Vans, Inc. announced that Andrew J. Greenebaum, Chief Financial Officer, has decided to leave his position for personal reasons, effective as of August 30, 2003. In conjunction with Mr. Greenebaum's resignation, Scott J. Blechman has been appointed the Company's Chief Financial Officer. Mr. Blechman, a certified public accountant, has served as Vice President of Finance at Vans since July 2001 and Controller since September 2002. Mr. Blechman was formerly Vice President and Corporate Controller of Castle & Cooke, a large real estate developer that was publicly traded at the time of his employment. Prior to joining Vans, he was Vice President of Finance and Controller of eCompanies, LLC.
Vans also stated that first quarter same-store sales are currently trending up approximately 13% and consequently, the Company is now comfortable with the high end of its previously announced first quarter fiscal 2004 base business earnings per share guidance of $0.55 to $0.58.
Gary H. Schoenfeld, President and Chief Executive Officer of Vans, said, “Andrew has played an important role in the Company's turnaround and while we are sorry to see him leave, we thank him for his considerable contributions and wish him well in his future endeavors. Over the past few years we have assembled a strong financial team and instituted a number of operational controls that have benefited our performance and set the stage for renewed earnings growth. Looking ahead, I have a tremendous amount of confidence in Scott's ability to further build on what we have accomplished and help lead Vans into the future.”
Mr. Greenebaum commented, “I have truly enjoyed my time at Vans and believe it is one of the most innovative and authentic footwear companies in the industry. I would like to extend my thanks to Gary and everyone at Vans for their hard work, support and dedication during this period. The positive momentum in the business continues and I believe the pieces are in place for long-term success. While this was a difficult decision for me to make, I believe the timing is right and I wish the Company all the best.”
Commenting on current business Mr. Schoenfeld added, “The strong comp turnaround that we experienced in the fourth quarter has continued thus far into the first quarter and the beginning of back-to-school, with very positive reaction to our new footwear and apparel resulting in double digit comp gains. We feel confident that we will achieve the high end of our previous earnings guidance for the base business in the first quarter…”
The Company also stated that it has reached resolution on three of the five remaining skateparks it has actively been discussing with landlords with a fourth agreement still possible prior to the end of the first quarter. The terms of these transactions are consistent with previous guidance, but an earlier resolution of negotiations for some of the remaining parks may result in a shift in the timing of the expected lease termination costs associated with those negotiations from the second quarter to the first quarter, assuming the negotiations are completed by the end of the quarter.
Mr. Schoenfeld concluded, “I continue to be pleased with the progress we are making on several of our key initiatives. The strong comp store gains validate both the ongoing strength of our brand and our heightened commitment to great product and we believe also bodes well for our growth prospects for the balance of the year.
Vans, Inc.
Reconciliation of GAAP Guidance to Base Business Guidance
(Amounts in millions, except per share amounts)
The Company's results of operations and any forward looking guidance
include the effects of significant transactions and events affecting
earnings that vary widely and unpredictably in nature, timing, and
amount. The following tables reconcile our GAAP guidance to our Base
Business guidance, as defined below, for the periods indicated. This
guidance is meant to provide useful information to investors because
the Company has made a strategic decision to exit the skatepark
business, with the exception of one or two strategic skatepark
locations which the Company may keep open primarily to promote brand
awareness. The information in the schedule below is not considered
to be an alternative to guidance given in accordance with GAAP.
Base
Business
Excluding
Skatepark Skatepark
Operations Operations
Revised Q1 & Q2 Fiscal 2004 Total And Lease and Lease
Guidance as of August 13, Guidance Termination Termination
2003: Per GAAP Charges (A) Charges (B)
---------------------- ---------------- -------------- -------------
Full Year Fiscal 2004 No change from prior guidance
---------------------
Q1 Fiscal 2004
----------------------
Total revenues $127 $125
to to
$129 Approx. $2 $127
Gross profit percentage Approx. 44% Approx. 70% Approx. 43.5%
Operating expenses, $45
including lease to
termination charges $47 Approx.$4 to $6 Approx. $41
Earnings (loss) per
share $0.33 $(0.10)
to to
$0.48 $(0.25) Approx. $0.58
Q2 Fiscal 2004
----------------------
Earnings (loss) per
share $(0.33) $(0.05) $(0.28)
to to to
$(0.57) $(0.25) $(0.32)
Six-month period ending
May 31, 2004 No change from prior guidance
----------------------
Previous Guidance as
of July 17, 2003:
----------------------
Full Year Fiscal 2004
----------------------
Total revenues $325 $320
to to
$335 Approx. $5 $330
Gross profit percentage 46% 46%
to to
47% Approx. 70% 47%
Operating expenses, including $150 $140
lease termination charges to to
$155 Approx. $10 $145
Effective tax rate Approx. 70% 0% 20%
to
22%
Earnings (loss) per share Approx. Approx. $(0.40) $0.35
breakeven to
$0.40
Q1 Fiscal 2004
----------------------
Total revenues $125 Approx. $2 $123
to to
$128 $126
Gross profit percentage Approx. 44% Approx. 70% Approx. 44%
Operating expenses, including
lease termination charges Approx.$43 Approx. $2 Approx. $41
Earnings (loss) per share $0.53 $0.55
to to
$0.56 $(0.02) $0.58
Q2 Fiscal 2004
----------------------
Earnings (loss) per share $(0.58) $(0.30) $(0.28)
to to to
$(0.67) $(0.35) $(0.32)
Six-month period ending
May 31, 2004
----------------------
Earnings (loss) per share $0.00 $(0.06) Approx. $0.10
to to
$0.05 $(0.08)
