PHILADELPHIA, March 15 /PRNewswire/ -- Richard A. Hayne, Chairman of the Board and President of Urban Outfitters, Inc. (Nasdaq: URBN), today announced sales and earnings for the fourth quarter and the fiscal year ended January 31, 2001 ("FY 2001"). The results incorporate the newly adopted FASB requirements for accounting for shipping and handling fees and expenses for all periods presented. Net sales for the quarter were up 13% to $85.6 million from $75.4 million for the comparable quarter last year. Net sales growth was achieved principally from the contributions of noncomparable and new stores as comparable store sales for the quarter decreased 3%. In addition, the Company's direct response sales increased by 28% over the comparable quarter last year as a result of a 49% increase in circulation of its Anthropologie catalog, additional Anthropologie e-commerce sales and sales generated by the Urban web site which first launched in May 2000. Wholesale sales increased 28% for the same period due to the timing of Fall and Holiday customer shipments. Net sales for the twelve months ended January 31, 2001 were up 6% to $295.3 million versus $278.1 million during the same twelve months in the prior year. Comparable store sales for the twelve months of FY 2001 decreased 7% in contrast with last year's 10% comparable store sales gain for the same period. This comparable store sales decrease was more than offset by increases in sales from noncomparable and new stores and increases in direct response sales principally due to a 44% increase in circulation of the Company's Anthropologie catalog. Net income for the quarter was $3.4 million or $0.20 per diluted share versus $5.5 million or $0.31 per diluted share for the comparable quarter last year. Net income for the twelve months ended January 31, 2001 was $10.5 million or $0.61 per diluted share versus $18.7 million or $1.05 per diluted share for the comparable period last year. "We made it a priority in the fourth quarter to bring our inventories in line," said Mr. Hayne. "In doing so, the resulting clearance markdowns we experienced reduced fourth quarter margins. Our current store inventory mix of Spring goods is on plan." Fourth Qtr. Twelve Months FY 2001 FY 2001 (In thousands) Retail store sales: FY2000 comparable store base $ 60,636 $206,839 Comp store decreases (1,723) (15,267) Sales of noncomparable and new stores 14,666 61,486 $ 73,579 $253,058 Direct response (catalog and e-commerce) 7,631 21,666 Total retail segment 81,210 274,724 Wholesale sales 4,354 20,609 Total net sales $ 85,564 $295,333 During the fiscal year, the Company opened five new Urban Retail stores and six new Anthropologie stores. In addition, thus far during FY 2002, the Company has opened two new Urban Retail stores located in Providence, RI and Dallas, TX. Management plans to open six to eight additional new stores during FY 2002. For the quarter and twelve months, the Company's gross profit margin percentages decreased versus the comparable periods last year. Retail clearance markdowns to move seasonal merchandise reduced gross margins, expressed as percentages of sales, by 2.7% for the quarter and by 2.4% for the year. The impact of occupancy costs as a result of the negative comparable store sales results and increased occupancy costs of noncomparable and new stores accounted for the remainder of the margin decline. Total inventories at January 31, 2001 increased by 29% versus the same date last year, principally attributable to new store requirements. Comparable store inventories were flat versus the prior year. Selling, general and administrative expenses expressed as percentages of sales for the quarter and twelve months increased versus the comparable periods in the prior year. Noncomparable and new stores, with lower average sales volumes, have higher proportionate expenses than comparable stores and accounted for the majority of the increase in dollars. For the quarter, the Company's cost control efforts in its retail store operations offset the deleveraging impact of the comparable store sales decreases. For the fiscal year, these cost control efforts were able to offset only a portion of the impact of the comparable store sales decreases and the effect of noncomparable and new stores. Anthropologie direct response operations experienced an increase in operating expense percentages for the quarter and the twelve months primarily due to the deleveraging of catalog production costs caused by a reduced response rate to increased catalog circulation. Additionally, start-up costs were incurred for the design, production and administration of the Urban e-commerce web site (www.urbn.com) which launched in May 2000. During the fourth quarter, the Company was required to adopt the Financial Accounting Standards Board (FASB) Emerging Issues Task Force Issue "Accounting for Shipping and Handling Fees and Costs" (EITF 00-10). Accordingly, shipping and handling revenue, which had previously been offset against such costs in cost of sales for direct response (catalog and e-commerce) transactions, or offset against store level costs within selling, general and administrative expenses, are now reclassified into net sales and all such related costs are included in cost of sales. This reclassification had no effect on income from operations or net income, but it did require a restatement of net sales, cost of sales, gross profit and selling, general and administrative expenses. A schedule providing the restatement of all comparative prior period financial statements for the last three fiscal years will be issued following this release. The Company planned its comparable store sales in the first quarter of FY 2002 in the negative low single digit range and Wholesale sales to be below last year's levels. Earnings for the first quarter were planned to be less than last year's $0.17 per diluted share. Results thus far are slightly below plan. For the full fiscal year, the Company has planned for low single digit comparable store sales gains. If achieved, annual earnings per share would increase substantially over FY 2001 levels. Management currently believes these annual results are achievable. Urban Outfitters, Inc. is an innovative specialty retailer and wholesaler which offers a variety of lifestyle merchandise to highly defined customer niches through 44 Urban Retail stores in the United States, Canada, the United Kingdom, and Ireland; an Urban web site, www.urbn.com ; 26 Anthropologie stores in the United States; an Anthropologie catalog and web site, www.anthropologie.com ; and a wholesale subsidiary which sells to the Company's retail operations, and to more than 1,300 specialty stores, catalogs and department stores. A conference call will be held today to discuss fourth quarter and annual results and will be web cast on www.vcall.com/NASApp/VCall/EventPage?ID=68886 at 11:00 a.m. EST today. This news release is being made pursuant to the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995 -- Certain matters contained in this news release may constitute forward-looking statements. Any one, or all, of the following factors could cause actual financial results to differ materially from those financial results mentioned in the forward-looking statements: industry competition factors, unavailability of suitable retail space for expansion, difficulty in predicting and responding to fashion trend shifts, seasonal fluctuations in gross sales, the departure of one or more key senior managers and other risks identified in filings with the Securities and Exchange Commission. The Company disclaims any intent or obligation to update forward-looking statements. URBAN OUTFITTERS, INC. Condensed Consolidated Statements of Income (in thousands, except share and per share data) (Unaudited) Three Months Ended Twelve Months Ended January 31, January 31, 2001 2000 2001 2000 Net sales $85,564 $75,419 $295,333 $ 278,113 Cost of sales, including certain buying, distribution and occupancy costs 57,880 47,326 200,002 173,459 Gross profit 27,684 28,093 95,331 104,654 Selling, general and administrative expenses 21,975 18,695 77,453 67,089 Income from operations 5,709 9,398 17,878 37,565 Other income (expenses), net 63 141 (91) (2,716) Income before income taxes 5,772 9,539 17,787 34,849 Income tax expense 2,365 4,006 7,292 16,169 Net income $3,407 $5,533 $10,495 $18,680 Net income per common share: Basic $0.20 $0.31 $0.61 $1.07 Diluted $0.20 $0.31 $0.61 $1.05 Weighted average common shares outstanding: Basic 17,253,486 17,578,664 17,257,186 17,531,971 Diluted 17,256,715 17,889,378 17,274,830 17,844,356 PERCENT OF SALES Net sales 100.0% 100.0% 100.0% 100.0% Cost of sales, including certain buying, distribution and occupancy costs 67.6% 62.7% 67.7% 62.4% Gross profit 32.4% 37.3% 32.3% 37.6% Selling, general and administrative expenses 25.7% 24.8% 26.2% 24.1% Income from operations 6.7% 12.5% 6.1% 13.5% Other income (expenses), net -- 0.1% -- (1.0%) Income before income taxes 6.7% 12.6% 6.1% 12.5% Income tax expense 2.7% 5.3% 2.5% 5.8% Net income 4.0% 7.3% 3.6% 6.7% URBAN OUTFITTERS, INC. Condensed Consolidated Balance Sheets (in thousands, except share and per share data) (Unaudited) January 31, 2001 2000 Assets Current assets: Cash and cash equivalents $16,286 $12,727 Marketable securities 314 11,225 Accounts receivable, net of allowance for doubtful accounts of $500 and $518, respectively 3,444 4,825 Inventories 34,786 26,868 Prepaid expenses and other current assets 10,143 10,433 Total current assets 64,973 66,078 Property and equipment, net 97,901 72,819 Marketable securities -- 8,646 Other assets 5,842 5,958 $168,716 $153,501 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $19,387 $16,760 Accrued expenses and other current liabilities 13,931 11,312 Total current liabilities 33,318 28,072 Deferred rent 5,786 4,513 Total liabilities 39,104 32,585 Shareholders' equity: Preferred shares; $.0001 par value, 10,000,000 authorized, none issued -- -- Common shares; $.0001 par value, 50,000,000 shares authorized, 17,253,486 and 17,358,186 issued and outstanding, respectively 2 2 Additional paid-in capital 16,268 17,680 Retained earnings 114,109 103,614 Accumulated other comprehensive loss (767) (380) Total shareholders' equity 129,612 120,916 $168,716 $153,501 URBAN OUTFITTERS, INC. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) Twelve Months Ended January 31, 2001 2000 Cash flows from operating activities: Net income $10,495 $18,680 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,997 8,667 Provision for losses of MXG Media, Inc. -- 4,354 Changes in assets and liabilities: Decrease (increase) in receivables 1,381 (1) Increase in inventories (7,918) (4,987) Decrease (increase) in prepaid expenses and other assets 406 (6,968) Increase in payables, accrued expenses and other liabilities 6,519 4,516 Net cash provided by operating activities 22,880 24,261 Cash flows from investing activities: Capital expenditures (36,877) (38,149) Purchases of marketable securities (600) (12,159) Sales and maturities of marketable securities 19,930 17,267 Advances to MXG Media, Inc. -- (8,150) Repayment of advances by MXG Media, Inc. -- 7,550 Net cash used in investing activities (17,547) (33,641) Cash flows from financing activities: Exercise of stock options -- 5,570 Purchases and retirement of common stock (1,412) ( 8,715) Net cash used in financing activities (1,412) (3,145) Effect of exchange rate changes on cash and cash equivalents (362) 87 Increase (decrease) in cash and cash equivalents 3,559 (12,438) Cash and cash equivalents at beginning of period 12,727 25,165 Cash and cash equivalents at end of period $ 16,286 $ 12,727
SOURCE Urban Outfitters, Inc.