Vermont Teddy Bear (NASDAQ:BEAR)
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Vermont Teddy Bear Co.(R) Reports Q3 Earnings: Mother's Day
orders increase by 21%
SHELBURNE, Vt., May 16 /PRNewswire-FirstCall/ -- The Vermont Teddy Bear
Company(R) (NASDAQ:BEAR) today reported net revenues for the three months ended
March 31, 2005 of $25.6 million, an increase of approximately 27.4% as compared
to net revenues of $20.1 million reported for the three months ended March 31,
2004. The increase to net revenues of approximately $5.5 million in the quarter
is primarily attributable to $3.0 million of increased revenue contributed by
the PajamaGram gift segment and $2.0 million of increased revenue in the
BearGram gift segment and $680,000 of increased revenue in the Calyx & Corolla
gift segment as the result of a successful Valentine's Day selling season. The
increases to net revenues in the quarter were offset by decreases in Corporate
Wholesale, Retail and the TastyGram gift segment.
Including a one-time charge to operating expenses of $2.2 million related to
the settlement of the New York lease dispute incurred in the quarter ended
March 31, 2005, net income available to common stockholders for this third
quarter was $221,000, or $.04 per diluted common share, as compared to net
income available to common stockholders of $1,389,000 or $.22 per diluted
share, for the same quarter last year. In March of 2005, the Company continued
its settlement discussions with the Company and on April 27, 2005, the Company
entered into final settlement of its litigation relating to a former lease for
retail space in New York City. Under the terms of the settlement, the Company
paid its former landlord $1.15 million when the settlement agreement was
executed, including the release of a $150,000 security deposit previously held
by the landlord, and the Company will pay the landlord an additional $1.2
million on or before March 15, 2006, without interest.
"I am very pleased with the continued growth in revenues of our Company and the
improved profitability for the quarter before taking into account the expense
related to the New York lease dispute settlement," said Vermont Teddy Bear
President and CEO Elisabeth Robert. "Earnings per share recomputed without the
one time charge would have been $.32 per diluted share for the quarter ended
March 31 versus $.22 per diluted share for the same quarter last year. The
settlement of this dispute, ongoing since December 1998, puts a long-standing
litigation finally behind us. This settlement expense is a one time charge that
will not affect the future profitability of our Company."
Revenues in the first nine months of the fiscal year increased approximately
24.4% to $47.8 million from $38.5 million in the same period last year. The
increase is due primarily to the revenues associated with continued growth in
the Company's PajamaGram gift segment of $5.2 million in the nine months ended
March 31, 2005. The BearGram segment revenues increased by $2.0 million while
Calyx & Corolla increased $2.5 million and the TastyGram segment increased
$45,000 in the period. The increase in Calyx & Corolla revenues is partially
attributed to the fact that the Company realized revenues for Calyx & Corolla
during the entire nine months period ending March 31, 2005, whereas during the
same nine months period in the prior year, the Company realized Calyx & Corolla
revenues only in the seven months of that period that followed the Company's
acquisition of Calyx & Corolla on August 29, 2003. The increases were offset by
decreases in Corporate Wholesale and Retail.
After the one-time charge of $2.2 million related to the settlement of the New
York lease dispute, the Company reported net income available to common
stockholders in the first nine months of $256,000, or .05 per diluted common
share, as compared to $1,571,000, or $.27 per diluted common share, for the
first nine months of last year.
The Company also reported today a 21% increase to orders booked in the two-week
period leading up to Mother's Day. The Company received approximately 134,000
orders for its BearGram, PajamaGram, TastyGram and Calyx & Corolla gift
products, as compared to approximately 111,000 orders taken in the same
two-week period last year. The additional 23,000 orders included 18,000 or 59%
more PajamaGram orders and 6,000 or 15% more BearGram orders. The Company also
received approximately 2% fewer Calyx & Corolla orders and 9% fewer TastyGram
orders for Mother's Day this year as compared to last.
The Vermont Teddy Bear Company's ability to offer consumers personalized last
minute gifts continues to set the Company apart from competitors. BearGram
orders that included teddy bear outfits personalized with embroidery or artwork
and personalized gift tags totaled approximately 33,000 in the two- week
period.
Consolidated gross margin in the three months ended March 31, 2005 increased to
approximately $14.7 million from $11.9 million in the comparable period last
year. In the third quarter, the gross margin dollar contribution from the
BearGram and PajamaGram segments resulted in higher margins due to increased
revenues. Gross margin as a percentage of net revenues decreased to
approximately 57.5% from 59.2% last year. Increased shipping and related fuel
costs affected the gross margin as a percentage of net revenues in all gift
segments.
Marketing and selling expenses increased to $8.7 million for the quarter from
$7.5 million for the same quarter last year as the Company increased its
advertising expenses primarily for the BearGram and PajamaGram segments in the
quarter. Marketing and selling costs as a percentage of net revenues, however,
decreased to 34.1% percent in the third quarter of fiscal 2005 from 37.5% in
the same quarter last year.
General and administrative expenses for the third quarter increased to $4.5
million from $1.8 million in the same period last year, including the $2.2
million of one-time expense related to the settlement of the New York lease
dispute and $213,000 in related legal fees. General and administrative
expenses increased to 17.8% from 8.8% in the same period last year. The New
York lease dispute settlement represents 8.4% of net revenues.
A Vermont Teddy Bear Company Bear-Gram gift is a popular alternative to sending
flowers. Each Bear-Gram gift includes a customized Vermont Teddy Bear
accompanied by a personal greeting card and candy treat, all packaged in a
colorful gift box with an air hole. Orders are placed by calling 1-800-829-
BEAR or by shopping at http://www.vermontteddybear.com/.
The PajamaGram Company is a gift delivery service where customers can pamper
their loved ones by sending pajamas and spa products in luxurious packaging by
calling 1-800-GIVE-PJS or shopping at http://www.pajamagram.com/.
The TastyGram Company specializes in the delivery of creatively packaged,
deliciously presented gourmet foods and sweets by calling 1-800-82-TASTY or
shopping at http://www.tastygram.com/
Calyx & Corolla delivers premium direct-from-the-grower floral gifts through
its catalog, by phone at 1-800-800-7788 or online at
http://www.calyxandcorolla.com/.
The foregoing can be interpreted as including forward-looking statements under
the Private Securities Litigation Reform Act of 1995. Actual future results
may differ materially from those suggested by the statements above.
DATASOURCE: Vermont Teddy Bear Company
CONTACT: Nicole L'Huillier of Vermont Teddy Bear Company,
+1-802-985-1362,
Web site: http://www.vermontteddybear.com/
http://www.calyxandcorolla.com/
http://www.tastygram.com/
http://www.pajamagram.com/