The Yankee Candle Company, Inc. ("Yankee" or the "Company";
NYSE:YCC) today announced financial results for the first quarter
ended April 1, 2006. Earnings per common share on a diluted basis
increased 30% to $0.30 from $0.23 for the prior year quarter. Total
sales for the first quarter were $133.9 million, a 12% increase
over the year ago quarter. Total company comparable store sales
increased 1%. Included in the first quarter EPS is a favorable
federal income tax adjustment of $2.3 million, or $0.05 per diluted
share, primarily due to the resolution of prior years' outstanding
federal income tax matters. Earnings per common share on a diluted
basis before the benefit of this tax adjustment was $0.25, an
increase of 9% over the year ago quarter.(1) "First quarter 2006
EPS results were solid and at the high end of our expectations
range, excluding a one-time tax adjustment", commented Craig Rydin,
Chairman and Chief Executive Officer. "Revenue exceeded our plan
overall, with the retail division in all three business segments
delivering higher growth on positive comparable store sales and
wholesale sales within expectations. Our strong revenue performance
this quarter is a tribute to all of our employees who worked
together to create these solid results." First Quarter Highlights:
-- Retail sales were $61.6 million, a 19% increase over the fiscal
2005 first quarter. Comparable sales in the 330 retail stores
including the South Deerfield flagship store that have been open
for more than one year increased 3%. Comparable sales in the 329
retail stores excluding the South Deerfield flagship store
increased 4%. Consumer Direct increased 53% over the fiscal 2005
first quarter. Including Consumer Direct, total retail comparable
sales increased 8%. -- Wholesale sales were $72.3 million in the
first quarter, an increase of 7% over the year ago quarter.
Wholesale comparable sales in the first quarter decreased 2%. --
Gross profit increased 11% to $72.0 million for the first quarter
versus the prior year quarter. As a percentage of sales, gross
profit decreased to 53.8% compared to 54.4% for the prior year
quarter, due to promotional costs in Wholesale and higher energy
and freight costs. -- Income from operations for the first quarter
increased 2% to $19.2 million, from $18.8 million for the first
quarter of 2005. Craig Rydin continued, "We executed very well on
several fronts this quarter, including our semi-annual clearance
sale, our intensified core candle focus, and improved in-store
presentation, which together with our Q4 price increase contributed
to solid retail segment margins and our segment profit increase of
7%. The strong retail gain helped offset lower wholesale margins
that were pressured by seasonal markdowns at national customers and
the introductory promotional costs of new brand launches.
Additionally, wax supply constraints at one of our major suppliers
appear to be easing as our wax allocation has been increased from
70% to 100% of 2005 purchases." Forecast Highlights: The Company
also provided its sales and EPS guidance for the fiscal 2006 second
quarter and full year. As is customary for Yankee Candle Company,
this guidance excludes any impact of additional share repurchases.
In addition, the full-year guidance excludes the first quarter 2006
one-time tax benefit of $0.05 per share. -- For second quarter of
2006, the Company expects approximately 6%-8% total sales growth
and earnings per diluted common share of $0.18 to $0.20 versus
$0.19 in the second quarter of 2005. Prior year earnings per share
included approximately $0.01 in a one-time benefit arising from a
favorable adjustment to its gift card liability. -- The Company's
full year guidance for diluted EPS growth remains unchanged at 11%
- 14%, excluding the restructure charge taken in 2005, or 16% - 20%
including the charge. As noted above, this outlook also excludes
the Q1 2006 one-time tax benefit. Total sales growth is expected to
be approximately 7%-8%. Mr. Rydin concluded, "We are proud of our
first quarter results, which reflect the initial benefits of the
transition we aim to achieve this year. While we are still in early
stages, we are applying the energy and focus of the entire Yankee
Candle team and believe we are well positioned to deliver on our
strategic priorities." The Company also announced that on April 25,
2006 it entered into a $100 million 364-day Credit Facility with
Citizens Bank of Massachusetts. The terms and conditions of this
credit facility mirror those of the Company's existing credit
facility and are more fully described in a Current Report on Form
8-K to be filed today with the Securities and Exchange Commission.
The funds will be utilized to fund, among other things, working
capital, letters of credit, repurchase of the Company's common
stock and other general corporate purposes. Earnings Conference
Call: The Company will host a conference call to be broadcast via
the Internet at 1:00 p.m. (EST) this afternoon to more fully
discuss fiscal 2006 first quarter results and outlook. This call is
being webcast by CCBN and can be accessed at The Yankee Candle
Company's web site at www.yankeecandle.com. Click on the "About Us"
link, and then select the "Investor Information" link. Enter your
registration information ten minutes prior to the start of the
conference. The Yankee Candle Company, Inc. is the leading
designer, manufacturer, wholesaler and retailer of premium scented
candles, based on sales, in the giftware industry. Yankee has a
36-year history of offering distinctive products and marketing them
as affordable luxuries and consumable gifts. The Company sells its
products through a North American wholesale customer network of
approximately 17,000 store locations, a growing base of Company
owned and operated retail stores (381 located in 42 states as of
April 1, 2006), direct mail catalogs, its Internet website
(www.yankeecandle.com), international distributors and to a
European wholesale customer network of approximately 2,300 store
locations (through its distribution center located in Bristol,
England). This press release contains certain information
constituting "forward-looking statements" for purposes of the safe
harbor provisions of The Private Securities Litigation Reform Act
of 1995. Forward-looking statements include but are not limited to
the statements contained herein with respect to management's
current estimates of the Company's financial and operating results
for Fiscal 2006, and the second quarter thereof, the growth
initiatives and specific actions discussed above and their impact
on the Company's future operating results, and any other statements
concerning the Company's or management's plans, objectives, goals,
strategies, expectations, estimates, beliefs or projections, or any
other statements concerning future performance or events. Actual
results could differ materially from those indicated by these
forward-looking statements as a result of various risks and
uncertainties, including but not limited to the following: the
current economic conditions in the United States as a whole and the
continuing weakness in the retail environment; the risk that we
will be unable to maintain our historical growth rate; the effects
of competition from others in the highly competitive giftware
industry; our ability to anticipate and react to industry trends
and changes in consumer demand; our dependence upon our senior
executive officers; the risk of loss of our manufacturing and
distribution facilities; the impact on our stock price of seasonal,
quarterly and other fluctuations in our business; the risk of any
disruption in wax supplies; and other factors described or
contained in the Company's most recent Quarterly Report on Form
10-Q or Annual Report on Form 10-K on file with the Securities and
Exchange Commission. Any forward-looking statements represent our
views only as of today and should not be relied upon as
representing our views as of any subsequent date. While we may
elect to update certain forward-looking statements at some point in
the future, we specifically disclaim any obligation to do so even
if experience or future events may cause the views contained in any
forward-looking statements to change. (1)See attached income
statement for GAAP reconciliation. -0- *T The Yankee Candle
Company, Inc. and Subsidiaries Consolidated Statements of
Operations (in thousands, except per share data) (Unaudited)
Thirteen Weeks Thirteen Weeks Ended Ended April 1, 2006 April 2,
2005 ----------------- ----------------- Sales: Retail $ 61,637
46.03% $ 51,819 43.45% Wholesale 72,277 53.97% 67,436 56.55%
----------------- ----------------- Total sales 133,914 100.00%
119,255 100.00% Cost of sales 61,936 46.25% 54,424 45.64%
----------------- ---------------- Gross profit 71,978 53.75%
64,831 54.36% Retail 31,976 51.88%(A) 28,340 54.69%(A) Wholesale
5,291 7.32%(B) 4,153 6.16%(B) ----------------- -----------------
Total selling expenses 37,267 27.83% 32,493 27.25% General &
administrative expenses 15,464 11.55% 13,532 11.35%
----------------- ----------------- Income from operations 19,247
14.37% 18,806 15.77% Interest (income) (7) -0.01% (6) -0.01%
Interest expense 2,788 2.08% 936 0.78% Other (income) expense (145)
-0.11% 218 0.18% ----------------- ----------------- Income before
provision for income taxes 16,611 12.40% 17,658 14.81% Provision
for income taxes 4,140 3.09% 6,887 5.78% -----------------
----------------- Net income $ 12,471 9.31% $ 10,771 9.03%
================= ================= Basic earnings per share $ 0.30
$ 0.23 ========= ========= Diluted earnings per share $ 0.30 $ 0.23
========= ========= Weighted avg. basic shares outstanding 41,016
46,877 Weighted avg. diluted shares outstanding 41,262 47,312
Reconciliation of Non-GAAP Measures: Net income, per common share,
diluted as reported $ 0.30 Tax adjustment (0.05) --------- Adjusted
net income per common share, diluted $ 0.25 =========
-----------------------------------------------------------------
(A) Retail selling expenses as a percentage of retail sales. (B)
Wholesale selling expenses as a percentage of wholesale sales. The
Yankee Candle Company, Inc. and Subsidiaries Condensed Consolidated
Balance Sheets (in thousands) ASSETS April 1, December 31, 2006
2005 ----------- ----------- (unaudited) Current Assets: Cash and
cash equivalents $ 9,091 $ 12,655 Accounts receivable, net 42,920
42,546 Inventory 63,114 55,528 Prepaid expenses and other current
assets 10,118 9,060 Deferred tax assets 5,428 6,734 -----------
----------- Total Current Assets 130,671 126,523 Property, Plant
And Equipment, net 135,218 139,089 Marketable Securities 2,284
2,223 Deferred Financing Costs 694 593 Deferred Tax Assets 73,000
73,975 Other Assets 12,408 12,731 ----------- ----------- Total
Assets $ 354,275 $ 355,134 =========== =========== LIABILITIES AND
STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 14,827
$ 21,068 Accrued payroll 10,267 14,319 Accrued income taxes 1,905
20,828 Other accrued liabilities 16,394 34,326 -----------
----------- Total Current Liabilities 43,393 90,541 Deferred
Compensation Obligation 2,330 2,418 Long-Term Debt 208,000 178,000
Deferred Rent 15,767 16,031 Stockholders' Equity 84,785 68,144
----------- ----------- Total Liabilities And Stockholders' Equity
$ 354,275 $ 355,134 =========== =========== The Yankee Candle
Company, Inc. April 26, 2006 Earnings Release Supplemental Data
Year to Quarter Date Total ------------ ----------- ---------
Retail Stores 4 4 381 Wholesale Customer Locations - North America
(a) 663 663 17,047 Wholesale Customer Locations - Europe 100 100
2,300 Square Footage - Gross 5,787 5,787 779,219 Square Footage -
Selling 4,725 4,725 609,254 Total Company Comp Sales Change % 1% 1%
Wholesale Comp Sales Change % -2% -2% Retail Comp Store Sales
Change % 3% 3% Retail Comp Store Count 330 - 330 Retail Comp Store
Sales Change %, excl. S. Deerfield 4% 4% Retail Comp Store &
Consumer Direct Sales Change % 8% 8% Sales per Square Foot (1) - $
566 Store Count - 335 Average store square footage, gross (2) -
1,660 Average store square footage, selling (2) - 1,284 Gross
Profit (3) Retail $ $ 38,758 $ 38,758 Retail % 62.9% 62.9%
Wholesale $ $ 33,219 $ 33,219 Wholesale % 46.0% 46.0% Segment
Profit (3) Retail $ $ 6,783 $ 6,783 Retail % 11.0% 11.0% Wholesale
$ $ 27,928 $ 27,928 Wholesale % 38.6% 38.6% Depreciation &
Amortization (3) $ 6,485 $ 6,485 Inventory per Store $ 43,000 -
Inventory Turns 4.2 4.5 (4) Capital Expenditures (3) $ 2,279 $
2,279 Shares Outstanding 41,073,371 - Weighted avg diluted shares
in EPS calculation 41,262,000 - (1) Trailing 12 months, stores open
for full 12 months, excluding S. Deerfield Flagship Store. (2)
Excludes S. Deerfield and Williamsburg, VA Flagship stores. (3)
Dollars in thousands. (4) Rolling four quarters. (a) Excludes Pet,
Club, Office and tests *T
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