The Dress Barn, Inc. -- Fourth Quarter Sales Increase 48% to $307.1
Million -- -- Fourth Quarter Diluted Earnings Per Share Increase
140% to $1.08 -- The Dress Barn, Inc. (NASDAQ - DBRN), today
announced sales and earnings results for its fourth fiscal quarter
and fiscal year ended July 30, 2005. Net sales for the
thirteen-week period ended July 30, 2005, increased 48% to $307.1
million compared to the prior year's level of $208.0 million. The
increase was driven by the inclusion of results from maurices,
which was acquired on January 2, 2005, and a comparable store sales
increase of 6% for the quarter. The Company achieved stronger
results despite an additional week of sales in the year-ago
quarter, which contributed $11.7 million to last year's fourth
quarter sales results. Net earnings for the thirteen-week period
ended July 30, 2005 increased 143% to $33.6 million, or $1.08 per
diluted share, compared to $13.8 million, or $0.45 per diluted
share in the prior year's fourteen-week period. There were certain
items in both the current and prior year's fourth quarter that skew
the year-over-year comparison. Earnings in the current year's
fourth quarter were favorably impacted by an after tax gain of
approximately $22.8 million, or $0.73 per diluted share, due to the
reversal of a litigation reserve. Also during the fourth quarter,
the Company recorded certain additional charges of approximately
$3.0 million, or $0.10 per share, primarily related to the
write-off of unamortized bank fees from the repayment of its $100
million term loan and consultant fees in connection with
Sarbanes-Oxley compliance. Excluding these items, this year's
fourth quarter earnings would have been approximately $13.8
million, or $0.45 per diluted share. Earnings results in the prior
year period were favorably impacted by a $3.8 million after tax
contribution for the extra reporting week and the reversal of tax
reserves. These items increased earnings per share by approximately
$0.12. Excluding the impact of these items, last year's earnings
would have been approximately $10.0 million, or $0.33 per diluted
share. David R. Jaffe, President and Chief Executive Officer,
commented, "We are very pleased with our results for the fourth
quarter, which put a strong finish on a truly transformative year
for The Dress Barn, Inc. The acquisition of maurices, which is
integrating smoothly and performing very well, has given us new
opportunity for growth not only in sales, but also through the
creation of synergy which we expect to lead to continued
improvements in our profitability." Mr. Jaffe continued, "We will
continue to transition our Company to be a strong competitor. We
will push forward with new store growth for maurices, which is the
leading small market specialty store for youthful fashion. We will
also continue to make improvements to our dressbarn brand, which
includes significant improvements in merchandising and marketing."
Mr. Jaffe concluded, "We are very pleased with the strong cash flow
generation we are experiencing. The reduction of debt will again
enable us to pursue a variety of strategic alternatives for the
development of our business going forward. We believe that, as a
result, we are in a strong position to continue to generate above
average returns on invested capital and we are committed to
delivering value to our shareholders both in the short term and
well into the future. Full-Year Results Net sales for the fifty-two
week period ended July 30, 2005 increased 33% to $1 billion
compared to $754.9 million reported for the fifty-three week fiscal
period ended July 31, 2004. Comparable store sales increased 5% for
the fiscal year and include the operations from maurices as of
January 2, 2005. Net earnings for the fiscal year ended July 30,
2005 increased 70% to $52.6 million, or $1.72 per diluted share.
This compares to $30.9 million, or $1.03 per diluted share as
reported for the fifty-three week period ended July 31, 2004. This
year's earnings, excluding the impact of the previously noted
items, would have been approximately $36.2 million, or $1.18 per
diluted share. Excluding the favorable impact of the extra
reporting week and the reversal of the previously noted tax
reserves, last year's earnings would have been approximately $27.1
million, or $0.90 per diluted share. The Company will conduct a
conference call on October 11, 2005 at 9:00 a.m. Eastern Time to
review its fourth quarter financial results. The conference call
will be webcast and can be accessed via the company's website at
www.dressbarn.com. The dial-in number is (617) 213-8054 and the
passcode is 14693168. A replay of the call will be available until
November 11, 2005 by dialing (617) 801-6888; the access code is
94619854. 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 its dressbarn and
maurices brands. As of October 1, 2005, the Company operated 787
dressbarn stores in 45 states and 500 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 for the quarter ending April 30,
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 Amounts
in thousands except per share amounts Fourth Quarter Ended
--------------------------------- July 30, July 31, 2005 2004
--------- --------- (13 (14 Weeks) Weeks) Net sales $307,052 100.0%
$207,975 100.0% Cost of sales, including occupancy and buying costs
187,722 61.1% 125,181 60.2% --------- --------- Gross profit
119,330 38.9% 82,794 39.8% Selling, general and Administrative
expenses 86,414 28.1% 57,547 27.7% Depreciation expense 10,549 3.4%
6,107 2.9% Litigation charge (37,726) -12.3% 861 0.4% ---------
--------- Operating income 60,093 19.6% 18,279 8.8% Interest income
585 0.2% 437 0.2% Interest expense (5,527) -1.8% (509) -0.2% Other
income 382 0.1% 382 0.2% --------- --------- Earnings before
provision for income taxes 55,533 18.1% 18,589 8.9% Provisions for
income taxes 21,952 7.1% 4,783 2.3% --------- --------- Net
earnings $33,581 10.9% $13,806 6.6% ========= ========= Earnings
per share: Basic: $1.12 $0.47 ========= ========= Diluted: $1.08
$0.45 ========= ========= Weighted average shares outstanding
Basic: 30,027 29,609 --------- --------- Diluted: 31,023 30,449
--------- --------- The Dress Barn, Inc. and Subsidiaries Condensed
Consolidated Statements of Earnings Amounts in thousands except per
share amounts Fiscal Year Ended -----------------------------------
July 30, July 31, 2005 2004 ----------- --------- (52 (53 Weeks)
Weeks) Net sales $1,000,264 100.0% $754,903 100.0% Cost of sales,
including occupancy and buying costs 621,656 62.1% 472,198 62.6%
----------- --------- Gross profit 378,608 37.9% 282,705 37.4%
Selling, general and Administrative expenses 286,751 28.7% 212,477
28.1% Depreciation expense 34,457 3.4% 23,197 3.1% Litigation
charge (37,726) -3.8% 3,329 0.4% ----------- --------- Operating
income 95,126 9.5% 43,702 5.8% Interest income 1,735 0.2% 2,204
0.3% Interest expense (12,627) -1.3% (1,959) -0.3% Other income
1,526 0.2% 1,526 0.2% ----------- --------- Earnings before
provision for income taxes 85,760 8.6% 45,473 6.0% Provision for
income taxes 33,200 3.3% 14,541 1.9% ----------- --------- Net
earnings $52,560 5.3% $30,932 4.1% =========== ========= Earnings
per share: Basic: $1.76 $1.05 =========== ========= Diluted: $1.72
$1.03 =========== ========= Weighted average shares outstanding
Basic: 29,785 29,413 ----------- --------- Diluted: 30,579 30,120
----------- --------- The Dress Barn, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets Dollars in thousands July 30,
July 31, ASSETS 2005 2004 --------- --------- Current Assets: Cash
and cash equivalents $42,434 $15,141 Restricted cash and
investments 100 38,661 Marketable securities and investments 85
122,700 Merchandise inventories 167,643 116,912 Deferred tax asset
- 14,845 Prepaid expenses and other 12,923 8,898 ---------
--------- Total Current Assets 223,185 317,157 --------- ---------
Property and Equipment 232,698 163,204 Intangible Assets 111,243 -
Goodwill 132,566 - Other Assets 16,553 8,955 --------- ---------
TOTAL ASSETS $716,245 $489,316 ========= ========= LIABILITIES AND
SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable- trade
$107,702 $66,776 Accrued salaries, wages and related expenses
35,209 21,349 Litigation accrual - 36,128 Other accrued expenses
35,237 24,247 Customer credits 12,849 8,970 Income taxes payable 92
5,548 Deferred tax liability 3,612 - Current portion of long-term
debt 1,089 1,033 --------- --------- Total Current Liabilities
195,790 164,051 --------- --------- Long-Term Debt 155,900 31,988
Deferred Rent and Other 44,194 40,319 Long-Term Deferred Tax
Liability 7,233 - Shareholders' Equity 313,128 252,958 ---------
--------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $716,245
$489,316 ========= ========= *T
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