Monday November 22, 4:56 pm Eastern Time
biz.yahoo.com
Company Press Release
Zany Brainy, Inc. Reports Fiscal 1999 Third Quarter Results
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--Nov. 22, 1999--Zany Brainy, Inc. (Nasdaq National Market: ZANY - news), a leading specialty retailer of high quality toys, games, books and multimedia products, today announced results for its third quarter and nine-months ended October 30, 1999.
For the third quarter of 1999, total sales increased 52% to $46.7 million compared to $30.7 million in the third quarter of 1998. Comparable store sales for the quarter increased 3%.
The net loss for the third quarter of fiscal 1999 was $2.0 million, or $(0.09) per basic and diluted share. In the comparable quarter of fiscal 1998, the Company reported a net loss of $3.9 million, or $(0.73) per basic and diluted share.
In June 1999, the Company completed its initial public offering and all preferred stock was converted to common. Had the initial public offering shares been assumed outstanding and the preferred stock been converted to common stock at the beginning of the third quarter, 1998, pro forma net loss per basic and diluted share would have been $(0.12) in the third quarter of fiscal 1998. For comparability, the 1998 pro forma net loss was adjusted to include the tax benefit of the loss, which was not recognized by the Company until the fourth quarter of fiscal 1998.
''We celebrated our 28th grand opening of 1999 in the third quarter,'' stated Keith C. Spurgeon, Chairman and CEO of Zany Brainy, Inc. ''Not only did we exceed our goal of 25 new stores this year, but in the third quarter alone, we opened 12 new stores and entered 3 new states.''
''In addition, www.zanybrainy.com was launched as a joint venture with Online Retail Partners, which provides the backing of a strong team of e-commerce players including Liberty Digital, Inc. (Nasdaq: LDIG - news), Comcast Interactive Capital and Global Retail Partners. The site features a vast selection of high quality toys, games, books and multimedia product for kids and further extends our brand by creating a virtual presence for Zany Brainy throughout the United States.''
Gross profit for the third quarter ended October 30, 1999, as a percentage of net sales, was 28.5%. Selling, general and administrative expenses, as a percentage of net sales, showed improvement decreasing to 35.3% from 40.5% for the same period last year.
''We believe that we are well-positioned for the key holiday season,'' continued Mr. Spurgeon. ''As previously reported, we recently distributed our biggest and best Holiday Gift Guide featuring, for the first time, a convenient toll free number (1-877-WOW-KIDS) for our customers. This complements our strategy of extending the Zany Brainy brand and should also drive our holiday sales.''
For the nine-month period ended October 30, 1999, total sales increased 50% to $131.4 million compared to $87.8 million for the nine-month period in 1998. Comparable store sales for the nine-month period increased 7%.
The net loss for the nine-month period ended October 30, 1999 was $5.5 million, or $(0.40) per basic and diluted share. In the comparable period of fiscal 1998, the Company reported a net loss of $10.7 million, or $(1.99) per basic and diluted share.
In June 1999, the Company completed its initial public offering and all preferred stock was converted to common. Had the initial public offering shares been assumed outstanding and the preferred stock been converted to common stock at the beginning of fiscal 1998, pro forma net loss per basic and diluted share would have been $(0.26) and $(0.33) for the first three quarters of fiscal 1999 and 1998, respectively. For comparability, the 1998 pro forma net loss was adjusted to include the tax benefit of the loss, which was not recognized by the Company until the fourth quarter of fiscal 1998.
''The 1999 holiday season marks the first time that Zany Brainy can offer our products to customers throughout the United States via our stores, the Internet and our catalog,'' concluded Mr. Spurgeon. ''As more and more people discover that our toys are not only fun but also nurture a child's educational, emotional or physical development, we believe Zany Brainy will further establish itself as a favorite holiday shopping destination for years to come.''
About Zany Brainy
Zany Brainy, Inc. is a leading and rapidly growing specialty retailer of high quality toys, games, books and multimedia products for kids. The Company is a different kind of toy store with a unique product mission and a passionate commitment to its customers. Zany Brainy believes learning should be fun. Its products entertain, educate and spark the imaginations of children up to 12 years of age. The Company combines this distinctive merchandise offering with superior customer service and daily in-store events to create an interactive, ''kid-friendly'' and exciting shopping experience for children and adults. The Company presently operates 103 stores in 26 states.
Certain statements in this report, including statements regarding anticipated sales this holiday season and the extension of our brand through an e-commerce shopping site and catalog, are forward looking statements within the meaning of the Private Securities Litigation Reform Act. Actual results may differ materially from those indicated in such statements due to a number of factors, including unanticipated competitive and operational challenges in connection with operation of our stores and e-commerce site; the impact of catalog and e-commerce sales on our retail stores; and the inability to hire adequate personnel or replenish inventory on a timely basis. Additional information on factors that may affect the business and financial results of the Company can be found in filings of the Company with the Securities and Exchange Commission. |
