DBRN The Dress Barn, Inc. (MM)

The Dress Barn, Inc. (NASDAQ - DBRN), a leading national specialty apparel retailer offering quality career and casual fashion apparel through the dressbarn and maurices brands, today announced sales and earnings results for its third fiscal quarter ended April 30, 2005. The earnings results include the operations of maurices, which was acquired on January 2, 2005. Sales for the three-months ended April 30, 2005 rose 61% to $296.0 million compared to $183.3 million in the third quarter of the prior year. This increase was driven by the acquisition of the maurices business as well as by a consolidated comparable store sales increase of 7%. Net income for the period increased 85% to $10.2 million, or $0.33 per diluted share versus $5.5 million, or $0.18 per diluted share in the year-ago quarter. This increase was driven both by a strong contribution from maurices as well as considerable improvements in the dressbarn business. Sales for the nine months ended April 30, 2005 increased 27% to $693.2 million compared to sales of $546.9 million for last year's corresponding period. Net income for the nine month period increased 11% to $19.0 million, or $0.62 per diluted share compared to $17.1 million or $0.57 per diluted share in the prior year period. David R. Jaffe, President and Chief Executive Officer, commented: "We are very pleased with our results for the quarter. Both dressbarn and maurices' consumers have reacted favorably to our merchandise assortment as evidenced by our continued strong comparable store sales performance." "We experienced strength in our core dressbarn business across all regions of the country and maurices performed well against a year ago quarterly comp sales increase of 17%. We believe that maurices has tremendous growth potential and will lead our new store opening strategy. We will also continue expanding our chain of successful dressbarn stores." "Our integration process has gone smoothly and we continue to make excellent progress in combining our respective areas of expertise and in identifying synergies. In addition to opportunities to realize efficiency between our two organizations, we are pleased to note that the cultures of our organizations are very compatible. We believe that this quarter's performance demonstrates that we have already begun to flow significant benefits through to our shareholders from this transformational acquisition. Over the long term, we believe it will generate considerable long-term value." As announced yesterday, the Supreme Court of Connecticut ruled unanimously in favor of Dress Barn, reversing the 2003 jury verdict of $32 million. The Company will seek release of the approximately $40 million currently in the escrow established in connection with the appeal. The Company will host a conference call, today, Wednesday, June 1, 2005, at 4:30 p.m. Eastern Time to review its third fiscal quarter financial results. The conference call will be webcast by Thomson/CCBN and can be accessed at The Dress Barn, Inc.'s website at www.dressbarn.com. The dial-in number is (617) 614-2705 and the passcode is 58276380. A replay of the call will be available until June 30, 2005 by dialing (617) 801-6888 the passcode is 96916932. ABOUT THE DRESS BARN, INC. The Dress Barn, Inc. (NASDAQ - DBRN), is a leading national specialty apparel retailer offering quality career and casual fashion apparel through the dressbarn and maurices brands. As of April 30, 2005, the Company operated 788 dressbarn stores in 45 states and 476 maurices stores in 39 states. For more information, please visit www.dressbarn.com and www.maurices.com. FORWARD-LOOKING STATEMENTS Certain statements made in this press release and the conference call which are not historical in nature are "forward-looking statements", within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The Company does not undertake to publicly update or review its forward-looking statements even if experience or future changes make it clear that our projected results expressed or implied will not be achieved. Detailed information concerning a number of factors as they relate to dressbarn's operations that could cause actual results to differ materially from the information is readily available on our most recent report on Form 10-K/A for the year ending July 31, 2004 and Form 10-Q/A for the quarter ending January 29, 2005. Such factors as they relate to maurices include risks applicable to the retail apparel business in general and risks which may be applicable to maurices' business. In addition, there are risks associated with the integration of two businesses. The conference call will be recorded on behalf of The Dress Barn, Inc. and consists of copyrighted material. It may not be re-recorded, re-produced, transmitted or re-broadcast, in whole or in part, without the Company's express written permission. Accessing the call or the rebroadcast represents consent to these terms and conditions. Participation in the call serves as consent to having any comments or statements made appear on any transcript, broadcast or rebroadcast of this call. -0- *T The Dress Barn, Inc. and Subsidiaries Condensed Consolidated Statements of Earnings - Unaudited Dollars in thousands except shares and per share amounts Thirteen Weeks Ended ------------------------------------- April 30, April 24, 2005 2004 ---------- ---------- Net sales $295,958 100.0% $183,331 100.0% Cost of sales, including occupancy and buying costs 183,986 62.2% 118,137 64.4% ---------- ---------- Gross profit 111,972 37.8% 65,194 35.6% Selling, general and administrative expenses 82,636 27.9% 51,720 28.2% Depreciation expense 10,007 3.4% 4,378 2.4% ---------- ---------- Operating income 19,329 6.5% 9,096 5.0% Interest income 377 0.1% 553 0.3% Interest expense (3,697) -1.2% (1,347) -0.8% Other income 381 0.1% 381 0.2% ---------- ---------- Earnings before income taxes 16,390 5.5% 8,683 4.7% Income taxes 6,197 2.1% 3,169 1.7% ---------- ---------- Net earnings $10,193 3.4% $5,514 3.0% ========== ========== Earnings per share: Basic $0.34 $0.19 ========== ========== Diluted $0.33 $0.18 ========== ========== Weighted average shares outstanding: Basic 29,836 29,522 ---------- ---------- Diluted 30,698 30,370 ---------- ---------- The Dress Barn, Inc. and Subsidiaries Condensed Consolidated Statements of Earnings - Unaudited Dollars in thousands except shares and per share amounts Thirty-Nine Weeks Ended ------------------------------------- April 30, April 24, 2005 2004 ---------- ---------- Net sales $693,212 100.0% $546,928 100.0% Cost of sales, including occupancy and buying costs 433,934 62.6% 347,017 63.4% ---------- ---------- Gross profit 259,278 37.4% 199,911 36.6% Selling, general and administrative expenses 200,337 28.9% 154,930 28.3% Depreciation expense 23,908 3.4% 17,090 3.2% ---------- ---------- Operating income 35,033 5.1% 27,891 5.1% Interest income 1,150 0.2% 1,767 0.3% Interest expense (7,100) -1.1% (3,918) -0.7% Other income 1,144 0.2% 1,144 0.2% ---------- ---------- Earnings before income taxes 30,227 4.4% 26,884 4.9% Income taxes 11,248 1.7% 9,758 1.8% ---------- ---------- Net earnings $18,979 2.7% $17,126 3.1% ========== ========== Earnings per share: Basic $0.64 $0.58 ========== ========== Diluted $0.62 $0.57 ========== ========== Weighted average shares outstanding: Basic 29,704 29,343 ---------- ---------- Diluted 30,484 30,031 ---------- ---------- The Dress Barn, Inc. and Subsidiaries Condensed Consolidated Balance Sheets - Unaudited Dollars in thousands April 30, April 24, ASSETS 2005 2004 ---------- ---------- Current Assets: Cash and cash equivalents $50,026 $66,248 Restricted cash and investments 40,286 -- Marketable securities and investments 793 127,103 Merchandise inventories 150,788 112,636 Deferred tax asset 12,083 14,441 Prepaid expenses and other 12,362 6,586 ---------- ---------- Total Current Assets 266,338 327,014 ---------- ---------- Property and Equipment 233,834 159,307 Intangible Assets 111,505 -- Goodwill 132,566 -- Other Assets 19,388 8,344 ---------- ---------- $763,631 $494,665 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable- trade $86,891 $83,751 Accrued salaries, wages and related expenses 31,873 20,422 Litigation accrual 38,583 35,911 Other accrued expenses 30,762 29,136 Customer credits 13,316 8,792 Income taxes payable 1,867 4,197 Current portion of long-term debt 4,825 1,019 ---------- ---------- Total Current Liabilities 208,117 183,228 ---------- ---------- Long-Term Debt 232,427 32,252 Deferred Rent 47,503 41,585 Shareholders' Equity 275,584 237,600 ---------- ---------- $763,631 $494,665 ========== ========== *T