Content provided in partnership with

Business Services Industry

Design Within Reach, Inc. Reports First Quarter 2008 Results

Business Wire, May 8, 2008

* First Quarter Net Sales Increase 7% to $47M

* Gross Profit Margin Expands 550 Basis Points to 47.3%

SAN FRANCISCO -- Design Within Reach, Inc. (NASDAQ:DWRI) today announced financial results for the first quarter ended March 29, 2008.

First Quarter Results:

* Product sales for the first quarter of 2008 increased 6.4% to $43.3 million, compared to $40.7 million recorded in the first quarter of 2007, primarily driven by increased studio sales. Net sales, which are comprised of product sales and shipping revenue, increased 7.0% to $46.9 million in the first quarter of 2008 from $43.8 million in the same period last year.

Most Popular Articles in Business: Research and Markets : Tesco Plc - SWOT Framework Analysis; Do Us a Flavor - Ben & Jerry's Issues a Call for Euphoric New Flavors; eBay made easy: ready to start an eBay business? These 5 simple steps will ...; Katrina's lawsuit surge: a legal battle to force insurers to pay for flood ...; Wal-Mart's newest distribution center opened last month near the southwest ...; More »

* Gross profit margin improved to 47.3% in the first quarter of 2008, compared to 41.8% in the same period last year.

* Product margin, which the Company defines as product gross profit divided by net product sales, was 50.5% for the first quarter of 2008, compared to 45.6% in the first quarter of 2007. For more information regarding the calculation of product margin, please see the discussion under the heading "Non-GAAP Financial Information" below.

* Selling, general and administrative expenses were $23.4 million for the first quarter of 2008, compared to $22.2 million in the same period last year. As a percentage of net sales, these expenses decreased to 49.8% in the first quarter of 2008, from 50.7% in the same period last year, primarily resulting from leveraging of expenses and higher sales.

* Loss before income tax benefit for the first quarter of 2008 was $1.3 million, compared to a loss before income tax benefit of $3.8 million in the same period last year. Net loss for the first quarter of 2008 was $0.6 million, or $(0.04) per diluted share, compared to a net loss of $3.8 million, or $(0.26) per diluted share, in the first quarter of 2007. An income tax benefit of $0.7 million was recorded in the quarter ended March 29, 2008, compared to no income tax benefit in the first quarter of 2007.

"Our first quarter results demonstrate our skilled management team's and employees' abilities to drive sales and leverage expenses in a challenging economic environment," said Ray Brunner, Chief Executive Officer. "We continue to build brand awareness through our innovative catalog, mass media and online marketing programs, as well as our recently redesigned DWR website. Tools for Living remains on track with an expanded range of products and two stores scheduled to open in New York and Los Angeles in the fall. As we continue to build a strong financial and operational foundation for long-term sustainable growth, we remain committed to not only providing well designed modern luxury goods, but also ensuring that our growth initiatives warrant the effort and return on invested capital."

Net sales by sales channel were as follows:

* Studio sales were $31.3 million in the first quarter of 2008, up 9.9% from the same period last year, resulting primarily from increased sales at existing studios. Design Within Reach operated 68 studios and the DWR Annex, an outlet for returned and discontinued merchandise, at the end of the first quarter of 2008, compared to 64 studios and one outlet open at the end of the first quarter of 2007. Incremental sales from the four additional studios amounted to $0.7 million.

* Direct sales (including phone sales and sales through the Design Within Reach website) were $10.6 million in the first quarter of 2008, a decrease of approximately 3.6% from $11.0 million in the first quarter of 2007.

As of March 29, 2008, Design Within Reach had approximately $6.5 million in cash and cash equivalents, outstanding borrowings of $2.5 million under its revolving credit facility and $1.1 million in outstanding letters of credit. The Company had approximately $16.4 million available for advances under its revolving credit facility as of March 29, 2008. The Company believes that its cash and cash equivalents, anticipated cash flow from operations and availability under its credit facility will provide sufficient working capital to fund operations and anticipated capital expenditures for the next 12 months.

Guidance

Design Within Reach is maintaining its 2008 sales guidance of approximately $200 million and diluted earnings per share guidance of $0.03-$0.05.

Conference Call

Design Within Reach, Inc. will host a conference call today, May 8, 2008 at 1:30 p.m. Pacific (4:30 p.m. Eastern) with Ray Brunner, President and Chief Executive Officer, and John Hellmann, Chief Financial Officer. To access the conference call, participants in North America should dial (888) 259-8387 and international participants should dial (913) 312-1487. Participants are encouraged to dial in to the conference call five to ten minutes prior to the scheduled start time. The call will also be broadcast live over the Internet and accessible through the Investor Relations section of the Company's website at www.dwr.com. The webcast will also be archived online within one hour of the completion of the conference call and available at www.dwr.com. A telephone replay will be available through May 22, 2008. To access the replay, please dial 888-203-1112 (domestic) or 719-457-0820 (international), passcode 5269046.

Business Services Industry

Design Within Reach, Inc. Reports First Quarter 2008 Results

Business Wire, May 8, 2008

Find Research Guides for:

Find Featured Titles for: News

Most Popular Articles in Business

Most Popular Publications in Business