GDYS Goodys Family Clothing (MM)

KNOXVILLE, Tenn., Nov. 22 /PRNewswire-FirstCall/ -- Goody's Family Clothing, Inc. (NASDAQ:GDYS) today reported a net loss of $23,475,000, or ($0.71) per share, for the 13 weeks ended October 29, 2005, compared with a net loss of $816,000, or ($0.02) per share, for the 13 weeks ended October 30, 2004. The net loss for the 13 weeks ended October 29, 2005, includes approximately $15.5 million in transaction expenses, which are not deductible for income tax purposes, principally consisting of termination fees and expenses payable to the prior suitor in connection with the Company's receipt of a superior acquisition proposal. Total sales for the third quarter of fiscal 2005 increased 3.7% to $295,210,000 compared with $284,794,000 during the same period last year. Comparable store sales for the third quarter of fiscal 2005 were down 0.9% from the same period last year. For the 39 weeks ended October 29, 2005, the Company reported a net loss of $30,677,000, or ($0.93) per share, inclusive of the transaction expenses noted above, compared with net earnings of $8,533,000, or $0.25 per diluted share, for the 39 weeks ended October 30, 2004. Total sales for the first nine months of fiscal 2005 declined 0.3% to $879,583,000 compared with $882,304,000 during the same period last year. Comparable store sales for the first nine months of fiscal 2005 decreased 5.3% from the same period last year. With the opening of six new stores on November 17, the Company has now opened 31 new stores and relocated or remodeled nine stores thus far in fiscal 2005, which concludes its store opening plans for the fiscal year. During November, the Company also re-opened four stores that had been closed due to the recent hurricanes. One storm-damaged store remains closed, but it is scheduled to re-open in 2006. The Company will not achieve its previously announced business plan for fiscal 2005, which included guidance for comparable store sales, gross profit rate including occupancy expenses, and selling, general and administrative expenses. As a result of the pending sale of the Company, the Company ceased providing such financial guidance, including regular quarter-end conference calls. As previously disclosed, the merger agreement also prohibits the declaration of future dividends. This press release contains certain forward-looking statements which are based upon current expectations relating to the expected timing and scope of the Merger Agreement and these statements involve material risks and uncertainties including, but not limited to: (i) that such number of shares are tendered, which, together with the shares beneficially owned by GMM and Prentice, equal at least 51% of the Company's fully diluted shares; (ii) that there be no event or occurrence which would have a material adverse effect on the Company that would allow Parent or Acquisition Corp. to terminate the Merger Agreement; (iii) that there be no law, order or injunction that would affect the ability of the parties to consummate the tender offer; (iv) that there be no action by a governmental authority challenging the Transaction; (v) that the Company comply with its covenants and not have breached its representations and warranties (subject to applicable materiality qualifiers); and, (vi) certain other conditions to be met by the Company; Readers are cautioned that any such forward-looking statement is not a guarantee of future performance and involves risks and uncertainties, and that actual results may differ materially from those projected in the forward- looking statements. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the Company's financial results may be found in the Company's 2004 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Certain of such filings may be accessed through the Company's web site, http://www.goodysonline.com/, then choose "SEC Filings." Goody's, headquartered in Knoxville, Tennessee, is a retailer of moderately priced family apparel. After the anticipated closure of one store by the end of November 2005, the Company will be operating 381 stores (371 at October 29, 2005, compared with 352 October 30, 2004) in the 21 states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia. GOODY'S FAMILY CLOTHING, INC. Unaudited Consolidated Statements of Operations (In thousands, except per share amounts) 13 Weeks Ended 39 Weeks Ended ------------------- ------------------- Oct. 29, Oct. 30, Oct. 29, Oct. 30, 2005 2004 2005 2004 -------- -------- -------- -------- Sales $295,210 $284,794 $879,583 $882,304 Cost of sales and occupancy expenses 213,490 200,476 633,064 616,125 -------- -------- -------- -------- Gross profit 81,720 84,318 246,519 266,179 Selling, general and administrative ("SG&A") expenses (before transaction expenses) 90,846 85,908 268,683 253,129 Transaction expenses 15,526 -- 15,526 -- -------- -------- -------- -------- Total SG&A expenses 106,372 85,908 284,209 253,129 (Loss) earnings from operations (24,652) (1,590) (37,690) 13,050 Investment income 384 291 1,225 682 Interest expense 40 2 51 133 -------- -------- -------- -------- (Loss) earnings before income taxes (24,308) (1,301) (36,516) 13,599 (Benefit) provision for income taxes (833) (485) (5,839) 5,066 -------- -------- -------- -------- Net (loss) earnings $(23,475) $ (816) $(30,677) $ 8,533 ======== ======== ======== ======== (Loss) earnings per common share: Basic $ (0.71) $ (0.02) $ (0.93) $ 0.26 ======== ======== ======== ======== Diluted $ (0.71) $ (0.02) $ (0.93) $ 0.25 ======== ======== ======== ======== Cash dividends declared per common share: $ -- $ 0.03 $ 0.06 $ 0.08 ======== ======== ======== ======== Weighted average common shares outstanding: Basic 33,122 32,915 33,026 32,923 ======== ======== ======== ======== Diluted 33,122 32,915 33,026 33,812 ======== ======== ======== ======== DATASOURCE: Goody's Family Clothing, Inc. CONTACT: Edward R. Carlin, Chief Financial Officer of Goody's Family Clothing, Inc., +1-865-966-2000 Web site: http://www.goodysonline.com/

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