News Releases
Brookstone Announces Fourth Quarter Earnings of $2.63 per Diluted Share and Fiscal 2001 Full Year Earnings
NASHUA, N.H., March 20, 2002 -- Brookstone, Inc. (Nasdaq:BKST) today announced results for the fourth quarter and full year ended February 2, 2002.
For the fourth quarter of Fiscal 2001, the Company reported a net income of $22.3 million, or $2.63 per diluted share, compared to a net income of $25.2 million or $2.98 per diluted share, for the fourth quarter of Fiscal 2000. Net sales for the thirteen-week fourth quarter decreased 6.2% to $169.8 million compared to $180.9 million for the fourteen-week fourth quarter of last year. Same store sales for the comparable thirteen-week period decreased 10.7% as compared to last year.
For the fiscal year, total company sales decreased 3.2% to $352.9 million for the fifty-two week period ended February 2, 2002 as compared to $364.5 million for the fifty-three week period last year. Same store sales for the comparable fifty-two week period decreased 8.6%. The Company reported a net income of $5.3 million, or $0.63 per diluted share, compared to a net income of $14.9 million, or $1.76 per diluted share for the comparable period last year.
Michael Anthony, Chairman, President and Chief Executive Officer, commented, "While the past year was one of the most difficult retail years on record, we feel significant achievements and progress were realized by Brookstone. First and foremost, the business model proved to be very resilient as evidenced by our strong financial performance. These results were achieved without price discounting in what was one of the most promotional periods in recent history. This action not only raised product margins for the quarter and year as a whole, but also helped ensure the long-term value of the brand.
Michael Anthony continued, "During the year we introduced over 240 new products. These new products contributed to the improved sales at the end of the fourth quarter as well as enhanced the value of the brand as evidenced by market research that showed improved results in areas such as product quality, innovation, and intent to purchase. In addition, we launched a completely new and improved Internet site at www.Brookstone.com. Finally, we created a new retail store concept in Gardeners Eden, which opened its first two stores. The Gardeners Eden stores met our internal sales projections in the fourth quarter, and we believe that these exciting stores will be an excellent future growth vehicle."
Mr. Anthony added, " We ended the year in a very strong financial position. Inventories were virtually flat to last year on an increase of 27 new stores. We generated in excess of $20 million in EBITDA and ended the year with approximately $29 million in cash."
Michael Anthony further commented, "We remain optimistic for the current fiscal year. For the first quarter we anticipate a loss of $0.80 to $0.85 per share based on a low single digit same store sales decrease and the effect of opening 27 new stores last year, which in our business model generate losses in the first quarter. For the year as a whole, we expect same store sales to increase in the mid single digit range and to open an additional 15 new stores. This in combination with increased product margins should result in full year diluted earnings per share of $1.20 to $1.25."
Brookstone, Inc. is a nationwide specialty retailer that currently operates 248 stores in 39 states, Puerto Rico and the District of Columbia. Typically located in high-traffic regional shopping malls and airports, the stores feature unique and innovative consumer products. The Company also operates a direct marketing business that consists of three catalogs, The Brookstone Collection, Hard-to-Find Tools and Gardeners Eden, as well as an e-commerce web site at http://www.Brookstone.com.
Statements in this release which are not historical facts, including statements about the Company's confidence or expectations, earnings, anticipated operations of its e-commerce sites and those of third-party service providers, and other statements about the Company's operational outlook, are forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties include, without limitation, risks of changing market conditions in the overall economy and the retail industry, consumer demand, the effectiveness of e-commerce technology and marketing efforts, availability of products, availability of adequate transportation of such products, and other factors detailed from time to time in the Company's annual and other reports filed with the Securities and Exchange Commission. Words such as "estimate," "project," "plan," "believe," "feel," "anticipate," "assume," "may," "will," "should," and similar words and phrases may identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligations to publicly release any revisions to these forward-looking statements or reflect events or circumstances after the date hereof.
(tables follow)
Brookstone, Inc.
Consolidated Statement of Income
($ in thousands)
(Unaudited)
Thirteen Fourteen Fifty-two Fifty-three
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
Feb. 2, Feb. 3, Feb. 2, Feb. 3,
2002 2001 2002 2001
----------------------------------------------
Net sales $ 169,785 $ 180,948 $ 352,917 $ 364,541
Cost of sales 90,656 96,044 224,643 224,968
----------------------------------------------
Gross profit 79,129 84,904 128,274 139,573
Selling, general
and administrative
expenses 42,547 43,737 118,578 114,187
----------------------------------------------
Income from
operations 36,582 41,167 9,696 25,386
Interest expense,
net (412) (221) (1,028) (626)
Minority interest
expense (25) -- (25) --
Income from Joint
Venture 13 -- 13 --
----------------------------------------------
Income before taxes
and cumulative
effect of
accounting change 36,158 40,946 8,656 24,760
Income tax
provision 13,885 15,724 3,324 9,508
----------------------------------------------
Income before
cumulative effect
of accounting
change 22,273 25,222 5,332 15,252
Cumulative effect
of accounting
change,
net of tax -- -- -- (308)
----------------------------------------------
Net income $ 22,273 $ 25,222 $ 5,332 $ 14,944
==============================================
Basic income per
share:
Income before
cumulative effect
of accounting
change $ 2.66 $ 3.03 $ 0.64 $ 1.84
Cumulative effect
of accounting
change, net of
tax -- -- -- (0.04)
----------------------------------------------
Net income $ 2.66 $ 3.03 $ 0.64 $ 1.80
==============================================
Diluted income per
share:
Income before
cumulative effect
of accounting
change $ 2.63 $ 2.98 $ 0.63 $ 1.80
Cumulative effect
of accounting
change, net of
tax -- -- -- (0.04)
----------------------------------------------
Net income $ 2.63 $ 2.98 $ 0.63 $ 1.76
==============================================
Brookstone, Inc.
Consolidated Balance Sheet
($ in thousands)
Feb. 2, 2002 Feb. 3, 2001
------------ ------------
Current Assets:
Cash and cash equivalents $ 28,928 $ 35,397
Receivables, net 8,170 7,477
Merchandise inventories 55,629 55,059
Deferred income taxes, net 3,447 3,633
Other current assets 4,933 4,030
----------------------------
Total current assets 101,107 105,596
Deferred income taxes, net 4,536 3,662
Property and equipment, net 45,058 41,956
Intangible assets, net 4,812 5,359
Other assets 1,592 2,595
----------------------------
Total assets $157,105 $159,168
============================
Liabilities and Shareholders'
Equity
Current Liabilities:
Accounts payable $ 11,232 $ 13,522
Other current liabilities 22,569 28,966
----------------------------
Total current liabilities 33,801 42,488
Other long term liabilities 13,246 11,755
Long term obligation under
capital lease 2,273 2,414
Commitments and Contingencies
Total shareholders' equity 107,785 102,511
----------------------------
Total liabilities and
shareholders' equity $157,105 $159,168
============================
Contacts: Philip Roizin, Executive Vice President of Finance and Administration (603) 880-9500 Robert Fusco, Investor Relations (603) 880-9500