The Yankee Candle Company, Inc. Announces Preliminary Fourth Quarter and Full Year 2006 Results
10 Januar 2007 - 1:00PM
Business Wire
The Yankee Candle Company, Inc. (NYSE:YCC) today announced
preliminary financial results for the thirteen weeks and full year
ended December 30, 2006. The estimates set forth below are based
upon currently available information and are subject to the
completion of the audit by the Company�s independent registered
public accountants for the full year 2006. The Company also
announced that a Special Meeting of Stockholders will be held on
January 23, 2007 with respect to the proposed merger of the Company
with an affiliate of Madison Dearborn Partners, LLC, a private
equity firm, announced by the Company on October 25, 2006 (the
"transaction"). The Company currently anticipates that the
transaction will close in February 2007, subject to stockholder
approval. Preliminary estimates for the thirteen weeks and full
year 2006 are as follows: Thirteen Weeks ended December 30, 2006
compared to Thirteen weeks ended December 31, 2005 For the thirteen
weeks ended December 30, 2006, the Company estimates: -- Total
consolidated sales of between $275 million and $278 million,
compared with $236.9 million for the comparable prior year period,
representing an approximate increase of between 16% and 17%. --
Retail sales of between $177 million and $178 million, compared
with $144.5 million for the comparable prior year period,
representing an approximate increase of between 22% and 23%. --
Comparable sales in the 373 retail stores that have been open for
more than one year, including the South Deerfield flagship store
and Williamsburg flagship store, and excluding any Illuminations
stores increased by approximately 11% when compared with the prior
year period. Including Consumer Direct and excluding Illuminations,
total retail comparable sales increased by approximately 12% when
compared with the prior year period. Store transactions increased
approximately 2%. -- Wholesale sales of between $98 million and
$100 million, compared with $92.4 million for the comparable prior
year period, representing an approximate increase of between 6% and
8%. Adjusted EBITDA of between $98 million and $100 million,
compared with $86.3�million for the comparable prior year period.
On a GAAP basis, diluted EPS of between $1.26 and $1.29, compared
with $1.01 for the comparable prior year period. Excluding
non-recurring transaction costs of approximately $3.2 million
associated with the transaction, estimated diluted EPS of between
$1.31 and $1.34. Fiscal Year ended December 30, 2006 compared to
Fiscal Year ended December 31, 2005 Giving effect to the above
estimates and actual results of operations through September 30,
2006, the Company estimates that it will report the following
results for the full fiscal year 2006: -- Total consolidated sales
of between $684 million and $687 million, compared with $601.2
million for the comparable prior year period, representing an
approximate increase of 14%. -- Retail sales of between $369
million and $370 million, compared with $304.1 million for the
comparable prior year period, representing an approximate increase
of between 21% and 22%. -- Comparable sales in the 373 retail
stores that have been open for more than one year, including the
South Deerfield flagship store and Williamsburg flagship store, and
excluding any Illuminations stores, increased by approximately 9%
when compared with the prior year period. Including Consumer Direct
and excluding Illuminations, total retail comparable sales
increased by approximately 10% when compared with the prior year
period. Store transactions were flat compared to the prior year. --
Wholesale sales of between $315 million and $317 million, compared
with $297.1 million for the comparable prior year period,
representing an increase of between 6% to 7%. Adjusted EBITDA of
between $182 million and $184 million, compared with $168.5�million
for the comparable prior year period. On a GAAP basis, diluted EPS
of between $2.04 per share and $2.07 per share, including the tax
benefit of approximately $0.06 per share in the first quarter of
2006, compared to fiscal 2005 diluted EPS of $1.73. Excluding
non-recurring costs associated with the transaction and the $0.06
tax benefit from the first quarter of 2006, estimated diluted EPS
will be in the range of $2.03 per share to $2.06 per share, which
compares to the range of $1.96 per share to $2.01 per share that
was provided by the Company on its earnings conference call on
October 25, 2006. Rent expense of approximately $29 million.
Capital expenditures of approximately $25 million. Year end cash
balance of approximately $23 million. Year end debt balance of
approximately $140 million. Year end inventory of approximately $62
million compared to year end fiscal 2005 inventory of $55.5 million
and guidance of $70 million provided by the Company on its earnings
conference call on October 25, 2006. Management presents EBITDA and
Adjusted EBITDA, which are non-GAAP liquidity measures, because it
believes that they are a useful tool for the Company and its
investors to measure the Company�s ability to meet debt service,
capital expenditure and working capital requirements. EBITDA and
Adjusted EBITDA, as presented, may not be comparable to similarly
titled measures reported by other companies since not all companies
necessarily calculate EBITDA and Adjusted EBITDA in an identical
manner and therefore is not necessarily an accurate means of
comparison between companies. EBITDA and Adjusted EBITDA are not
intended to represent cash flows for the period or funds available
for management�s discretionary use nor have they been represented
as an alternative to operating income as an indicator of operating
performance and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP. In order to compensate for differences in the calculation of
EBITDA and Adjusted EBITDA across companies, these measures should
be evaluated in conjunction with GAAP measures such as operating
income, net income, cash flow from operations and other measures of
equal importance. Historical and estimated pro forma EBITDA and
estimated pro forma Adjusted EBITDA are calculated as follows (in
millions): Fifty-Two Weeks Ended Thirteen Weeks Ended Estimated
RangeThirteen Weeks Ended Estimated RangeFifty-Two Weeks Ended
December31, 2005 December31, 2005 December 30, 2006 December 30,
2006 Cash flows from operating activities $ 106.5� $ 111.4� $
165.1� $ 168.1� $ 143.5� $ 146.5� Net changes in assets and
liabilities 9.8� (57.5) (106.5) (107.0) (23.0) (23.5) Other
non-cash items (13.4) (3.3) (1.9) (2.4) (11.3) (11.8) Amortization
of deferred financing costs (0.4) (0.8) (0.2) (0.2) (0.5) (0.5)
Interest expense, net 7.2� 2.4� 4.0� 4.0� 14.8� 14.8� Income taxes
49.9� 27.8� 33.2� 33.2� 49.9� 49.9� EBITDA $ 159.6� $ 80.0� $ 93.7�
$ 95.7� $ 173.4� $ 175.4� � Restructuring (a) 5.5� 5.5� (0.4) (0.4)
(0.4) (0.4) Stock based compensation 3.4� 0.8� 1.5� 1.5� 5.8� 5.8�
Transaction costs (b) -� -� 3.2� 3.2� 3.2� 3.2� Adjusted EBITDA $
168.5� $ 86.3� $ 98.0� $ 100.0� $ 182.0� $ 184.0� � (a) During the
fourth quarter of fiscal 2005, the Company initiated a
restructuring plan designed to close 17 underperforming stores and
re-invest in talent and other strategic growth initiatives. In
connection with this restructuring plan, a charge of $5.5 million
was recorded in the fourth quarter of fiscal 2005. Included in the
restructuring charge was $2.4 million related to lease termination
costs, $2.5 million related to non-cash fixed assets write-offs and
other costs, and $0.6 million in employee related costs. All of the
17 underperforming stores have been closed and the Company has
reversed the remaining reserve of $0.4 million in the fourth
quarter of fiscal 2006. (b) On October 25, 2006, the Company
announced it had entered into a definitive merger agreement under
which an affiliate of Madison Dearborn Partners, LLC, a leading
private equity investment firm, would acquire all of the
outstanding shares of Yankee for approximately $1.4 billion in
cash. In connection with this transaction, the Company incurred
non-recurring pre-tax costs of approximately $3.2 million in the
fourth quarter and fiscal year 2006. The revised 2006 fourth
quarter and full-year guidance reported in this press release,
together with the Company's analysis thereof, are preliminary in
nature and may be subject to change in connection with the
completion of the Company's 2006 financial statements which are
subject to the completion of the audit by the Company�s independent
registered public accountants. The Company undertakes no obligation
to update this information. About The Yankee Candle Company, Inc.
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 37-year
history of offering distinctive products and marketing them as
affordable luxuries and consumable gifts. The Company sells its
products through a North American customer network of approximately
17,400 store locations, a growing base of Company owned and
operated retail stores (420 located in 43 states as of December 30,
2006 including 16 Illumination Stores), direct mail catalogs, its
Internet websites (www.yankeecandle.com, www.aromanaturals.com and
www.illuminations.com ), international distributors and to a
European customer network of approximately 2,500 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 fourth quarter thereof, the growth initiatives
and specific actions discussed above and their impact on the
Company�s future operating results, the consummation of the
proposed merger, 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.
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