, the summer clearance promotion generated significant
sales, which helped bring inventory levels back in line and set the
stage for our new August merchandise presentation. "On a longer
term basis, in order to return to positive cash flow, we need to
reduce costs. To that end, in addition to the store closings
previously announced, we have identified four initiatives designed
to save approximately $31 million on an annual basis. These
initiatives include: * reducing head office overhead cost through
headcount reductions including the elimination of three senior
management positions that previously reported to me. * refocusing
marketing and eliminating unproductive print advertising, *
converting our BombayKIDS operations to core assortments over the
next 12 to 18 months, and * reducing discretionary in-store
markdowns. "To attract customers and drive sales and margins, we
need to return to our heritage and capitalize on the niche that
Bombay occupies in the specialty home furnishings area --
leveraging the strengths of our mall and off-mall store networks,
improving the effectiveness of our marketing, focusing our product
assortment, improving store execution and driving growth through
bombaycompany.com website. We are laying the groundwork for a 2007
plan designed to do just that," concluded Mr. Stewart. The Company
ended the quarter with $28.3 million in bank borrowings compared to
$55.5 million last year. Inventory levels were $44.5 million lower
than the same period last year when levels were unusually high in
preparation of last year's "rooms" lifestyle store presentation.
The Company is in the process of finalizing an amendment to its
credit facility that would, among other things, enhance its
seasonal borrowing capacity for the third quarter including adding
an incremental facility secured by inventory during the peak
borrowing season. As a component of the transaction, the Company
contemplates entering into an agreement that would provide for a
real estate loan secured by its corporate headquarters building to
create additional borrowing availability under the revolving credit
facility. In conjunction with this release, you are invited to
listen to Bombay's conference call with management that will be
conducted on Thursday, August 17, 2006 at 10:00 a.m. Central Time.
Interested parties should dial 212-896-6010 ten minutes prior to
the start time. The call will also be broadcast live over the
Internet at http://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 21274578. 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 decor and furniture
through 472 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 Company to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Those risks are described in the Company's public
announcements, reports to stockholders and SEC filings, including
but not limited to Reports on Forms 10-K, 8-K and 10-Q, copies of
which are available from the SEC or may be obtained upon request
from the Company. The Company undertakes no obligation to revise
the forward-looking statements contained therein to reflect events
or circumstances after the date hereof as a result of new
information, future events or otherwise. THE BOMBAY COMPANY, INC.
AND SUBSIDIARIES Consolidated Statements of Operations (In
thousands, except per share amounts) (Unaudited) Three Months Ended
Six Months Ended July 29, July 30, July 29, July 30, 2006 2005 2006
2005 (as adjusted) (as adjusted) Net revenue $121,276 $128,047
$239,940 $250,158 Costs and expenses: Cost of sales, buying and
store occupancy costs 101,477 102,421 196,127 197,621 Selling,
general & administrative expenses 39,539 38,977 79,303 79,036
Operating loss (19,740) (13,351) (35,490) (26,499) Gain on sale of
assets --- 560 --- 560 Interest expense, net (442) (518) (649)
(830) Loss before income taxes (20,182) (13,309) (36,139) (26,769)
Income tax benefit (261) (3,957) (665) (9,448) Net loss ($19,921)
($9,352) ($35,474) ($17,321) Net loss per basic & diluted share
($0.55) ($0.26) ($0.98) ($0.48) Avg. common shares outstanding
36,110 36,220 36,020 36,080 Avg. common shares outstanding and
dilutive potential common shares 36,110 36,220 36,020 36,080 Other
Selected Financial and Operating Data Capital expenditures (net)
$2,368 $6,268 $4,143 $11,276 Depreciation and amortization $4,656
$4,575 $9,109 $9,103 Stores opened 3 5 7 22 Stores closed 13 5 33
29 Store composition: Bombay core 368 391 Outlet 44 48 KIDS 60 56
Total 472 495 Total Combination format stores 56 52 THE BOMBAY
COMPANY, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In
thousands, except per share amounts) (Unaudited) July 29, January
28, July 30, 2006 2006 2005 (as adjusted) ASSETS Current assets:
Cash and cash equivalents $3,511 $4,015 $10,488 Inventories 122,400
128,719 166,865 Other current assets 15,868 14,846 35,201 Total
current assets 141,779 147,580 212,554 Property and equipment, net
80,698 84,651 89,814 Deferred taxes 373 456 6,955 Goodwill, net 423
423 423 Other assets 4,617 5,631 5,183 Total assets $227,890
$238,741 $314,929 LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Bank borrowings $28,333 $--- $55,511 Accounts payable
and accrued expenses 26,174 29,176 33,132 Gift certificates
redeemable 8,460 9,224 7,233 Accrued payroll and bonuses 4,198
6,219 4,823 Accrued insurance 5,534 5,178 4,435 Customer deposits
5,092 4,526 4,021 Current portion of accrued rent 3,743 3,871 3,566
Other current liabilities 6,155 5,834 3,694 Total current
liabilities 87,689 64,028 116,415 Accrued rent and other long term
liabilities 38,860 38,976 35,580 Stockholders' equity: Preferred
stock, $1 par value, 1,000,000 shares authorized --- --- --- Common
stock, $1 par value, 50,000,000 shares authorized, 38,149,646
shares issued 38,150 38,150 38,150 Additional paid-in capital
79,962 79,817 79,880 Retained earnings (deficit) (11,804) 23,669
53,077 Accumulated other comprehensive income 2,291 2,077 1,050
Common shares in treasury, at cost, 1,807,768; 1,715,066 and
1,826,968 shares, respectively (7,258) (7,038) (7,498) Deferred
compensation --- (938) (1,725) Total stockholders' equity 101,341
135,737 162,934 Total liabilities and stockholders' equity $227,890
$238,741 $314,929 THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (In thousands, except per
share amounts) (Unaudited) Six Months Ended July 29, July 30, 2006
2005 (as adjusted) Cash flows from operating activities: Net loss
($35,474) ($17,321) Adjustments to reconcile net loss to net cash
used in operating activities: Depreciation and amortization 9,109
9,103 Stock-based compensation expense 951 595 Gain on sale of
assets --- (560) Amortization of landlord construction allowances
and other (1,611) (1,934) Change in assets and liabilities:
Decrease in other assets (912) (7,201) (Increase) decrease in
inventories 6,534 (22,039) Decrease in current liabilities (4,747)
(10,098) Increase in noncurrent liabilities 78 654 Landlord
construction allowances 1,612 4,606 Net cash used in operating
activities (24,460) (44,195) Cash flows from investing activities:
Purchases of property and equipment (4,143) (11,276) Proceeds from
sale of assets --- 575 Net cash used in investing activities
(4,143) (10,701) Cash flows from financing activities: Net bank
borrowings 28,333 55,511 Decrease in outstanding checks in excess
of cash balances (295) --- Proceeds from the exercise of employee
stock options 2 669 Sale of stock to employee benefit plans and
other 81 141 Net cash provided by financing activities 28,121
56,321 Effect of exchange rate change on cash and cash equivalents
(22) (105) Net increase (decrease) in cash and cash equivalents
(504) 1,320 Cash and cash equivalents at beginning of period 4,015
9,168 Cash and cash equivalents at end of period $3,511 $10,488
Supplemental disclosure of cash flow information: Interest paid
$391 $786 Income taxes paid 58 243 Non-cash investing and financing
activities: Distributions of restricted stock 18 989 Cancellations
of restricted stock (310) --- Distribution of director fees 50 60
http://www.newscom.com/cgi-bin/prnh/20051026/BOMBAYLOGO
http://photoarchive.ap.org/ DATASOURCE: The Bombay Company, Inc.
CONTACT: Elaine D. Crowley, Sr. Vice President, Chief Financial
Officer of The Bombay Company, Inc., +1-817-347-8200 Web site:
http://www.bombaycompany.com/
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