Restoration Hardware, Inc. Reports First Quarter Fiscal 2004 Results
CORTE MADERA, Calif., May 20 /PRNewswire-FirstCall/ -- Restoration Hardware, Inc. (Nasdaq: RSTO) today announced its financial results for the first quarter ended May 1, 2004.
-- Net results for the first quarter of fiscal 2004 improved to a net loss of $4.0 million ($0.12 per share) as compared to a net loss of $5.2 million ($0.17 per share) in the first quarter of the prior year. Results were better than the prior Company guidance of a loss in the range of $0.13 to $0.16 per share. -- Net revenue increased 21% to $98.9 million for the first quarter of fiscal 2004, versus net revenue of $81.8 million for the same period last year. -- Comparable store sales for the first quarter of fiscal 2004 increased 9.0%, on top of an 11.9% increase in the first quarter of fiscal 2003. -- Net revenue for the direct-to-customer division increased 94% to $21.9 million in the first quarter of fiscal 2004, on top of a 72% increase in the same period in the prior year. -- Operating results improved to a loss of $6.1 million for the first quarter of fiscal 2004, versus a loss of $8.1 million in last year's first quarter.
Gary Friedman, the Company's President and CEO, stated, "We are pleased with our overall performance in the first quarter. Our results were substantially improved with sales in all channels showing impressive gains. Our comparable store sales increased 9.0% on top of an 11.9% increase in first quarter last year. That, coupled with a 94% increase in our direct-to-customer division revenue on top of a 72% increase in the prior year's first quarter, reflects the customers' response to our strategy of building predictable core businesses and the growing strength of our brand."
The Company remains comfortable with its prior full year fiscal 2004 guidance and provides the following guidance for the second quarter of fiscal 2004:
-- Comparable store sales in the range of low to mid single digits on top of a 9.9% increase in the prior year's second quarter. -- Direct-to-customer net revenue increase of 60% to 70% on top of a 46% increase in the same quarter in the prior year. -- Net loss in the range of $0.06 to $0.07 per share versus a loss per share of $0.09 in the second quarter of the prior year. Conference Call:
The Company's first quarter fiscal 2004 earnings conference call is scheduled for Thursday, May 20, 2004 at 5:00 p.m. Eastern Time. The dial-in number is 800-362-0571. A live webcast is available at http://www.firstcallevents.com/service/ajwz406480014gf12.html . If you are unable to participate during the live webcast, a playback of the conference call will be available via the Internet at http://www.firstcallevents.com/service/ajwz406480014gf12.html beginning at 7:00 p.m. Eastern Time on Thursday, May 20, 2004. A webcast replay of the call will be available at www.restorationhardware.com under "Company Info- Investor Relations-Event Calendar" until May 20, 2005.
About Restoration Hardware, Inc.:
Restoration Hardware, Inc. is a specialty retailer of high quality home furnishings, bath fixtures and bath ware, functional and decorative hardware and related merchandise that reflects the Company's classic and authentic American point of view. Restoration Hardware, Inc. sells its merchandise offering through its retail stores, catalog (800-762-1005) and on-line at www.restorationhardware.com. As of May 20, 2004 the Company operated 102 retail stores in 30 states, the District of Columbia and Canada.
Safe Harbor Statement under the Private Securities Litigation Reform Act
This release contains forward-looking statements that involve known and unknown risks. Such forward-looking statements include, without limitation, statements concerning or relating to implications of the Company's revenues and financial results for the first quarter ended May 1, 2004, statements concerning guidance for the second quarter and full year fiscal 2004, statements relating to implications of customers' responses to the Company's financial results in connection with the Company's strategy of building predictable core businesses and the growing strength of the Company's brand, and other statements containing words such as "plans," "estimates," "expects," and words of similar import or statements of management's opinion. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, including financial results, market performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward- looking statements. Important factors that could cause such differences include, but are not limited to, customer reactions to the Company's current and anticipated merchandising and marketing programs and strategies, timely introduction and customer acceptance of the Company's merchandise, continued positive customer reaction to the Company's catalog and Internet offerings, revised product mix, prototype stores and core businesses, timely and effective sourcing of the Company's merchandise from its foreign and domestic vendors and delivery of merchandise through its supply chain to its stores and customers, effective inventory and catalog management, changes in investor perceptions of the Company, fluctuations in comparable store sales, limitations resulting from restrictive covenants in the Company's credit facility, changes in economic or business conditions in general, changes in political conditions in the United States and abroad in general, changes in product supply, changes in the competitive environment in which the Company operates, changes in the Company's management information needs, changes in customer needs and expectations, governmental actions and other factors detailed in the Company's filings with the Securities and Exchange Commission, including its recent filings on Forms 10-K, 10-Q and 8-K, including, but not limited to, those described in the Company's Form 10-K for the fiscal year ended January 31, 2004 in Part I, Item 1 thereof ("Business") under the captions "Competition" and "Factors that May Affect our Future Operating Results," in Part II, Item 7 thereof ("Management's Discussion and Analysis of Financial Condition and Results of Operations") under the captions "Liquidity and Capital Resources," and "Critical Accounting Policies" and in Part II, Item 9A thereof ("Controls and Procedures"). Guidance offered by the Company represents a point-in-time estimate made by management of the Company. The Company undertakes no obligation to update any guidance or any other forward- looking statements in order to reflect events or circumstances that may arise after the date of this release.
RESTORATION HARDWARE, INC. STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED) (in thousands, except per share and store data) 13 weeks ended 13 weeks ended % of % of 5/1/04 Revenue 5/3/03 Revenue Retail net revenue $76,997 77.9% $70,475 86.2% Direct-to-customer net revenue 21,861 22.1% 11,291 13.8% Total net revenue 98,858 100.0% 81,766 100.0% Cost of revenue and occupancy 71,443 72.3% 61,825 75.6% Gross profit 27,415 27.7% 19,941 24.4% Selling, general and administrative expense 33,516 33.9% 28,029 34.3% Loss from operations (6,101) -6.2% (8,088) -9.9% Interest expense, net (427) -0.4% (562) -0.7% Loss before income taxes (6,528) -6.6% (8,650) -10.6% Income tax benefit 2,546 2.6% 3,460 4.3% Net loss $(3,982) -4.0% $(5,190) -6.3% Comparable store sales growth 9.0% 11.9% Stores open at end of period 102 105 Total selling square footage 672,604 688,634 Loss per share, basic and diluted $(0.12) $(0.17) Weighted average shares, basic and diluted 32,791 30,052 RESTORATION HARDWARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands) 5/1/04 1/31/04 5/3/03 ASSETS Current assets: Cash and cash equivalents $2,550 $2,003 $1,814 Accounts receivable 5,863 5,745 3,989 Merchandise inventories 117,786 102,926 100,023 Prepaid expense and other current assets 16,263 16,968 12,306 Total current assets 142,462 127,642 118,132 Property and equipment, net 80,843 83,518 86,023 Goodwill 4,560 4,560 4,560 Other long-term assets 19,321 16,560 21,449 Total assets $247,186 $232,280 $230,164 LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $41,656 $45,292 $33,061 Line of credit, net of debt issuance costs 34,384 10,286 27,250 Deferred revenue and customer deposits 7,068 7,231 5,073 Other current liabilities 11,394 11,438 8,659 Total current liabilities 94,502 74,247 74,043 Deferred lease incentives 32,555 33,999 37,290 Deferred rent 14,470 14,455 14,324 Other long-term liabilities 301 352 109 Total liabilities 141,828 123,053 125,766 Series A redeemable convertible preferred stock 8,471 8,541 13,328 Common stock and additional paid-in capital 158,407 158,177 151,938 Unearned compensation (133) (234) (534) Accumulated other comprehensive income 892 1,040 211 Accumulated deficit (62,279) (58,297) (60,545) Total stockholders' equity 96,887 100,686 91,070 Total liabilities, redeemable convertible preferred stock and stockholders' equity $247,186 $232,280 $230,164 Shares issued and outstanding at end of period 32,848 32,768 30,055
SOURCE Restoration Hardware, Inc. -0- 05/20/2004 /CONTACT: Patricia McKay, Executive Vice President & Chief Financial Officer of Restoration Hardware, Inc., +1-415-924-1005, or fax, +1-415-927-7264/ /Web site: http://www.restorationhardware.com / (RSTO) CO: Restoration Hardware, Inc. ST: California IN: REA CST SU: ERN ERP CCA ND-HD -- SFTH072 -- 7110 05/20/2004 16:01 EDT http://www.prnewswire.com