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-- Authorizes Additional Share Repurchase Program --
COLUMBUS, Ohio, Nov. 17 /PRNewswire-FirstCall/ -- Limited Brands
(NYSE: LTD) today reported 2005 third quarter results.
Third Quarter Results
On a reported basis, the Company lost $0.03 per share for the third
quarter compared to earnings of $0.16 per share last year. Last years result
includes a gain of $0.06 per share related to the New York & Company initial
public offering and a $0.03 per share tax benefit primarily from the favorable
settlement of state tax matters. Operating income was $2.7 million compared to
$53.1 million last year, and net (loss) income was ($12.3) million compared to
$78.3 million last year.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020520/CLM001LOGO )
On an adjusted basis, the Company lost $0.03 per share for the third
quarter compared to earnings of $0.10 per share last year, operating income
was $2.7 million compared to $53.1 million last year, and net (loss) income
was ($12.3) million compared to $49.7 million last year. Last years result
includes a $0.03 per share tax benefit primarily from the favorable settlement
of state tax matters.
Comparable store sales for the quarter ended October 29, 2005 decreased 3%
and net sales of $1.892 billion were flat compared to sales of $1.891 billion
last year.
Year-to-Date Results
On a reported basis, earnings per share were $0.30 for the nine months
ended October 29, 2005 compared to $0.66 last year. Operating income was
$254.8 million compared to $399.5 million last year, and net income was $123.9
million compared to $322.9 million last year.
On an adjusted basis, year-to-date earnings per share were $0.30 compared
to $0.52 last year, operating income was $254.8 million compared to $399.5
million last year, and net income was $123.9 million compared to $254.8
million last year.
Comparable store sales for the nine months ended October 29, 2005
decreased 3% and net sales of $6.157 billion increased 1% compared to sales of
$6.080 billion last year.
Share Repurchase Program
The Company repurchased $33 million of shares under its existing $100
million program during the third quarter, bringing the total dollar amount of
shares repurchased this year to $233 million. As part of its ongoing strategy
to return value to its shareholders, the Companys Board of Directors has
authorized a $200 million share repurchase program, which incorporates the $67
million remaining under the previous program.
2005 Outlook
The Company is comfortable with the current First Call consensus earnings
estimate for the fourth quarter of $1.00 per share.
Adjusted Results
Adjusted results, which are non-GAAP financial measures, are presented in
order to improve investors understanding of financial results and improve
comparability of financial information from period to period. Please refer to
the attached income statements for the quarter for a reconciliation of
reported and adjusted results. Adjusted results as reported above include the
following:
Adjustments Related to New York & Company:
- Adjustment to exclude a third quarter 2004 pretax non-operating gain of
$45.7 million, or $0.06 per share, related to the New York & Company
initial public offering.
- Adjustment to exclude a first quarter 2004 pretax non-operating gain of
$44.9 million, or $0.06 per share, resulting from the repayment of New
York & Companys $75 million subordinated note held by Limited Brands
plus accrued interest of approximately $10 million. The note was
repaid prior to its scheduled maturity of November 26, 2009.
Additionally, New York & Company purchased warrants representing
approximately 13% of New York & Companys common equity held by Limited
Brands, for $20 million. The note and warrants were part of the
consideration received by Limited Brands for the sale of New York &
Company in November 2002.
Adjustment Related to Galyans Trading Company:
- Adjustment to exclude a second quarter 2004 pretax non-operating gain
of $17.6 million, or $0.02 per share, resulting from the sale of the
Companys remaining interest in Galyans Trading Company.
To hear the Companys live third quarter earnings conference call, log on
to http://www.LimitedBrands.com at 8:00 a.m. EST on Thursday, November 17, 2005, or
call 1-877-601-1433. To hear a replay of the earnings call, dial 1-800-337-
6551, followed by the ID code LTD (583). An audio replay of the conference
call, as well as additional financial information, will also be available at
http://www.LimitedBrands.com.
About Limited Brands:
Limited Brands, through Victorias Secret, Bath & Body Works, C.O.
Bigelow, Express, Express Mens, Limited Stores, White Barn Candle Co. and
Henri Bendel, presently operates 3,677 specialty stores. Victorias Secret
products are also available through the catalogue and
http://www.VictoriasSecret.com. Bath & Body Works products are also available
at http://www.BathandBodyWorks.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act
of 1995: The Company cautions that any forward-looking statements (as such
term is defined in the Private Securities Litigation Reform Act of 1995)
contained in this press release or the third quarter earnings call or made by
the Company or management of the Company involve risks and uncertainties and
are subject to change based on various important factors, many of which are
beyond our control. Accordingly, the Companys future performance and
financial results may differ materially from those expressed or implied in any
such forward-looking statements. Words such as "estimate," "project," "plan,"
"believe," "expect," "anticipate," "intend," "planned," "potential" and
similar expressions may identify forward-looking statements. The following
factors, among others, in some cases have affected and in the future could
affect the Companys financial performance and actual results and could cause
actual results to differ materially from those expressed or implied in any
forward-looking statements included in this press release or the third quarter
earnings call or otherwise made by the Company or management: risks associated
with general economic conditions, consumer confidence and consumer spending
patterns; the potential impact of national and international security concerns
on the retail environment, including any possible military action, terrorist
attacks or other hostilities; risks associated with the seasonality of the
Companys business; risks associated with changes in weather patterns; risks
associated with the highly competitive nature of the retail industry generally
and the segments in which we operate particularly; risks related to consumer
acceptance of the Companys products and the Companys ability to keep up with
fashion trends, develop new merchandise, launch new product lines
successfully, offer products at the appropriate price points and enhance the
Companys brand image; risks associated with the Companys ability to retain,
hire and train key personnel and management; risks associated with the
possible inability of the Companys manufacturers to deliver products in a
timely manner or meet quality standards; risks associated with the Companys
reliance on foreign sources of production, including risks related to the
disruption of imports by labor disputes, risks related to political
instability, risks associated with legal and regulatory matters, risks related
to duties, taxes, other charges and quotas on imports, risks related to local
business practices and political issues and risks related to currency and
exchange rates; risks associated with the possible lack of availability of
suitable store locations on appropriate terms; risks associated with increases
in the costs of mailing, paper and printing; risks associated with our ability
to service any debt we incur from time to time and as well as the requirements
the agreements related to such debt impose upon us; risks associated with the
Companys reliance on information technology, including risks related to the
implementation of new information technology systems and risks related to
utilizing third parties to provide information technology services; risks
associated with natural disasters and risks associated with rising energy
costs. The Company is not under any obligation and does not intend to make
publicly available any update or other revisions to any of the forward-looking
statements contained in this press release or the third quarter earnings call
to reflect circumstances existing after the date of this report or to reflect
the occurrence of future events even if experience or future events make it
clear that any expected results expressed or implied by those forward-looking
statements will not be realized.
LIMITED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RECONCILIATION OF ADJUSTED RESULTS
THIRTEEN WEEKS ENDED OCTOBER 29, 2005 AND OCTOBER 30, 2004
(Unaudited)
(In thousands except per share amounts)
2005 2004
Reported Reported Adjustments Adjusted
Net Sales $1,891,551 $1,890,855 - $1,890,855
Gross Income 580,429 611,404 - 611,404
General, Administrative and
Store Operating Expenses (577,758) (558,259) - (558,259)
Operating Income 2,671 53,145 - 53,145
Interest Expense (24,561) (13,234) - (13,234)
Interest Income 3,645 7,123 - 7,123
Other (Loss) Income (1,063) 53,311 (45,668) 7,643
(Loss) Income Before Income
Taxes (19,308) 100,345 (45,668) 54,677
(Benefit) Provision for
Income Taxes (7,000) 22,000 (17,000) 5,000
Net (Loss) Income ($12,308) $78,345 (28,668) $49,677
Net (Loss) Income Per Share ($0.03) $0.16 $0.10
Weighted Average Shares
Outstanding 400,803 479,898 479,898
See Attached Notes to Consolidated Statements of Income and Reconciliation
of Adjusted Results.
LIMITED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RECONCILIATION OF ADJUSTED RESULTS
THIRTY-NINE WEEKS ENDED OCTOBER 29, 2005 AND OCTOBER 30, 2004
(Unaudited)
(In thousands except per share amounts)
2005 2004
Reported Reported Adjustments Adjusted
Net Sales $6,157,384 $6,079,890 - $6,079,890
Gross Income 1,979,363 2,079,818 - 2,079,818
General, Administrative and
Store Operating Expenses (1,724,520) (1,680,358) - (1,680,358)
Operating Income 254,843 399,460 - 399,460
Interest Expense (69,519) (36,924) - (36,924)
Interest Income 13,243 23,556 - 23,556
Other Income (Loss) 347 95,225 (90,525) 4,700
Gain on Investees Stock - 17,617 (17,617) -
Income From Continuing
Operations Before Income
Taxes 198,914 498,934 (108,142) 390,792
Provision for Income Taxes 75,000 176,000 (40,000) 136,000
Net Income $123,914 $322,934 $(68,142) $254,792
Net Income Per Share $0.30 $0.66 $0.52
Weighted Average Shares
Outstanding 412,486 491,878 491,878
See Attached Notes to Consolidated Statements of Income and Reconciliation
of Adjusted Results.
LIMITED BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED STATEMENTS OF INCOME AND
RECONCILIATION OF ADJUSTED RESULTS
The "Adjusted Results" provided in the attached unaudited Consolidated
Statements of Income and Reconciliation of Adjusted Results are non-GAAP
financial measures and reflect the following:
Fiscal 2004
In the first quarter of 2004, adjusted results exclude a $44.9 million
pretax, non-operating gain resulting from the repayment of New York &
Companys $75 million subordinated note held by Limited Brands plus accrued
interest of approximately $10 million. The note was repaid prior to its
scheduled maturity of November 26, 2009. Additionally, New York & Company
purchased warrants representing approximately 13% of New York & Companys
common equity held by Limited Brands, for $20 million. The note and warrants
were part of the consideration received by Limited Brands for the sale of New
York & Company in November 2002.
In the second quarter of 2004, adjusted results exclude a $17.6 million
pretax, non-operating gain resulting from the sale of our remaining interest
in Galyans Trading Company.
In the third quarter of 2004, adjusted results exclude a $45.7 million
pretax, non-operating gain related to proceeds that Limited Brands received in
connection with New York & Companys initial public offering.
The Unaudited Adjusted Consolidated Statements of Income should not be
construed as an alternative to the reported results determined in accordance
with generally accepted accounting principles. Further, the Companys
definition of adjusted income information may differ from similarly titled
measures used by other companies. While it is not possible to predict future
results, management believes the adjusted information is useful for the
assessment of the ongoing operations of the Company. The Unaudited Adjusted
Consolidated Statements of Income should be read in conjunction with the
Companys historical financial statements and notes thereto contained in the
Companys quarterly reports on Form 10-Q and annual report on Form 10-K.
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