dELiA*s Reports Fourth Quarter Results Company Comments on Preliminary Expectations for First Quarter
BusinessWire, Thursday, April 15, 1999 at 08:06
there is an asterisk between dELiA and s. This symbol may not
appear properly in some systems.
NEW YORK--(BUSINESS WIRE)--April 15, 1999--dELiA*s Inc.
(NASDAQ:DLIA), a leading marketer to Generation Y, today announced
financial results for the fourth quarter and year ended January 31,
1999. Net sales for the fourth quarter increased 39.6% to $59.9
million from $42.9 million in the fourth quarter of last year. The
gross margin for the fourth quarter of 1998 was 49.2% of sales
compared to 50.1% in the fourth quarter of last year. Selling, general
and administrative expenses as a percent of sales increased to 40.8%
from 39.6% a year ago. The Company reported net income for the quarter
of $3.2 million, or $0.21 per share on a diluted basis, compared to
net income of $2.1 million after merger expenses, or $0.15 per share
on a diluted basis a year ago.
The financial results for fiscal 1997 have been restated to
reflect the results of TSI Soccer Corporation, which the Company
acquired in December 1997 in a transaction accounted for by the
pooling of interests method.
dELiA*s house list of individuals who have purchased or directly
requested a catalog as of January 31, 1999 increased to 10.7 million
names (which includes approximately five million names acquired as
part of the Company's September 16, 1998 acquisition of certain assets
of Fulcrum Direct, Inc.) from 4.2 million names at January 31, 1998.
The number of buyers was 6.1 million as of January 31, 1999 (which
includes approximately four million acquired names), compared to 1.3
million a year earlier.
Net sales for the year ended January 31, 1999 increased 40.1% to
$158.4 million from $113.0 million in the prior year. Net income for
the year was $5.8 million compared to $4.4 million after merger
expenses a year ago. Diluted earnings per share for fiscal 1998
increased to $0.41 compared to $0.34 in fiscal 1997.
The Company also announced that it expects to report a one- time
gain of approximately $2.00 per share in the first quarter of fiscal
1999 related to the public offering of iTurf, its Internet subsidiary.
In addition, the Company stated that based on current business trends
primarily related to sales weakness at its Screeem! subsidiary, this
gain will be partially offset by a net operating loss of approximately
$0.10 to $0.14 in the first quarter. In light of the Screeem!
performance and the anticipated losses of iTurf, the Company is
revisiting its financial forecasts for the full year.
Stephen Kahn, Chairman and Chief Executive Officer of dELiA*s,
commented, "Our core juniors catalog business exhibited particular
strength during the fourth quarter, driven by solid demand for dELiA*s
holiday merchandise through both the catalog and web sites. As we look
to build the dELiA*s brand, we are very excited about the tremendous
initial response to our first dELiA*s store, which opened in February
in The Westchester mall in White Plains, New York. We look forward to
the expansion of this concept, and accordingly, to increasing brand
penetration."
"During the fourth quarter, we also enjoyed strong results
from our recently acquired Storybook Heirlooms catalog. This
division has not only contributed to the substantial enhancement
of our database, but shows great potential for solid growth going
forward. In addition, we saw notable improvement at our TSI
Soccer subsidiary for the year."
Mr. Kahn continued, "However, as we have previously stated, we
have seen particular softness in the young men's side of our Screeem!
subsidiary. This weakness has intensified in recent weeks, as new
spring merchandise was not well received by our customers when it hit
the stores in mid- to late March. We are focused on addressing the
merchandising issues that have been impacting Screeem's results, and
in the near term, we will be considering a variety of operational and
strategic options as we carefully evaluate the future direction of
this business."
Mr. Kahn concluded, "Strategically, we believe the presence we
have established in three key channels -- direct marketing, retail and
the Internet -- leaves us well positioned to continue effectively
targeting Generation Y. To that end, we are particularly excited about
the recent initial public offering of iTurf, our Internet subsidiary.
We remain more confident than ever that the ongoing expansion of our
Internet business represents a very compelling opportunity, and we
look forward to further expansion of this channel."
dELiA*s Inc. is a leading marketer of apparel, accessories, home
furnishings and athletic goods to "Generation Y," which is defined as
consumers ages 10 to 24. The Company offers proprietary and other
brands through various catalogs and retail stores and provides on-line
community, content and commerce services to Generation Y.
With the exception of the historical information contained in this
press release, the matters described herein contain forward- looking
statements that are made pursuant to the Safe Harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve a number of risks, uncertainties and other factors
beyond the Company's control, which may cause material differences in
actual results, performance or other expectations. These factors
include, but are not limited to, increases in the cost of materials,
printing, paper, postage, shipping and labor; timing of catalog
mailings; response rates; levels of competition; difficulties in
integrating acquisitions; weather and other factors affecting retail
stores; and other factors detailed in the Company's registration
statements and periodic reports filed with the Securities and Exchange
Commission.
*T
dELiA*s Inc.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share data)
Three Months Ended Year Ended
1/31/99 1/31/98 1/31/99 1/31/98
Net sales $ 59,898 $ 42,909 $158,364 $113,049
Cost of sales 30,454 21,397 78,368 57,811
Gross profit 29,444 21,512 79,996 55,238
Selling, general and
administrative expenses 24,429 17,007 71,711 47,943
Interest and other income, net 195 382 962 1,201
Income before provision for
income taxes and non-
recurring merger expenses 5,210 4,887 9,247 8,496
Non-recurring merger expenses -- 1,614 -- 1,614
Income before provision for
income taxes 5,210 3,273 9,247 6,882
Provision for income taxes 1,972 1,183 3,405 2,456
Net income $ 3,238 $ 2,090 $ 5,842 $ 4,426
Per share data:
Basic net income per share $ 0.23 $ 0.16 $ 0.42 $ 0.34
Diluted net income per share $ 0.21 $ 0.15 $ 0.41 $ 0.34
Shares used in the calculation
of basic net income
per share 14,159 13,310 13,779 12,942
Shares used in the calculation
of diluted net income
per share 15,300 13,498 14,318 13,083
dELiA*s Inc.
SELECTED BALANCE SHEET DATA
(In thousands)
January 31, 1999 January 31, 1998
Assets
Current assets
Cash and investments $ 10,981 $ 41,560
Merchandise inventories 21,232 11,233
Prepaid expenses and other
current assets 11,352 5,120
Total current assets 43,565 57,913
Property and equipment - net 12,542 6,222
Other assets 26,037 437
Total assets $ 82,144 $ 64,572
Liabilities and Stockholders' Equity
Current liabilities 18,085 19,954
Long-term liabilities 452 474
Stockholders' equity 63,607 44,144
Total liabilities and
stockholders' equity $ 82,144 $ 64,572
dELiA*s Inc.
SELECTED OPERATING DATA
(In thousands, except retail store data)
January 31, 1999 January 31, 1998
Total Buyers 6,071 1,308
Total House Names 11,079 4,192
Total Retail Stores 43 14
*SIPC/NYSE.
Unauthorized access is prohibited. Usage will be monitored.
|
