Factory Card & Party Outlet Corp. Announces Fourth Quarter Results and Reports $0.71 Earnings Per Basic Share for Fiscal 2006

  
    
  
  
    
      Factory Card & Party Outlet Corp. (NASDAQ:FCPO) today announced results 
      for the 2006 fiscal fourth quarter and full year ended February 3, 2007.
    
    
      For the quarter, net sales increased 9.6 percent to $63.8 million, 
      compared with $58.3 million for the fourth quarter of last year. 
      Comparable store net sales for the fourth quarter increased 1.6 percent 
      from the prior year’s same period (prior year 
      quarter adjusted for 14th week). As is 
      consistent with the National Retail Federation fiscal calendar, the 
      fiscal quarter ended February 3, 2007, was 14 weeks compared to the 
      prior year fiscal quarter ended January 28, 2006, which was 13 weeks. 
      Accordingly, the fiscal year ended February 3, 2007 was 53 weeks and the 
      prior fiscal year ended January 28, 2006, was 52 weeks.
    
    
      Net income for the 2006 fiscal fourth quarter was $0.2 million, or $0.08 
      per basic share and $0.07 per diluted share, versus a net loss of $1.2 
      million, or a $0.38 per share loss for the same period last year.
    
    
      Net sales for the 2006 fiscal year increased 4.8 percent to $244.2 
      million, compared with $233.1 million a year ago. Comparable store net 
      sales increased 1.1 percent from the prior fiscal year (prior year 
      adjusted for 53rd week).
    
    
      The company reported a net income for the 2006 fiscal year of $2.3 
      million or $0.71 per basic share and $0.67 per diluted share, versus a 
      net loss of $1.0 million, or a $0.33 per share loss for the prior fiscal 
      year.
    
    
      During the year, the company opened seven new locations and closed eight.
    
    
      Gary W. Rada, President and Chief Executive Officer commented “Our 
      team successfully executed several major initiatives in 2006 designed to 
      grow sales, increase gross profit, lower expenses and improve our 
      balance sheet. We are especially pleased with both our relationship 
      marketing results and our ever improving supply chain capabilities. Last 
      year’s database marketing initiatives now give 
      us the capability to directly promote our brand to the more than 3.7 
      million loyal customers that shop our retail locations and web-store 
      throughout the year. Our supply chain initiatives now enable us to 
      source over 90% of all merchandise through our distribution center, 
      providing better inventory control and increased leverage throughout our 
      operation.”
    
    
      Mr. Rada further added, “Achieving $0.71 per 
      basic share for 2006 was not only a significant achievement for the 
      fiscal year, but a great foundation for the future as we focus our 
      energies on both the company’s operations and 
      the exploration of strategic alternatives, including a potential sale of 
      the company.”
    
    
      About Factory Card
    
    
      Factory Card & Party Outlet (www.factorycard.com) 
      based in Naperville, Illinois, is the largest publicly traded retail 
      party chain in the United States. Factory Card & Party Outlet currently 
      operates 185 company-owned retail stores in 20 states, offering a wide 
      selection of party supplies, greeting cards, giftwrap, balloons, 
      everyday and seasonal merchandise, and other special occasion 
      merchandise at everyday value prices.
    
    
      Certain statements in this news release constitute “forward-looking 
      statements” within the meaning of the Private 
      Securities Litigation Reform Act of 1995. Such forward-looking 
      statements involve known and unknown risks, uncertainties, year-end 
      adjustments and other factors that may cause the actual results, 
      performance or achievements of the company, or industry results, to be 
      materially different from any future results, performance or 
      achievements express or implied by such forward-looking statements.
    
    
      In general, the results, performance or achievements of the company and 
      its stores and the value of the company’s 
      common stock are dependent upon a number of factors including, without 
      limitation, the dependence on key personnel; competition, ability to 
      anticipate merchandise trends and consumer demand; ability to maintain 
      relationships with suppliers; successful implementation of information 
      systems; successful handling of merchandise logistics; inventory 
      shrinkage; ability to meet future capital needs; governmental 
      regulations; and other factors both referenced and not referenced in the 
      company’s filings with the Securities and 
      Exchange Commission.
    
    
      
        
          
            FACTORY CARD & PARTY OUTLET CORP.
          
        
      
      
        
          AND SUBSIDIARY
        
      
      
        
           
        
      
      
        
          Consolidated Balance Sheets
        
      
      
        
          (Dollar amounts in thousands, except per share data)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          
             
          
        
        
          
            February 3,2007
          
        
        
        
        
          
            January 28,2006
          
        
      
      
        
          ASSETS
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Current assets:
        
        
        
        
        
        
        
      
      
        
          Cash
        
        
          $ 446 
        
        
        
        
          $ 196 
        
      
      
        
          Merchandise inventories, net
        
        
          45,130 
        
        
        
        
          49,552 
        
      
      
        
          Prepaid rent
        
        
          2,994 
        
        
        
        
          3,304 
        
      
      
        
          Prepaid expenses and other
        
        
          1,511 
        
        
        
        
          1,302 
        
      
      
        
          Deferred tax asset, net
        
        
          5,491 
        
        
        
        
          3,728 
        
      
      
        
          Total current assets
        
        
          55,572 
        
        
        
        
          58,082 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Fixed assets, net
        
        
          9,400 
        
        
        
        
          10,247 
        
      
      
        
          Other assets
        
        
          131 
        
        
        
        
          104 
        
      
      
        
          Deferred tax asset, net
        
        
          5,929 
        
        
        
        
          8,869 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Total assets
        
        
          $ 71,032 
        
        
        
        
          $ 77,302 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES AND STOCKHOLDERS’ EQUITY
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
      
      
        
          Line of credit
        
        
          $ 8,731 
        
        
        
        
          $ 19,532 
        
      
      
        
          Accounts payable
        
        
          16,908 
        
        
        
        
          19,266 
        
      
      
        
          Accrued expenses:
        
        
        
        
        
        
        
      
      
        
          Payroll and other compensation
        
        
          6,430 
        
        
        
        
          4,167 
        
      
      
        
          Insurance
        
        
          1,205 
        
        
        
        
          900 
        
      
      
        
          Taxes
        
        
          1,064 
        
        
        
        
          872 
        
      
      
        
          Other
        
        
          2,896 
        
        
        
        
          2,640 
        
      
      
        
          Capital lease obligations
        
        
          1 
        
        
        
        
          15 
        
      
      
        
          Total current liabilities
        
        
          37,235 
        
        
        
        
          47,392 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Deferred rent liabilities
        
        
          1,913 
        
        
        
        
          1,606 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Total liabilities
        
        
          39,148 
        
        
        
        
          48,998 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Stockholders’ equity:
        
        
        
        
        
        
        
      
      
        
          
            Common stock, $.01 par value. Authorized10,000,000 shares; 
            3,353,454 and 3,138,252shares issued and outstanding atFebruary 
            3, 2007 and January 28, 2006, respectively
          
        
        
          
             
          
          
            33 
          
        
        
        
        
          
             
          
          
            31 
          
        
      
      
        
          Unearned restricted stock awards
        
        
          - 
        
        
        
        
          (142)
        
      
      
        
          Additional paid-in capital
        
        
          26,562 
        
        
        
        
          25,714 
        
      
      
        
          Accumulated earnings
        
        
          5,289 
        
        
        
        
          2,701 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Total stockholders’ equity
        
        
          31,884 
        
        
        
        
          28,304 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Total liabilities and stockholders’ equity
        
        
          $ 71,032 
        
        
        
        
          $ 77,302 
        
      
    
    
    
    
      
        
          
            FACTORY CARD & PARTY OUTLET CORP.
          
        
      
      
        
          AND SUBSIDIARY
        
      
      
        
           
        
      
      
        
          Consolidated Statements of Operations
        
      
      
        
          (Dollar amounts in thousands, except per share data)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          
            For the 14weeks endedFebruary 3,2007
          
        
        
        
        
          
            For the 13weeks endedJanuary 28,2006
          
        
        
        
        
          
            For the 53weeks endedFebruary 3,2007
          
        
        
        
        
          
            For the 52weeks endedJanuary 28,2006
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net sales
        
        
          $
        
        
          63,833 
        
        
          $
        
        
          58,257 
        
        
          $
        
        
          244,232 
        
        
          $
        
        
          233,131 
        
      
      
        
          Cost of sales
        
        
        
        
          40,914 
        
        
        
        
          38,249 
        
        
        
        
          154,511 
        
        
        
        
          149,378 
        
      
      
        
          Gross profit
        
        
        
        
          22,919 
        
        
        
        
          20,008 
        
        
        
        
          89,721 
        
        
        
        
          83,753 
        
      
      
        
          Selling, general and administrative expenses
        
        
        
        
          21,535 
        
        
        
        
          21,201 
        
        
        
        
          81,874 
        
        
        
        
          81,974 
        
      
      
        
          Depreciation expense
        
        
        
        
          857 
        
        
        
        
          827 
        
        
        
        
          3,271 
        
        
        
        
          2,832 
        
      
      
        
          Interest expense
        
        
        
        
          151 
        
        
        
        
          256 
        
        
        
        
          855 
        
        
        
        
          804 
        
      
      
        
          Income (loss) before income taxes
        
        
        
        
          376 
        
        
        
        
          (2,276)
        
        
        
        
          3,721 
        
        
        
        
          (1,857)
        
      
      
        
          Income tax expense (benefit)
        
        
        
        
          128 
        
        
        
        
          (1,099)
        
        
        
        
          1,438 
        
        
        
        
          (854)
        
      
      
        
          Net income (loss)
        
        
          $
        
        
          248 
        
        
          $
        
        
          (1,177)
        
        
          $
        
        
          2,283 
        
        
          $
        
        
          (1,003)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income (loss) per share – basic
        
        
          $
        
        
          0.08 
        
        
          $
        
        
          (0.38)
        
        
          $
        
        
          0.71 
        
        
          $
        
        
          (0.33)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares outstanding – 
          basic
        
        
        
        
          3,281,180 
        
        
        
        
          3,089,418 
        
        
        
        
          3,228,457 
        
        
        
        
          3,074,034 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income (loss) per share – diluted
        
        
          $
        
        
          0.07 
        
        
          $
        
        
          (0.38)
        
        
          $
        
        
          0.67 
        
        
          $
        
        
          (0.33)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares outstanding - diluted
        
        
        
        
          3,468,995 
        
        
        
        
          3,089,418 
        
        
        
        
          3,416,278 
        
        
        
        
          3,074,034