Finlay Reports Losses of $55.7 Million

Finlay Enterprises Inc. yesterday announced a net loss of $55.7 million for fiscal 2005, which ended January 28, 2006. Profits were affected by the Federated/May merger and subsequent store closures. Fiscal 2005 net income totaled $19.5 million, compared to $20.8 million for fiscal 2004. Net income, including closing costs was $17.2 million in 2005, and $16.0 in 2004

Total sales for fiscal 2005 were $990.1 million, compared to $923.6 million in 2004, an increase of 7.2 percent. Comparable department sales, including discontinued stores, increased 0.7 percent.

For the fourth quarter, Finlay reported net income of $28.7 million, which includes pre-tax income charges of $2.1 million, compared to net income of $28.1 million for 2004 (Excluding an after-tax credit of $0.8 million).

Sales increased 10.7 percent to $421.4 million for the fourth quarter, compared to $380.6 million in the same period a year ago. Comparable department sales, including discontinued stores, increased 0.8 percent.

Arthur E. Reiner, Finlay chairman and CEO said the company's performance was, "a solid finish to a year in which our business was faced with significant change and uncertainty relating to the department store industry consolidation. We increased our bottom line by 10 percent in the fourth quarter excluding closing costs and one-time items. During the year, we completed our Carlyle acquisition, which diversifies our business and provides other avenues for future growth.”

Reiner says the company is viewing 2006 as a "transition year, one in which we will be closing or transferring approximately 190 doors to Federated by the end of spring 2006."

The company also announced their first quarter expectations. Sales from continuing operations for the first quarter are projected to be in the range of $155 to $165 million. Including discontinued operations, sales are projected to increase 20 percent to 25 percent over last year's first quarter as a result of the closing stores and the addition of Carlyle.