Vermont Teddy Bear (NASDAQ:BEAR)
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Vermont Teddy Bear Co.(R) Reports Q3 Earnings: Successful third
quarter proves Men Really Do Buy Teddy Bears
SHELBURNE, Vt., May 17 /PRNewswire-FirstCall/ -- The Vermont Teddy Bear
Company(R) today reported net revenues for the three months ended March 31,
2004 of $20.1 million, an increase of approximately 38% as compared to net
revenues of $14.5 million reported for the three months ended March 31, 2003.
The revenue increase in the quarter is primarily attributable to the $3.6
million of revenue contributed by the addition of the Calyx & Corolla floral
delivery segment acquired August 29, 2003. Revenues in the BearGram segment
and the PajamaGram segment also increased $.9 million and $.8 million
respectively as the result of a successful Valentine's Day selling season. Net
income available to common stockholders for this third quarter was $1.4
million, or $.22 per diluted common share, as compared to net income available
to common stockholders of $971,000, or $.18 per diluted share, for the same
quarter last year.
(Photo: http://www.newscom.com/cgi-bin/prnh/20040517/NEM047 )
"At Valentine's Day our success is linked to our unique ability to market and
sell teddy bear BearGrams to grown men as the creative alternative to flowers,"
said Vermont Teddy Bear President and CEO Elisabeth Robert. "To that end we
focus our advertising for this male driven holiday on radio programming
targeting men, such as Howard Stern. Additionally, this year we teamed up with
Adam Carolla, formerly of The Man Show, to expand our national TV advertising
campaign. While our PajamaGram, TastyGram and Calyx & Corolla gift segments do
represent a Valentine's Day selling opportunity to men looking for a gift for
their wife or sweetheart, they really are more targeted at the woman gift buyer
at Christmas, Mother's Day and other times of the year."
Revenues in the first nine months of the fiscal year increased approximately
33% to $38.5 million from $28.9 million in the same period last year due
primarily to the revenues associated with the newly acquired floral delivery
business Calyx & Corolla and growth in the Company's PajamaGram gift segment.
Calyx & Corolla added $9.8 million in the period while the PajamaGram segment
grew by 45% to $4.6 million in the nine months ended March 31, 2004 from $3.2
million in the same nine months of 2003. The growth in these segments is
partially offset by a decrease of $1.5 million in Bear-Gram revenues for the
period. The Company reported net income available to common stockholders in
the first nine months of $1,577,000, or .27 per diluted common share, as
compared to $966,000, or $.16 per diluted common share, for the first nine
months of last year.
Consolidated gross margin in the three months ended March 31, 2004 increased to
approximately $11.9 million from $9.1 million in the comparable period last
year. In the third quarter, the gross margin dollar contribution from the
Calyx segment, BearGram and Corporate/Wholesale segments resulted in higher
margins due to increased revenues. Gross margin as a percentage of net
revenues decreased to approximately 59.2% from 62.9% last year. While the
Company achieved a gross margin percentage point increase of 7.1 points in the
PajamaGram segment as a result of better unit gross margins and changes to the
product mix, the increase was offset by a decrease of 2.5 percentage points in
the TastyGram segment, 2.3 percentage points in the Corporate/Wholesale segment
resulting from lower margins on a large volume order of teddy bears shipped in
the period and a 2.1 percentage point decrease in the BearGram margin
attributed to higher unit overhead costs associated with reduced bear
production. The 46.5 percent gross margin in the newly acquired Calyx &
Corolla segment, which is significantly less than the Company's overall gross
margin, also contributed to the decrease in the Company's consolidated gross
margin as a percentage of net revenues in the quarter.
Marketing and selling expenses increased to $7.5 million for the quarter from
$5.8 million for the same quarter last year. The increases are primarily due
to the addition of marketing and selling expenses associated with the new Calyx
segment. During the period the Company also increased spending on PajamaGram
radio advertising and launched a national cable network television advertising
campaign for the BearGram segment. As a result, marketing and selling costs as
a percentage of net revenues decreased to 37.4 percent in the third quarter of
fiscal 2004 from 40.1 percent in the quarter last year.
General and administrative expenses for the third quarter increased to $1.8
million from $1.5 million primarily due to the general and administrative cost
associated with the Calyx & Corolla gift segment. However, general and
administrative expenses decreased to 8.8% from 10.3% in the same period last
year.
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.
Contact:
Nicole L'Huillier
802-985-1362
THE VERMONT TEDDY BEAR CO., INC.
Condensed Consolidated Statements of Income
For the Three and Nine Months Ended March 31,
2004 and 2003
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31, March 31, March 31,
2004 2003 2004 2003
Net Revenues $20,078,040 $14,528,266 $38,468,011 $28,902,301
Cost of Goods
Sold 8,186,536 5,393,461 16,150,569 10,960,968
Gross Profit 11,891,504 9,134,805 22,317,442 17,941,333
Operating
Expenses:
Marketing and
Selling
Expenses 7,504,129 5,822,239 14,503,747 11,993,269
General and
Administrative
Expenses 1,757,745 1,489,422 4,314,726 3,818,743
9,261,874 7,311,661 18,818,473 15,812,012
Operating
Income 2,629,630 1,823,144 3,498,969 2,129,321
Interest Income 10,348 20,716 28,108 104,561
Interest Expense (167,193) (168,122) (504,498) (445,598)
Other Income 251 0 2,493 5,729
Income Before
Income Taxes 2,473,036 1,675,738 3,025,072 1,794,013
Income Tax
Provision (1,034,890) (670,295) (1,296,563) (717,605)
Net Income 1,438,146 1,005,443 1,728,509 1,076,408
Preferred Stock
Dividends (50,214) (20,709) (133,073) (69,786)
Accretion of
Original Issue
Discount 0 (13,623) (18,153) (40,869)
Net Income
Available to
Common
Stockholders $1,387,932 $971,111 $1,577,283 $965,753
Basic Net Income
Per Common
Share $0.28 $0.20 $0.32 $0.17
Diluted Net
Income Per
Common Share $0.22 $0.18 $0.27 $0.16
Weighted Average
Number of
Shares
Outstanding 4,973,906 4,853,372 4,913,569 5,665,789
Weighted Average
Number of
Diluted
Common Shares
Outstanding 6,323,312 5,477,490 6,093,384 6,501,398
Condensed Consolidated Balance Sheet
Information
March 31, June 30, March 31,
2004 2003 2003
(unaudited) (unaudited)
Cash and Cash Equivalents $8,354,500 $5,168,177 $5,542,637
Current Assets 16,296,977 12,338,471 12,861,135
Total Assets 30,397,521 21,022,425 21,741,499
Current Liabilities 11,075,023 6,109,936 7,330,938
Long Term Debt 6,745,365 6,613,847 6,856,783
Total Liabilities 18,041,471 12,861,127 14,392,815
Series C Preferred 93,042 164,889 151,266
Series D Preferred 2,510,274 0 0
Stockholders' Equity 9,752,734 7,996,409 7,197,418
http://www.newscom.com/cgi-bin/prnh/20040517/NEM047
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DATASOURCE: The Vermont Teddy Bear Company
CONTACT: Nicole L'Huillier of The Vermont Teddy Bear Company, +1-802-985-
1362,
Web site: http://www.vermontteddybear.com/