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Bombay profits jump 93.8%

By Clint Engel -- Furniture Today, March 16, 2003

Fort Worth, Texas — The Bombay Company's profits jumped 93.8% as revenues grew nearly 13% in the year ended Feb. 1, with strong performances from stores in all regions and growth in its Internet, mail-order and wholesale businesses.

The company, with over 420 stores in the United States and Canada, reported earnings of $7.2 million for the fiscal year, up from $3.7 million last year. Revenues rose to $494 million and same-store sales increased 5%. Furniture grew to 44% of revenues from 43% last year.

For the fourth quarter, revenues climbed 24.1% to $189.3 million while same-store sales grew 19%.

Chairman James Carreker said the company is "highly encouraged" by its second-half performance, adding the current management team "is making the right decisions."

Bombay has been without a president and chief executive officer since August, when Carmie Mehrlander resigned. In a conference call with the investment community, Carreker didn't say when a replacement might be named, although "we have very good candidate flow."

The specialty retailer has had seven consecutive months of double-digit same-store sales increases, with a "relentless focus on the basics," said Steven Farley, senior vice president of marketing.

In addition to offering the right kind of value in its assortment, it has developed shorter transaction times and simpler communications with employees, which has given them more time to help customers, Farley said.

Bombay plans to expand aggressively this year, opening 75 to 85 new stores, including adding about 30 Bombay Kids stores to the five already open. Wherever possible it will open combination Bombay and Bombay Kids locations.

The company will close 30 to 35 stores as leases expire this year.

Among other things, the company will focus on filling out its top 20 markets, taking advantage of advertising and other efficiencies. About half its mall-based stores are up for lease renewals over the next two years (97 this year and 94 the next), and Bombay may relocate many to attractive off-mall locations or expand existing mall units, but with better terms.

In the current year, the company expects sales to grow 14% to 16% to $565 million to $575 million. Same-store sales are expected to increase in the mid single-digit range, and earnings per share are expected to be in the 27 to 31 cents range.

Non-store revenues — Web, mail order, internationally licensed stores and wholesaler Bailey Street Trading Co. — are expected to grow to 8%–10% of total revenues from 7% last year.

For the first quarter, Bombay expects same-store sales to grow in the low double-digits, but anticipates a loss of 7 to 10 cents a share because of heavier marketing costs and accelerated amortization of its point-of-sale software, which is being replaced with a better, faster system.

The Bombay Company
Earnings per share are fully diluted.
Quarter ended 2/1	2003	2002	Change
(a) Includes a $1.4 million pretax charge in both periods related to the settlement of a wage and hour dispute. The 2002 year also includes a $1.1 million pretax charge related to the departure of the CEO and related costs. (b) Based on average shares outstanding of 34.1 million in the 2002 quarter, 33.1 million in the 2001 quarter, 33.3 million in the 2002 year and 33 million in the 2001 year.
Revenues	$189,264,000	$152,506,000	24.1%
Operating income	23,160,000	18,983,000	22.0%
Net income	(a)13,841,000	11,673,000	18.6%
Earnings per share (b)	0.41	0.35	17.1%
Year ended 2/1	2003	2002	Change
Revenues	$494,000,000	$437,457,000	12.9%
Operating income	12,096,000	6,384,000	89.5%
Net income	(a)7,217,000	3,724,000	93.8%
Earnings per share (b)	0.22	0.11	100.0%

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