URGI United Retail Grp. (MM)

United Retail Group, Inc. (NASDAQ-NMS: "URGI") today announced earnings for the first quarter, ended April 29, 2006. Net sales increased 2.7% to $109.4 million in the quarter from $106.5 million in the prior year period. Comparable store sales increased 3% in the quarter. Comparable store sales data does not include online ("Shop @ Home") sales. Shop @ Home sales increased 73% for the first quarter. Operating income for the first quarter increased 251% to $3.0 million, or 2.8% of sales, from $0.9 million, or 0.8% of sales, in the comparable quarter last year. Net income for the first quarter increased 93% to $1.9 million, or $0.14 per diluted share, versus $1.0 million, or $0.08 per diluted share, in the comparable quarter last year. Raphael Benaroya, the Company's Chairman, President and Chief Executive Officer, commented, "I am pleased with the solid first quarter results. The sales growth reflects strong customer acceptance across a broad range of products. Also, the sales momentum built up as the quarter progressed and, notably, was strongest in the Company's two southernmost fashion regions." He added: "Our online sales continued to grow rapidly. Importantly, the infrastructure is in place for us to leverage additional growth from the Internet." United Retail Group, Inc. invites investors to listen to a broadcast of the Company's conference call to discuss first quarter results as well as ongoing corporate developments. The call will be broadcast live over the Internet today at 11:30 a.m. (Eastern Daylight Time) and can be accessed by logging on to http://www.vcall.com. Raphael Benaroya, Chairman, President and Chief Executive Officer, and George R. Remeta, Vice Chairman and Chief Administrative Officer, will host the call. An online archive of the broadcast will be available within one hour of the completion of the call and will be accessible at http://www.vcall.com until May 30, 2006. Certain financial data disclosed for the first time during the broadcast will be posted on the "Press Releases" page of the financial information section of the Company's website, http://www.unitedretail.com. United Retail Group, Inc. is a specialty retailer of large-size women's fashion apparel, footwear and accessories featuring AVENUE(R) brand merchandise. The Company operates 496 AVENUE(R) stores with 2,182,000 square feet of selling space, as well as the AVENUE.COM website at http://www.avenue.com. The above release contains certain brief forward-looking statements concerning the Company's operations and performance. The Company cautions that any forward-looking statements are summary in nature, involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. The following factors, among others, could affect the Company's actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this release or otherwise made by management: threats of terrorism; war risk; shifts in consumer spending patterns, consumer preferences and overall economic conditions; the impact of competition and pricing; variations in weather patterns; fluctuations in consumer acceptance of the Company's products; changes in the ability to develop new merchandise; store lease expirations; increases in interest rates; the ability to retain, hire and train key personnel; risks associated with the ability of the Company's manufacturers to deliver products in a timely manner; political instability and other risks associated with foreign sources of production; and increases in fuel costs. The reports filed by the Company with the Securities and Exchange Commission contain additional information on these and other factors that could affect the Company's operations and performance. The Company does not intend to update the forward-looking statements contained in the above release, which should not be relied upon as current after today's date. -0- *T UNITED RETAIL GROUP, INC. ------------------------- 1ST QTR 2006 (000'S) Consolidated Statements Of Operations 13 weeks ended ------------------------------------- -------------------------------- (Unaudited) (Unaudited) April 29, April 30, Percent 2006 2005 + or - -------------------------------- Net sales $109,420 $106,531 2.7% Cost of goods sold, including buying and occupancy costs 80,994 80,840 0.2% -------------------------------- Gross profit 28,426 25,691 10.6% General, administrative and store operating expenses 25,390 24,827 2.3% -------------------------------- Operating income 3,036 864 251.4% Interest income 226 55 310.9% Interest expense (143) (219) - -------------------------------- Income before income taxes 3,119 700 345.6% Provision for (benefit from) income taxes (1) 1,183 (304) - -------------------------------- Net income $1,936 $1,004 92.8% ================================ Weighted average shares outstanding: Basic 13,391 12,662 Diluted 14,129 12,870 Net income per common share: Basic $0.14 $0.08 Diluted $0.14 $0.08 (1) Includes a valuation allowance for fiscal 2005 of $0.5 million related to deferred tax assets, net operating loss carryforwards and other tax attributes. ====================================================================== Consolidated Condensed ---------------------- (Unaudited) (Unaudited) Balance Sheets April 29, April 30, -------------- 2006 2005 ----------------------- Assets ------ Cash and cash equivalents $32,954 $18,591 Inventory (1) 62,413 57,890 Current deferred tax assets 7,316 - Other 8,771 8,538 ----------------------- Total current assets $111,454 $85,019 Property and equipment, net 64,068 75,749 Deferred compensation plan assets 4,490 3,304 Non-current deferred tax assets 10,394 - Other assets 1,904 1,876 ----------------------- Total assets $192,310 $165,948 ======================= Liabilities and Stockholders' Equity ------------------------------------ Current liabilities (1) $60,956 $65,291 Long-term distribution center financing 1,678 2,450 Long-term capital leases - 1,273 Deferred lease incentives 10,038 12,262 Deferred compensation plan liabilities 4,490 4,787 Other non-current liabilities 9,123 8,820 Stockholders' equity 106,025 71,065 ----------------------- Total liabilities and stockholders' equity $192,310 $165,948 ======================= (1) Includes import intransit inventories and corresponding payables of $4.5 million and $5.0 million as of April 29, 2006 and April 30, 2005, respectively. ====================================================================== Statistics 13 weeks ended ---------- ----------------------- Store Count (Unaudited) (Unaudited) ----------- April 29, April 30, 2006 2005 ----------------------- Beginning of period 500 514 New 0 0 Closed (4) (2) End of period 496 512 Selling Square Footage (000's) ------------------------------ Beginning of period 2,194 2,249 New / Expansion 0 0 Closed (12) (10) End of period 2,182 2,239 Average 2,188 2,242 ====================================================================== *T