BBA Bombay CO

FORT WORTH, Texas, May 17 /PRNewswire-FirstCall/ -- The Bombay Company, Inc. (NYSE:BBA) reported that revenue for the quarter ended April 29, 2006 was $118.7 million compared to $122.1 million for the corresponding period of the prior year. Same store sales for stores open more than one year declined 1.2% for the thirteen-week period. Revenue from non-store activity, including Bailey Street Trading Company, Internet, Mail Order and International amounted to 6.7% of total revenue for the quarter compared to 7.5% for the first quarter of the prior year. Increases in revenue from our direct-to-customer business, driven primarily by Internet sales, and International wholesale operations partially offset the loss of revenue from the Bailey Street operations, the assets of which were sold during Fiscal 2005. The loss before income taxes for the quarter ended April 29, 2006 was $16.0 million compared to $13.5 million for the quarter ended April 30, 2005. The net loss for the quarter ended April 29, 2006 was $15.6 million or $0.43 per share compared to a net loss of $8.0 million or $0.22 per share for the same period last year. (Logo: http://www.newscom.com/cgi-bin/prnh/20051026/BOMBAYLOGO ) For the first quarter, revenue from retail stores decreased 2.0% from the first quarter of the prior year. Approximately half of the decrease was related to a net reduction in store count as we continued to implement our initiative of rationalizing the real estate portfolio, while the remainder related to the decline in same store sales. Revenue from Internet, International and mail order increased $2.4 million for the quarter partially offsetting the loss of revenue from Bailey Street, which totaled $3.6 million last year and contributed marginally to operating results. Gross margin for the first quarter declined 180 basis points versus prior year, primarily attributable to a 150 basis point decline in product margin. The decline in product margin was related to a larger portion of sales being generated by promotional activity particularly in the furniture area where the bedroom, dining room and KIDS categories had margin declines as a result of increased clearance activity. Buying and store occupancy costs decreased $0.5 million due to the lower store count and lower costs in off-mall locations, but increased from 23.5% of revenue to 23.7% of revenue as a result of lower same-store sales. For the quarter, four-wall operating margins for the off- mall core stores were approximately 700 basis points higher than the mall- based stores primarily as a result of the lower occupancy costs. Selling, general and administrative expenses decreased $0.3 million but were 33.5% of revenue during the first quarter compared to 32.8% in the year ago period, a 70 basis point increase, because of the deleveraging effect of fixed costs on the lower revenue base. Higher store payroll costs and increased advertising expenses have been offset by lower corporate SG&A costs. No tax benefits have been recorded for losses generated by the Company's U.S. operations during the current interim period, which effectively results in income being reported on a pre-tax basis compared to the prior year when tax benefits were reflected in connection with quarterly results. The income tax benefit reflected in the first quarter of Fiscal 2006 relates primarily to the Canada operations and results in an effective tax rate of 2.5%. The Company does not expect to recognize tax benefits associated with its U.S. operations during the current fiscal year. During the first quarter, the Company opened 4 stores, including one combination store, and closed 20 stores. We ended the quarter with a total of 482 stores compared to 495 stores at the end of the first quarter of Fiscal 2005; however, square footage declined a modest 0.5% due to the difference in sizes of the stores as we have migrated stores from mall to off-mall over the past twelve months. During the second quarter, the Company expects to open 3 stores and close approximately 10 to 14 stores. The year-end store count is expected to be in the range of 460 to 465 stores. James D. Carreker, Chairman and Chief Executive Officer, stated, "The overall environment for specialty home furnishings remains challenging. We saw a significant decline in traffic and business after Easter that adversely affected results. We continue to control expenses, investing in areas to drive business to remain competitive. We are testing national television broadcast on select cable networks during May and early June. We are tightly controlling our inventory levels and carefully managing liquidity and markdown levels in order to maintain flexibility. We enter the second quarter with an improved inventory content compared to last year and what we believe to be an improved assortment." In conjunction with this release, you are invited to listen to Bombay's conference call with management that will be conducted on Thursday, May 18, 2006 at 10:00 a.m. Central Time. The Company will review the first quarter and the outlook for Fiscal 2006. Interested parties should dial 212-676-5390 ten minutes prior to the start time. The call will also be broadcast live over the Internet at http://www.bombaycompany.com/. For those who are unable to listen to the live broadcast, a telephone replay will be available for 72 hours beginning at noon Central Time at 800-633-8284. The access code is 21274577. The call will also be available for replay for 45 days on the investor relations page of the Bombay website. The Bombay Company, Inc. designs, sources and markets a unique line of home accessories, wall decor and furniture through retail outlets, specialty catalogs and the internet in the U.S. and internationally. Any statements in this press release that may be considered forward- looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Those risks are described in the Company's public announcements, reports to stockholders and SEC filings, including but not limited to Reports on Forms 10-K, 8-K and 10-Q, copies of which are available from the SEC or may be obtained upon request from the Company. The Company undertakes no obligation to revise the forward-looking statements contained therein to reflect events or circumstances after the date hereof as a result of new information, future events or otherwise. THE BOMBAY COMPANY, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended April 29, April 30, 2006 2005 (as adjusted) Net revenue $118,664 $122,111 Costs and expense: Cost of sales, buying and occupancy costs 94,6500 95,200 Selling, general and administrative 39,764 40,059 Operating loss (15,750) (13,148) Interest income 37 8 Interest expense (244) (320) Loss before income taxes (15,957) (13,460) Income tax benefit (404) (5,491) Net loss ($15,553) ($7,969) Net loss per basic and diluted share ($0.43) ($0.22) Average common shares outstanding 36,438 35,939 Average common shares outstanding and dilutive potential common shares 36,438 35,939 OTHER SELECTED FINANCIAL DATA Capital expenditures, net of sales proceeds $1,775 $5,011 Depreciation and amortization expense $4,453 $4,371 Stores opened 4 17 Stores closed 20 24 Store composition: Core stores 375 393 BombayKIDS stores 62 55 Outlet stores 45 47 Total 482 495 Real estate type: Mall 221 252 Off-mall 216 196 Outlet stores 45 47 Total 482 495 Prior year amounts have been adjusted to reflect the retrospective application of Financial Accounting Standard Boards Staff Position No. FAS 13-1, Accounting for Rental Costs Incurred During a Construction Period. THE BOMBAY COMPANY, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except shares) (Unaudited) April 29, January 28, April 30, 2006 2006 2005 ASSETS (as adjusted) Current assets: Cash and cash equivalents $3,303 $4,015 $10,386 Inventories 127,862 128,719 151,549 Other current assets 14,820 14,846 32,783 Total current assets 145,985 147,580 194,718 Property and equipment, net 82,496 84,651 87,538 Deferred taxes 467 456 5,050 Goodwill, less amortization 423 423 423 Other assets 5,273 5,631 7,304 Total assets $234,644 $238,741 $295,033 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank borrowings $19,137 $-- $ 28,361 Accounts payable and accrued expenses 21,931 29,176 33,493 Gift certificates redeemable 8,971 9,224 7,558 Accrued payroll and bonuses 3,970 6,219 4,202 Accrued insurance 5,252 5,178 4,029 Customer deposits 6,366 4,526 3,903 Current portion of accrued rent 4,702 3,871 3,047 Other current liabilities 4,714 5,834 4,423 Total current liabilities 75,043 64,028 89,016 Accrued rent and other long term liabilities 38,469 38,976 34,895 Stockholders' equity: Preferred stock, $1 par value, 1,000,000 shares authorized -- -- -- Common stock, $1 par value, 50,000,000 shares authorized, 38,149,646 shares issued 38,150 38,150 38,150 Additional paid-in capital 79,990 79,817 79,743 Retained earnings 8,117 23,669 62,431 Accumulated other comprehensive income 2,427 2,077 801 Common shares in treasury, at cost, 1,716,569; 1,715,066 and 2,084,410 shares, respectively (7,035) (7,038) (8,554) Deferred compensation (517) (938) (1,449) Total stockholders' equity 121,132 135,737 171,122 Total liabilities and stockholders' equity $234,644 $238,741 $295,033 THE BOMBAY COMPANY, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited) Three Months Ended April 29, April 30, 2006 2005 (as adjusted) Cash flows from operating activities: Net loss ($15,553) ($7,969) Adjustments to reconcile net loss to net cash from operating activities: Depreciation and amortization 4,4532 4,371 Stock -based compensation expense 617 255 Deferred taxes and other (805) 683 Change in assets and liabilities: (Increase) decrease in other assets 68 (6,824) (Increase) decrease in inventories 1,212 (7,062) Decrease in current liabilities (8,925) (9,581) Increase (decrease) in noncurrent liabilities (720) 475 Landlord construction allowances 1,014 3,149 Net cash used in operating activities (18,639) (22,503) Cash flows from investing activities: Purchases of property and equipment (1,775) (5,011) Proceeds from sales of property and equipment -- -- Net cash used in investing activities (1,775) (5,011) Cash flows from financing activities: Net bank borrowings 19,137 28,361 Increase in outstanding checks in excess of cash balances 635 -- Sale of stock to employee benefit plans 4 6 Proceeds from the exercise of employee stock options 3 317 Net cash provided by financing activities 19,779 28,684 Effect of exchange rate change on cash (77) 48 Net increase (decrease) in cash and cash equivalents (712) 1,218 Cash and cash equivalents at beginning of period 4,015 9,168 Cash and cash equivalents at end of period $3,303 $10,386 Supplemental disclosure of cash flow information: Interest paid $117 $ 274 Income taxes paid 28 241 Non-cash investing and financing activities: Distributions of restricted stock 18 372 Distribution of director fees -- 52 http://www.newscom.com/cgi-bin/prnh/20051026/BOMBAYLOGO http://photoarchive.ap.org/ DATASOURCE: The Bombay Company, Inc. CONTACT: Elaine D. Crowley, Sr. Vice President, Chief Financial Officer of The Bombay Company, Inc., +1-817-347-8200 Web site: http://www.bombaycompany.com/

Copyright