Finlay provides expected financial impact of non-renewal of Belk license
09 Jun '06
2 min read
Jewelry retailer Finlay Enterprises Inc has provided additional information on the financial impact of Belk Inc not renewing its license agreement when it expires on January 31st 2007.
As previously announced on May 31st 2006, Finlay recorded approx. $43 million of revenue in fiscal 2005 from its 75 Belk doors. These locations generated approx. $6.5 million of EBITDA and contributed approx. $0.38 per diluted share in fiscal 2005. Although this EBITDA contribution represents over 9 percent of the company's 2005 consolidated EBITDA, it represents approx. 5.5 percent of its field EBITDA contribution, excluding central office costs.
The company is maintaining its previous outlook for fiscal 2006 diluted earnings per share on a consolidated basis in the range of $1.00 to $1.15. This includes the expected impact of closing costs related to Belk's associated with severance and accelerated depreciation totaling approx. $500,000 on a pre-tax basis, or $0.03 per diluted share. Approx. $300,000 of these costs will be a non-cash charge.
As a result of the store closings occurring at the end of fiscal 2006, the full year's results of operations for Belk's will be reclassified out of continuing operations into discontinued operations in the fourth quarter. This will have the impact of decreasing earnings per share from continuing operations in fiscal 2006 by approx. $0.40 and increasing earnings per share from discontinued operations by the same amount. As such, it now expects fiscal 2006 earnings per diluted share from continuing operations, exclusive of central office severance and other closing related costs, to be in the range of $0.35 to $0.50.
marketing@alchempro.com
