Corporate Report

Corporate Report

Chico's FAS reports record year-end results

Naples-based Chico's FAS Inc., the fast-expanding women's clothier, reported record earnings and record sales for the fiscal year ending Jan. 28.

Net income rose 37.4% to a record $194 million, or $1.06 per diluted share, compared to net income of $141 million, or 78 cents per diluted share for the fiscal year ending Jan. 28, 2005. Net sales increased 31.7% to a record $1.4 billion from $1.1 billion in the prior fiscal year. Comparable store sales for the company-owned stores increased 14.3% for the year compared to same-store sales in 2004.

The record performance also pushed the company's operating margins to their highest levels as well - up to 21.2% compared to 21% in fiscal 2004.

For the quarter, Chico's (NYSE: CHS) also reported record results. Net income rose 34.9%, to $44 million, or 24 cents per diluted share, compared to net income of $33 million, or 18 cents per diluted share, in the 13-week fourth quarter ended Jan. 29, 2005. Net sales for the quarter increased 31.6% to a record $376 million. Comparable store sales for the company-owned stores increased 14.6% compared to the same quarter a year ago. Chico's stock recently was trading at $47.41 a share.

Chico's and White House | Black Market brands ended fiscal 2005 with more than $1,000 per net selling square foot, while the company's 10 Soma stores exceeded $450 per net selling square foot on more than $1 million in average sales per store in their first full year of operations.

These results helped generate more than $400 million in cash and marketable securities for the company.

Scott A. Edmonds, Chico's president and chief executive officer, said in a statement, "The success in our Chico's stores over the years has been phenomenal, and we see opportunities for further expansion in the Chico's brand. We are making important investments in our other brands as we transition to a future of multiple platforms for growth.

"Our recent investment in the Fitigues brand, our accelerated rollout of the Soma brand and the continued emphasis on store growth for our particularly successful White House | Black Market brand are positioning the company for what we envision to be sustained long-term growth for our shareholders," Edmonds said.

Edmonds said the company's growth strategies for for fiscal 2006 for Soma and White House | Black Market "is likely to have some short-term downward impact on both our gross margins and our operating margins.

We expect there will be continued pressure on the overall gross margin for each quarter of fiscal 2006, and we anticipate a decline of between 10 and 50 basis points quarter over quarter, with the first half of the year likely to be less impacted than the second half.

Edmonds also said other investments in the company's management information services and store payroll areas are likely to increase the company's selling, general and administrative costs as a percentage of sales.

"We are optimistic that we will be able to manage these costs so as to mitigate the extent of any negative impact on the percentage. Like many other companies, we will be affected by FAS 123R, and we anticipate that these new expensing requirements will reduce annual earnings in fiscal 2006 by between eight and nine cents a share. Excluding the impact of the initial adoption of FAS 123R, we anticipate our earnings to grow in the neighborhood of 25% in fiscal 2006."

Chico's FAS is a specialty retailer of private label, casual-to-dressy clothing, intimates, complementary accessories and other non-clothing gift items. The company operates 780 women's specialty stores, including stores in 47 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico.

CHICO'S FAS

Dollars in thousands; most recent annual results

STATEMENT OF INCOME 1/31/04 1/29/05

Net sales, Chico's/Soma $889,429 $1,095,938

Net sales, White House/Black Market 142,092 261,601

Net sales, catalog, Internet 26,831 36,151

Net sales to franchisees 8,530 10,885

Net sales 1,066,882 1,404,575

Cost of goods sold 411,908 547,532

Gross profit 654,974 857,043

G&A, store operating expenses 398,117 514,529

Depreciation/ amortization 32,481 44,201

Income from operations 224,376 298,313

Interest income, net 2,327 8,236

Income before taxes 226,703 306,549

Income tax provision 85,497 112,568

Net income 141,206 193,981

Per share data:

Net income/common share, diluted 0.78 $1.06

Shares outstanding, diluted 180,149 182,408

BALANCE SHEET

ASSETS 1/29/05 1/28/06

Current Assets

Cash, cash equivalents $14,426 $3,035

Marketable securities, at market 251,199 401,445

Receivables 5,106 7,240

Income taxes receivable - 5,013

Inventories 73,223 95,421

Prepaid expenses 9,429 13,497

Deferred taxes 11,184 12,327

Total Current Assets 364,567 537,978

Property and Equipment: Land, land improvements 6,055 44,893

Building, improvements 29,286 35,573

Equipment, furniture, fixtures 140,360 187,970

Leasehold improvements 166,096 209,342

Total Property and Equipment 341,797 477,778

Less accumulated depreciation/amort. (93,834) (131,846)

Property and Equipment, Net 247,963 345,932

Other Assets:

Goodwill 61,796 61,796

Other intangible assets 34,042 34,041

Other assets, net 7,361 19,666

Total Other Assets 103,199 115,503

TOTAL ASSETS 715,729 999,413

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable 36,725 47,434

Accrued liabilities 58,258 74,586

Current portion of deferred liabilities 332 648

Total Current Liabilities 95,315 122,668

Noncurrent Liabilities:

Deferred liabilities 47,149 65,189

Deferred taxes 12,397 5,129

Total Noncurrent Liabilities 59,546 70,318

Stockholders' Equity:

Common stock 1,790 1,817

Additional paid-in capital 147,652 202,878

Unearned compensation - (3,710)

Retained earnings 411,556 605,537

Accumulated other loss (130) (95)

Total Stockholders' Equity 560,868 806,427

TOTAL LIABILITIES/STOCKHOLDERS' EQUITY 715,729 999,413

Gevity's 2005 results spur

board to increase dividend

Bradenton-based Gevity, a national provider of employment management services for small and medium-sized businesses, reported a 5.6% increase in earnings per share on an 4% increase in revenues for the year ending Dec. 31, 2005.

Fully diluted earnings per share rose to $1.31 in 2005 compared to $1.24 for 2004. Net revenues rose to $608.8 million compared to $585.5 million for 2004.

The company's results prompted Gevity's board of directors to increase its dividend on common shares to a quarterly rate of 9 cents a share, a 28.6% increase over the previous rate. This will mark the company's 21st consecutive dividend, payable April 28 to shareholders of record April 14, 2006.

The board also authorized an additional share repurchase program. In January, Gevity (NASDAQ: GVHR) completed its previously announced share repurchase program - acquiring 1.8 million shares at a cost of $50 million.

Under the new share repurchase program, the board authorized the purchase of up to 1 million additional shares. Share repurchases under the new program may be made through open market repurchases, block trades or in private transactions at such times and in such amounts as the company deems appropriate. Gevity's shares recently were trading around $30 a share.

Said Erik Vonk, Gevity's chairman and chief executive officer: "These actions demonstrate our confidence in Gevity's future and further validate our commitment to building long-term value and returns for our shareholders.

"In 2005 we delivered on our stated growth and profitability goals and completed the final stages of the three-year transition of our business model," Vonk said.

Part of the transition included being able to offer Gevity clients multi-carrier health benefits choices and a workers' compensation option with far less risk exposure.

As a result, Vonk said, "Our company is now fully focused on accelerating growth based on the transfer of HR value to our clients, rather than on the assumption of medical or workers' compensation risk. We expect this to have a positive impact on our financial model as we increasingly generate more professional service fees and depend less on volatile insurance contributions."

These changes also are contributing to Vonk's forecast that the company expects to generate double-digit growth in revenues, client employee count and earnings in 2006.

GEVITY

Dollars in thousands

STATEMENT OF INCOME 2004 2005

Revenues $585,481 $608,797

Cost of services 406,140 413,807

Gross profit 179,341 194,990

Operating expenses:

Salaries, wages, commissions 71,803 76,033

Other G&A 41,809 49,312

Depreciation and amortization 14,168 14,635

Total operating expenses 127,780 139,980

Operating income 51,561 55,010

Interest income, net 833 978

Other expense, net (101) -

Income before income taxes 52,293 55,988

Income tax provision 17,675 18,610

Net income 34,618 37,378

Non-recurring, non-cash charge (1) 29,317 -

Non-cash charges (2) 129 -

Series A convertible, preferred stock dividends 434 -

Net income 4,738 37,378

Net income per common share, diluted 0.18 1.31

Weighted avg. common shares

outstanding, diluted 25,735 28,534

(1) - Attributable to the acceleration of the unamortized discount associated with the conversion into common stock of all shares of the Series A convertible, redeemable preferred stock (2) Attributable to beneficial conversion feature and accretion of redemption value of the Series A convertible, redeemable preferred stock

BALANCE SHEET

ASSETS 12/31/04 12/31/05

Current assets:

Cash, cash equivalents 40,776 52,525

Marketable securities – restricted 10,201 4,314

Accounts receivable, net 99,790 113,864

Short-term workers' compensation receivable, net 33,405 32,552

Other current assets 5,982 15,713

Total current assets 190,154 218,968

Property and equipment, net 10,079 13,810

Long-term marketable securities - restricted 8,435 7,891

Long-term workers' compensation receivable, net 79,310 95,766

Intangible assets, net 40,133 30,494

Goodwill and other assets 11,476 20,940

Total assets 339,587 387,869

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accrued payroll, payroll taxes 111,687 152,940

Accrued insurance premiums, insurance reserves 23,191 20,536

Customer deposits, prepayments 11,897 8,315

Deferred tax liability, net 1,718 31,567

Accounts payable, other accrued liabilities 18,335 11,841

Total current liabilities 166,828 225,199

Other long-term liabilities 7,585 7,255

Total liabilities 174,413 232,454

Total shareholders' equity 165,174 155,415

Total liabilities, shareholders' equity 339,587 387,869

+ Colliers Arnold begins new

real estate projects division

Colliers Arnold, an independent commercial property firm with offices in Tampa, Orlando, Fort Myers and Clearwater, started a new division, Arnold Development Advisors. The new division will evaluate, design and manage the construction for major commercial real estate projects.

Lee Arnold, chairman of Colliers Arnold Commercial Real Estate Services Inc. named Rick Fourie vice president of the new division. Fourie will focus on every aspect of each project, including establishing project budgets, assembling project teams and evaluating design. Fourie has more than 13 years of architectural, institutional, hotel, commercial, high-end residential and condominium construction experience. He has directed design and construction teams that have completed more than 200 high-end projects, with budgets ranging up to $1.7 billion, a Colliers Arnold press release stated.

+ Abel Band opens

Tallahassee office

Sarasota-based law firm Abel Band, Chartered, opened an office in Tallahassee to focus on clients in the public utilities field. The office will be used primarily by Steven Denman and William Cox, lawyers in the firm who practice utilities, energy and telecommunications law, a firm release stated.

Both lawyers have represented clients before state and federal regulatory agencies, in cases involving a wide variety of electric, natural gas, telecommunications, water, and transportation utility issues.

Denman and Cox have also negotiated major utility-related transactions and agreements, particularly in the areas of public utility mergers and acquisitions.

+ Florida Gulf Bank continues expansion near Fort Myers

Florida Gulf Bank plans to build a full-service branch near the intersection of Colonial Boulevard and Six Mile Cypress Parkway in Fort Myers. This will be the banks seventh new location in the past five years. The bank opened its first branch on First Street in downtown Fort Myers in February, 2001. The main office on College Parkway in Fort Myers opened in June 2001; the Summerlin Crossing branch opened in April, 2003; the first Cape Coral office at Coral Pointe Mall opened in December, 2004; an office on Daniels Road opened in January, 2005; and a sixth full-service office will begin construction this summer at the intersection of Veterans Parkway and Surfside Boulevard in Cape Coral.

Florida Gulf Bank was recently ranked 12th in the nation by America's Community Bankers. It has an asset base of approximately $300 million and deposits of nearly $250 million.

+ St. Petersburg-Clearwater Airport begins flights to U.K.

British air carrier Flywho will start international flights from St. Petersburg-Clearwater International Airport to United Kingdom Birmingham International Airport (BIA) beginning in July. Flywho selected St. Petersburg-Clearwater and Orlando-Sanford as the two destinations in Florida that will carry flights to BIA, UK's second largest airport outside of London. Non-stop flights to St Petersburg-Clearwater will arrive and depart each Thursday.

+ Tampa bank handles

sale of company

Tampa investment bank Hyde Park Capital Advisors LLC advised Coral Springs-based Pulsar Technologies Inc. on its recent sale to Pennsylvania electronic instruments manufacturer AMETEK Inc. Privately-held Pulsar, which makes specialized communications equipment for electric utilities, has annual sales of about $10 million. No sale price was disclosed by AMETE, which lists its shares on the New York Stock Exchange.

+ Morgan Beaumont expands relationship with tech firm

Bradenton-based technology firm Morgan Beaumont Inc. is expanding its partnership with Heathrow-based Products Benefits Systems Corp., a privately owned company. The expanded relationship means Morgan Beaumont will be able to increase its sales opportunities for all SIRE Network products and services to the PBS customer base. PBS will maintain an office and locate its servers at Morgan Beaumont's data center in Bradenton. Morgan Beaumont's technical staff will maintain, monitor and operate PBS' servers and data processing activities.

+ First Advantage looks

to expand in the Northeast

St. Petersburg-based risk mitigation firm First Advantage Corp., acquired the assets of National Data Verification Service, a New England-based employment screening company owned by Chex Systems Inc. The transaction was completed to expand First Advantage's employment screening market share in the northeast.

+ Harvey Software sees

first product in Asia

Fort Myers-based Harvey Software reached an agreement with LeCroy Corp. to use Harvey Software's new CPS shipping system for Asia-based shippers at LeCroy's newest facility in Malaysia. The CPS shipping system will be Harvey Software's first product for the Asian market and will specialize in international shipment services.

+ Karen Magee awarded

two development contracts

Sarasota-based Karen Magee and Associates, a business consulting and training firm, was awarded two contracts in the Sarasota/Manatee area. The Bradenton Front Porch, which receives grant funding through Gov. Jeb Bush's Front Porch Florida Initiative, awarded the firm a contract to provide three 15-hour training sessions to middle school and high school students. Students will receive training on how to write a business plan and upon completion will receive $500 in venture capital from The Bradenton Front Porch.

The Community Entrepreneur Opportunity (CEO) program, provided by the City of Sarasota Enterprise Zone and funded by a grant from Comerica Bank, awarded the company a contract to provide training for the 12-week spring program.

RedVector gets

$2 million for growth

Tampa-based RedVector Inc., which provides online education for architects, engineers and contractors, received a $2 million investment from BOCF LLC, a subsidiary of Delaware-based Stonehenge Capital Co., a national private equity and venture capitalist firm. RedVector will use the money for growth capital and buy back stock from existing shareholders.

ETC...

• Coast Financial Holdings Inc., parent company of Coast Bank of Florida, opened a new branch in Pinellas County. The Dunedin branch is located at 2046 Bayshore Blvd.

• Gold Bank opened a new, full-service office in Brandon, located on the southwest corner of John Moore Road and Bloomingdale Avenue.

• The Manatee Chamber of Commerce added blogging to its Web site. The Chamber's new blogging is located at: www.ManateeChamber.com/Blog/Blog.html. The chamber also recently posted its first "podcast" on its Web site. It features Dr. Hank Fishkind discussing the economic forecast for Manatee County, Florida and the nation.

• The RETEC Group Inc., an environmental consulting and engineering firm, opened its Tampa office at 8875 Hidden River Parkway, Suite 300.