The write-down of goodwill, a non-cash charge, was the result of updating the Company's impairment analysis required by SFAS No. 142 - "Goodwill and Other Intangible Assets". The analysis took into consideration the Company's results for the first half of the year and estimates for the balance of the year and beyond, as well as Federated Department Stores, Inc.'s recently announced intention to divest 42 stores for which Finlay currently operates the jewelry departments. As a result of this analysis, an impairment of goodwill of $77.3 million was recorded, which eliminates all the goodwill that was on the Company's balance sheet.
Arthur E. Reiner, Chairman and Chief Executive Officer of Finlay Enterprises, Inc., commented, "They generated bottom line results for the quarter in line with previously provided expectations. Our comparable store sales were impacted by softer sales in May Company stores, however, we generated solid comparable department sales in Federated host store groups. In addition, they are pleased to have successfully completed the acquisition of Carlyle, whose stores performed well in the quarter. The acquisition of Carlyle diversifies our business and provides additional opportunities for future growth."
First Half Results
For the six months ended July 30, 2005, the Company reported a net loss of $77.6 million, or $8.64 per share. Excluding the non-cash goodwill charge, the six month net loss was $4.7 million, or $0.52 per share. Last year's net loss for the comparable period totaled $7.3 million, or $0.83 per share. Excluding the refinancing charges and the income tax credit, the prior year's net loss for the first six months was $2.3 million, or $0.27 per share.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
