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ST. LOUIS, Jan. 20 /PRNewswire-FirstCall/ -- CPI Corp. (NYSE: CPY) today
announced its fourth quarter-to-date sales comparisons for the eight weeks
ended January 7, 2006 compared to the eight weeks ended January 8, 2005.
Total reported net sales for the eight-week period ended January 7, 2006
represent an approximate 1% increase over the comparable eight-week period of
fiscal 2004, which ended on January 8, 2005. This increase was the result of
a 24% increase in average sale per customer sitting partially offset by a
19% decline in customer sittings.
Fourth quarter-to-date reported sales for 2005 were negatively impacted by
approximately 7% due to customary adjustments required to reflect sales in
accordance with the Companys revenue recognition policy. This policy
requires sales to be recorded when portraits are delivered to customers rather
than at the time of the customer sitting when the amounts due from the session
are generally collected. As discussed in previous releases, the Companys
digital conversion has accelerated delivery of portraits and consequently
reduced deferrals of portrait sales to subsequent accounting periods. Since
the latter part of the third quarter is historically a high volume period, the
lower deferral of revenues into the fourth quarter versus last year had a
positive effect on reported third quarter sales and a corresponding negative
effect on reported fourth quarter sales.
The Companys disclosure of 2005 holiday sales continues a practice
commenced following the 2004 holiday season in recognition of the importance
of holiday sales to the Companys annual performance. Final results for the
Companys fiscal year 2005, which ends February 4, 2006, will be reported in
early April 2006.
Receipt of Financing Commitments
The Company has recently received financing commitments from two banks to
amend and restate its existing credit facility to provide for a $50 million
credit facility composed of a three-year, $25 million term loan (to replace an
existing $18 million loan) and a $25 million revolving line of credit. The
commitments are subject to the completion of definitive documentation and
other customary closing conditions.
In addition, the lead lender under the aforementioned facility has also
provided the Company with a best-efforts commitment to expand the term loan
portion of the facility, at the option of the Company, by up to $15 million or
a total of $40 million during 2006.
As previously announced, the Company commenced a Dutch auction self-tender
offer on December 30, 2005 whereby it offered to purchase up to 1,500,000 of
its common shares at a price per share ranging from a low of $17 to a high of
$20. Assuming the tender offer is fully subscribed and that the $50 million
credit facility discussed above is completed prior to the required funding
date of the tender offer, the Company anticipates funding the purchase of the
shares in the tender offer through anticipated cash on hand plus the
$7 million incremental term loan proceeds from the planned refinancing.
CPI is a portrait photography company offering photography services in the
United States, Puerto Rico and Canada through Sears Portrait Studios. The
Company also operates searsphotos.com, the vehicle for the Companys customers
to archive, share portraits via email and order additional portraits and
products.
This press release is for informational purposes only and is not an offer
to buy or the solicitation of an offer to sell any shares of CPIs common
stock. The solicitation of offers to buy shares of CPI common stock will only
be made pursuant to the Offer to Purchase and related materials that CPI
mailed to its stockholders on December 30, 2005. Stockholders should read
those materials carefully because they contain important information,
including the various terms of, and conditions to, the offer. Stockholders can
obtain the Offer to Purchase and related materials for free at the SECs
website at http://www.sec.gov or from our information agent, Georgeson
Shareholder Communications, Inc., by calling toll-free (877) 255-0124. We urge
stockholders to carefully read those materials prior to making any decisions
with respect to the tender offer.
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