United Retail Group Announces Fourth Quarter and Fiscal 2003 Operating Results
ROCHELLE PARK, N.J.--Feb. 1, 20048, 2004--United Retail Group, Inc. today announced operating results for the fourth quarter and fiscal year ended January 31, 2004.Fourth quarter net sales were $101.4 million compared to $105.7 million in the prior year period. Comparable store sales decreased 2%. The balance of the decline was the result of fewer stores and the suspension of catalog mailings in March 2003.
Net losses were $4.0 million, or $0.31 per share, this year versus $16.1 million, or $1.24 per share, in the comparable quarter last year. Excluding a non-cash tax valuation allowance, net loss for the fourth quarter of fiscal 2003 was $1.8 million, or $0.14 per share. Excluding a non-cash tax valuation allowance and a non-cash charge of $5.6 million associated with goodwill impairment, net loss for the fourth quarter of fiscal 2002 was $3.2 million, or $0.25 per share.
For the fiscal year, net sales were $396.3 compared to $432.0 million in the previous year. Comparable store sales decreased 7%. Net losses were $19.1 million, or $1.47 per share, for fiscal 2003 and $23.1 million, or $1.77 per share, for fiscal 2002. Excluding the annual non-cash tax valuation allowance, net loss was $10.1 million, or $0.78 per share, for fiscal 2003. Excluding an annual non-cash tax valuation allowance and the non-cash charge of $5.6 million associated with goodwill impairment, net loss was $10.2 million, or $0.78 per share, for fiscal 2002.
Raphael Benaroya, the Company's Chairman, President and Chief Executive Officer, commented, "2003 was a year of transition for the business. We worked to implement the repositioning strategy that we announced early in the year. As part of this strategy, we are transforming the product composition and rationalizing our vendor base accordingly. In addition, we slowed capital expenditures and improved inventory management to yield faster turns. We remain committed to this strategy."
"While this is still a work in progress, we have begun to see results. By year-end we had sold through our old assortment and had 20% less inventory than a year ago. The Spring product offering is fresh. As we begin 2004, we believe the business is better prepared to capitalize on the economic upturn."
George R. Remeta, the Company's Vice Chairman and Chief Administrative Officer, commented: "One of the highlights of the fourth quarter was the expansion and extension of our revolving credit facility. We are pleased with our strong business partnership with CIT. The new arrangement enhances our financial flexibility as we move forward."
United Retail Group, Inc. invites investors to listen to a broadcast of the Company's conference call to discuss fourth quarter results as well as ongoing corporate developments. The call will be broadcast live over the Internet on Wednesday, February 18, 2004 at 11:30 a.m. (Eastern Standard 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 February 28, 2004. 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 535 AVENUE(R) stores with 2,327,000 square feet of selling space, as well as the AVENUE.COM website at http://www.avenue.com.
UNITED RETAIL GROUP, INC.
-------------------------
4TH QTR 2003
(000'S) 13 weeks ended
-------------------------------
(Unaudited) (Unaudited)
January 31, February 1, Percent
2004 2003 + or -
-------------------------------
Net sales $101,410 $105,697 -4.1%
Cost of goods sold, including
buying and occupancy costs 80,555 86,534 -6.9%
-------------------------------
Gross profit 20,855 19,163 8.8%
General, administrative and store
operating expenses 25,649 26,331 -2.6%
Goodwill impairment - 5,611 -
-------------------------------
Operating loss (4,794) (12,779) -
Interest expense, net 203 228 -
-------------------------------
Loss before income taxes (4,997) (13,007) -
(Benefit from) provision for income
taxes (1) (965) 3,075 -
-------------------------------
Net loss ($4,032) ($16,082) -
===============================
Weighted average shares outstanding:
Basic 12,937 12,937
Diluted 12,937 12,937
Net loss per common share:
Basic ($0.31) ($1.24)
Diluted ($0.31) ($1.24)
Net loss per diluted common share
excluding special charges (2) ($0.14) ($0.25)
52 weeks ended
-------------------------------
(Unaudited)
January 31, February 1, Percent
2004 2003 + or -
-------------------------------
Net sales $396,265 $431,964 -8.3%
Cost of goods sold, including
buying and occupancy costs 313,767 343,625 -8.7%
-------------------------------
Gross profit 82,498 88,339 -6.6%
General, administrative and store
operating expenses 101,287 105,499 -4.0%
Goodwill impairment - 5,611 -
-------------------------------
Operating loss (18,789) (22,771) -
Interest expense, net 917 827 -
-------------------------------
Loss before income taxes (19,706) (23,598) -
(Benefit from) provision for income
taxes (1) (636) (521) -
-------------------------------
Net loss ($19,070) ($23,077) -
===============================
Weighted average shares outstanding:
Basic 12,937 13,047
Diluted 12,937 13,047
Net loss per common share:
Basic ($1.47) ($1.77)
Diluted ($1.47) ($1.77)
Net loss per diluted common share
excluding special charges (2) ($0.78) ($0.78)
(1) Includes a valuation allowance for the thirteen weeks ended
January 31, 2004 and February 1, 2003 of $2.3 million and $7.3
million, respectively, and for the fifty-two weeks ended January
31, 2004 and February 1, 2003 of $9.0 million and $7.3 million,
respectively, related to deferred tax assets and net operating
loss carryforwards.
(2) Special charges are composed of goodwill impairment and valuation
allowance in footnote 1.
======================================================================
Consolidated Condensed
---------------------- (Unaudited)
Balance Sheets January 31, February 1,
-------------- 2004 2003
-----------------------
Assets
------
Cash and cash equivalents $14,421 $17,540
Inventory 49,054 61,569
Other 8,659 10,256
-----------------------
Total current assets $72,134 $89,365
Property and equipment, net 76,710 87,720
Other assets 6,851 5,975
-----------------------
Total assets $155,695 $183,060
=======================
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities $55,787 $63,724
Long-term distribution center financing 3,326 3,961
Long-term capital leases 3,646 5,764
Other non-current liabilities 12,916 10,616
Stockholders' equity 80,020 98,995
-----------------------
Total liabilities and
stockholders' equity $155,695 $183,060
=======================
At January 31, 2004, the borrowing capacity of the Company under the
Financing Agreement with The CIT Group/Business Credit, Inc. ("CIT")
was $8.3 million, trade letters of credit for the account of the
Company were outstanding in the amount of $27.5 million, standby
letters of credit were outstanding in the amount of $5.5 million and
no loan from CIT was outstanding. The Company's cash on hand was
unrestricted.
======================================================================
Statistics 13 weeks ended 52 weeks ended
---------- ---------------------- ----------------------
(Unaudited)(Unaudited) (Unaudited)(Unaudited)
Store Count Jan. 31, Feb. 1, Jan. 31, Feb. 1,
----------- 2004 2003 2004 2003
---------------------- ----------------------
Beginning of
period 545 557 553 555
New 1 6 5 24
Reopened 1 0 1 0
Closed (12) (10) (24) (26)
End of period 535 553 535 553
Selling Square
Footage (000's)
----------------
Beginning of
period 2,365 2,402 2,394 2,367
New / Expansion
/ Reopened 9 28 26 124
Closed (47) (36) (93) (97)
End of period 2,327 2,394 2,327 2,394
Average 2,365 2,421 2,369 2,387