GOTTSCHALKS INC. 
By
Net loss for fiscal 2007 was
As previously reported, total sales for the 13-week fiscal fourth quarter
decreased 14.2% to
Total sales for the 52-week fiscal 2007 decreased 8.1% to
Jim Famalette, Chairman and Chief Executive Officer of Gottschalks, stated, "Our financial performance in fiscal 2007 reflects persistent challenges in the retail environment. Difficult economic conditions, including the weak housing market and high gas prices, also more heavily affected consumers in California where the majority of our stores are located. Like many other retailers, we conducted deep discounting during the year, which negatively impacted our gross margin. However, we reduced our SG&A expenditures on a year over year basis. We were pleased with our ability to increase our credit card sales penetration and grow our credit card revenue during the year. Importantly, in the latter stages of 2007 we began the implementation of our Value Improvement Program (V.I.P.), which is designed to improve our operating performance and maximize shareholder value over the long-term."
Commenting on the Company's outlook,
Earnings Teleconference and Webcast
Gottschalks will host a conference call today at
About Gottschalks
Gottschalks is a regional department store chain, currently operating 59 department stores and three specialty apparel stores in six western states, including California (39), Washington (7), Alaska (5), Oregon (4), Nevada (2) and Idaho (2). Gottschalks offers better to moderate brand-name fashion apparel, cosmetics, shoes, accessories and home merchandise. Gottschalks offers corporate information and selected merchandise on its website located at http://www.gottschalks.com.
Business Risks and Forward Looking Statements
This release contains forward-looking statements (within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. In some instances, such statements may be identified by the use of forward-looking terminology such as "may," "will," "expects," "believes," "intends," "projects," "forecasts," "plans," "estimates," "anticipates," "continues," "targets," or similar terms, variations of such terms or the negative of such terms. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements, including, without limitation, the Company's ability to meet debt obligations and adhere to the restrictions and covenants imposed under its various debt agreements; the timely receipt of merchandise and the Company's ability to obtain adequate trade credit from its key factors and vendors; risks arising from general economic and market conditions (including uncertainties arising from acts of terrorism or war); the ability to improve the profitability and cash flows of its stores or to sell, sublease or close underperforming stores; the ability to modify operations in order to minimize the adverse impact of rising costs, including but not limited to health care, workers' compensation, property and casualty insurance and utilities costs; the effects of seasonality and weather conditions, changing consumer trends and preferences, competition, consumer credit, the Company's dependence on its key personnel and general labor conditions, all of which are described in more detail in Gottschalks' Annual Report on Form 10-K and other reports filed by Gottschalks with the Securities and Exchange Commission. GOTTSCHALKS DOES NOT PRESENTLY INTEND TO UPDATE THESE STATEMENTS AND UNDERTAKES NO DUTY TO ANY PERSON TO EFFECT ANY SUCH UPDATE UNDER ANY CIRCUMSTANCES.
(Tables Follow)
Supplemental Operating Data:
In accordance with accounting standards generally accepted in the
Pro Forma Financial Information
Fourth Quarter Fiscal Year
Ended Ended
February February February February
2, 3, 2, 3,
2008 2007 2008 2007
Sales
Continuing operations $204,428 $238,147 $628,550 $680,966
Discontinued operations 0 0 0 2,921
Total $204,428 $238,147 $628,550 $683,887
Gross Margin
Continuing operations $65,375 $78,910 $207,663 $234,347
Discontinued operations 0 0 0 500
Total $65,375 $78,910 $207,663 $234,847
Selling, general and
administrative expenses
Continuing operations $59,465 $60,563 $209,552 $212,355
Discontinued operations 0 0 0 1,533
Total $59,465 $60,563 $209,552 $213,888
Net income (loss)
Continuing operations $1,133 $8,872 ($12,433) $3,441
Discontinued operations 0 0 0 (792)
Total $1,133 $8,872 ($12,433) $2,649
GOTTSCHALKS INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(unaudited)
Fourth Quarter Fiscal Year
Ended Ended
February February February February
2, 3, 2, 3,
2008 2007 2008 2007
Net sales $204,428 $238,147 $628,550 $680,966
Net credit revenues 1,461 853 4,868 3,087
Net leased department
revenues 1,209 1,417 3,000 3,428
Total revenues 207,098 240,417 636,418 687,481
Costs and expenses:
Cost of sales 139,053 159,237 420,887 446,619
Selling, general
and administrative
expenses 59,465 60,563 209,552 212,355
Gain on sale of
aircraft 0 0 0 (946)
Depreciation and
amortization 3,959 4,021 15,173 15,276
Loss on disposal
of assets 0 0 418 0
VEBA litigation 0 60 0 60
New store opening
costs 98 0 485 376
Total costs
and expenses 202,575 223,881 646,515 673,740
Operating income
(loss) 4,523 16,536 (10,097) 13,741
Other (income) expense:
Interest expense 2,959 2,668 10,807 10,058
Miscellaneous income (102) (322) (489) (1,389)
2,857 2,346 10,318 8,669
Income (loss) before
income taxes 1,666 14,190 (20,415) 5,072
Income tax expense
(benefit) 533 5,318 (7,982) 1,631
Income (loss) from
continuing operations 1,133 8,872 (12,433) 3,441
Discontinued operations:
Loss from operation
of closed stores 0 0 0 (1,102)
Loss on store closures 0 0 0 (98)
Income tax benefit 0 0 0 408
Loss from discontinued
operations 0 0 0 (792)
Net income (loss) $1,133 $8,872 ($12,433) $2,649
Net income (loss) per
common share:
Basic
Income (loss) from
continuing operations $0.08 $0.66 ($0.91) $0.26
Loss from discontinued
operations $0.00 $0.00 $0.00 ($0.06)
Net income (loss)
per common share $0.08 $0.66 ($0.91) $0.20
Diluted
Income (loss) from
continuing operations $0.08 $0.64 ($0.91) $0.25
Loss from discontinued
operations $0.00 $0.00 $0.00 ($0.06)
Net income (loss)
per common share $0.08 $0.64 ($0.91) $0.19
Weighted average # of
common shares outstanding:
Basic 13,432 13,514 13,601 13,428
Diluted 13,493 13,885 13,601 13,758
GOTTSCHALKS INC.
CONDENSED BALANCE SHEETS
(In thousands)
(unaudited)
February 2, February 3,
2008 2007
ASSETS
CURRENT ASSETS:
Cash $4,032 $6,051
Receivables - net 7,049 8,198
Merchandise inventories 149,310 168,702
Other 18,984 19,421
Total current assets 179,375 202,372
PROPERTY AND EQUIPMENT - net 137,931 134,696
OTHER LONG-TERM ASSETS 14,688 12,998
$331,994 $350,066
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable and other
current liabilities $72,559 $83,395
Current portion of long-term obligations 1,525 1,676
Total current liabilities 74,084 85,071
REVOLVING LINE OF CREDIT 93,899 83,762
LONG-TERM OBLIGATIONS (less current portion) 12,049 13,592
DEFERRED INCOME TAXES AND OTHER 21,837 23,869
SUBORDINATED NOTE PAYABLE TO AFFILIATE 18,180 19,180
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY 111,945 124,592
$331,994 $350,066
SOURCE Gottschalks Inc.
