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Ann Taylor reports fiscal Q4 and full year 2008 results
07
Mar '09
AnnTaylor Stores Corporation reported its results for the fiscal fourth quarter and full year of 2008, ended January 31, 2009. The Company indicated that results for both periods were significantly impacted by non-cash charges associated with goodwill and asset impairment, as well as restructuring charges associated with the Company's strategic restructuring program.

Taken together, on a pre-tax basis, these charges totaled approximately $346 million in the fourth quarter of 2008 and $376 million for the full year of 2008. On an after-tax basis, these charges totaled approximately $317 million in the fourth quarter of 2008 and $337 million for the full year of 2008.

Excluding the aforementioned impairments and restructuring charges, the Company reported a net loss of $58.1 million, or $1.03 per diluted share, in the fourth quarter of 2008. For the full year of 2008, on the same basis, the Company reported net income of $2.9 million, or $0.05 per diluted share. On a GAAP basis, including the aforementioned impairments and restructuring charges, net loss totaled $376 million, or $6.66 per diluted share, in the fourth quarter of 2008, and $334 million, or $5.82 per diluted share, for the full year of 2008.

Commenting on the results, Ann Taylor President & Chief Executive Officer Kay Krill stated, "The fourth quarter of 2008 was a particularly challenging period for both the overall retail industry and our Company, reflecting extremely weak macroeconomic fundamentals, including historically low consumer confidence and a broad-based decline in consumer spending -- particularly on women's apparel.

In addition, the financial crisis and rising unemployment especially impacted our Ann Taylor division, where professional working women represent a large part of our client base. With the lower sales across the sector, increased inventory levels resulted in unprecedented promotional activity. While this activity significantly eroded our gross margin, our Company was successful in clearing through inventory, and we closed the year with total inventory down 32% versus year-ago.

In addition, we have planned our Spring inventories extremely conservatively, and we believe we can restore a healthier margin structure to the business beginning in the first quarter of 2009. In fact, we believe that our margin performance in the fourth quarter of 2008 marked a performance trough for the Company, and we expect the first quarter of 2009 to show meaningful margin improvement from the fourth quarter level, due to our much healthier inventory position and ongoing cost reduction focus."

Ms. Krill continued, "Despite the disappointing results we reported for the quarter and the year, our balance sheet and liquidity position remained strong, and we ended the year with $112 million in cash and no bank debt. In addition, to safeguard against ongoing uncertainty in the credit market, we just drew down $125 million of our $250 million revolving credit facility, as a cushion, in the event we need incremental capital in the coming months to cover our typical working capital build for Spring.


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