GDYS Goodys Family Clothing (MM)

KNOXVILLE, Tenn., Aug. 17 /PRNewswire-FirstCall/ -- Goody's Family Clothing, Inc. (NASDAQ:GDYS) today reported a net loss of $5,425,000, or ($0.16) per share, for the 13 weeks ended July 30, 2005, compared with net earnings of $1,278,000, or $0.04 per diluted share, for the 13 weeks ended July 31, 2004. Total sales for the second quarter of fiscal 2005 declined 1.0% to $291,668,000 compared with $294,632,000 during the same period last year. Comparable store sales for the second quarter of fiscal 2005 were down 6.6% from the same period last year. For the 26 weeks ended July 30, 2005, the Company reported a net loss of $7,203,000, or ($0.22) per share, compared with net earnings of $9,349,000, or $0.28 per diluted share, for the 26 weeks ended July 31, 2004. Total sales for the first six months of fiscal 2005 declined 2.2% to $584,373,000 compared with $597,510,000 during the same period last year. Comparable store sales for the first six months of fiscal 2005 decreased 7.3% from the same period last year. "Sales were well below plan and the prior-year second quarter," commented Robert M. Goodfriend, Chairman and Chief Executive Officer. "As previously reported, we missed some spring and summer fashion trends in all of our women's areas, which affected customer traffic and sales storewide. The weak performance forced us to be more promotional than planned in July 2005 in an effort to stimulate sales and reduce seasonal inventories. Also, inventory levels in certain other areas were planned too low, which had a further negative impact on our business. Finally, a shift in advertising dollars from television to radio in the first half of this year has not been successful. As a result, we were not able to achieve our gross profit plan and could not leverage our selling, general and administrative expense rate. We have taken corrective action in each of these areas and remain optimistic that fiscal 2005 will be profitable." Goodfriend also indicated that inventory levels on a per-square-foot basis were lower at the end of the second quarter this year compared with the same period last year. For the fiscal year to date, the Company has opened 18 new stores and relocated or remodeled five stores. For the balance of the fiscal year, the Company expects to open approximately 11 additional new stores and relocate or remodel up to five existing stores. The Company will conduct a conference call today at 9:00 a.m. (Eastern Time). To listen to the Company's conference call, dial (913) 981-5509. A replay will be available from 12:00 p.m. (Eastern Time) on August 17, 2005, until 6:00 p.m. on August 18, 2005. To listen to the playback, dial (719) 457-0820 and enter 4907604 when prompted for the access code. This press release contains certain forward-looking statements which are based upon current expectations, business plans and estimates and involve material risks and uncertainties including, but not limited to: (i) the general economic conditions within the Company's markets; (ii) weather conditions; (iii) trends affecting the Company's financial condition, results of operations or cash flows; (iv) the ability to predict fashion trends; (v) the timely availability of branded and private-label merchandise in sufficient quantities to satisfy customer demand; (vi) the effectiveness of advertising and promotional events; (vii) the ability to achieve business plan targets; (viii) the ability to negotiate acceptable lease terms for new store locations and existing store locations to be remodeled or relocated; (ix) individual store performance, including new stores; (x) competition, including the impact of competitors' store expansion; (xi) unanticipated needs for additional capital expenditures; and, (xii) global political unrest, including terrorism and war. Readers are cautioned that any such forward-looking statement is not a guarantee of future performance and involves risks and uncertainties, and that actual results may differ materially from those projected in the forward- looking statements. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the Company's financial results may be found in the Company's 2004 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Certain of such filings may be accessed through the Company's web site, http://www.goodysonline.com/, then choose "SEC Filings." Goody's, headquartered in Knoxville, Tennessee, is a retailer of moderately priced family apparel. The Company currently operates 371 stores (368 at July 30, 2005, compared with 345 July 31, 2004) in the 20 states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia. GOODY'S FAMILY CLOTHING, INC. Unaudited Consolidated Statements of Operations (In thousands, except per share amounts) 13 Weeks Ended 26 Weeks Ended --------------------- --------------------- July 30, July 31, July 30, July 31, 2005 2004 2005 2004 --------- --------- --------- --------- Sales $ 291,668 $ 294,632 $ 584,373 $ 597,510 Cost of sales and occupancy expenses 209,833 206,174 419,575 415,649 --------- --------- --------- --------- Gross profit 81,835 88,458 164,798 181,861 Selling, general and administrative expenses 91,467 86,497 177,837 167,221 --------- --------- --------- --------- (Loss) earnings from operations (9,632) 1,961 (13,039) 14,640 Investment income 438 206 841 391 Interest expense 1 130 11 131 --------- --------- --------- --------- (Loss) earnings before income taxes (9,195) 2,037 (12,209) 14,900 (Benefit) provision for income taxes (3,770) 759 (5,006) 5,551 --------- --------- --------- --------- Net (loss) earnings $ (5,425) $ 1,278 $ (7,203) $ 9,349 ========= ========= ========= ========= Earnings (loss) per common share: Basic $ (0.16) $ 0.04 $ (0.22) $ 0.28 ========= ========= ========= ========= Diluted $ (0.16) $ 0.04 $ (0.22) $ 0.28 ========= ========= ========= ========= Cash dividends declared per common share: $ 0.03 $ 0.03 $ 0.06 $ 0.05 ========= ========= ========= ========= Weighted average common shares outstanding: Basic 33,039 32,961 32,978 32,926 ========= ========= ========= ========= Diluted 33,039 33,893 32,978 33,897 ========= ========= ========= ========= Unaudited Condensed Consolidated Balance Sheets (In thousands) July 30, July 31, 2005 2004 --------- --------- Assets Cash and cash equivalents $ 88,997 $ 108,354 Inventories 237,885 240,729 Accounts receivable and other current assets 24,244 14,364 --------- --------- Total current assets 351,126 363,447 Property and equipment, net 135,917 120,706 Other assets 4,781 5,278 --------- --------- Total assets $ 491,824 $ 489,431 ========= ========= Liabilities and Shareholders' Equity Accounts payable - trade $ 134,646 $ 140,911 Accounts payable - other 12,398 12,297 Accrued expenses 49,397 46,290 Current deferred income taxes 26,560 23,176 --------- --------- Total current liabilities 223,001 222,674 Long-term liabilities 30,626 18,386 Deferred income taxes 6,703 12,584 Shareholders' equity 231,494 235,787 --------- --------- Total liabilities and shareholders' equity $ 491,824 $ 489,431 ========= ========= DATASOURCE: Goody's Family Clothing, Inc. CONTACT: Edward R. Carlin, Chief Financial Officer of Goody's Family Clothing, Inc., +1-865-966-2000 Web site: http://www.goodysonline.com/

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