FCPO Factory Card & Party Outlet (MM)

Factory Card & Party Outlet Corp. (NASDAQ:FCPO) today announced results for the 2006 fiscal fourth quarter and full year ended February 3, 2007. For the quarter, net sales increased 9.6 percent to $63.8 million, compared with $58.3 million for the fourth quarter of last year. Comparable store net sales for the fourth quarter increased 1.6 percent from the prior year�s same period (prior year quarter adjusted for 14th week). As is consistent with the National Retail Federation fiscal calendar, the fiscal quarter ended February 3, 2007, was 14 weeks compared to the prior year fiscal quarter ended January 28, 2006, which was 13 weeks. Accordingly, the fiscal year ended February 3, 2007 was 53 weeks and the prior fiscal year ended January 28, 2006, was 52 weeks. Net income for the 2006 fiscal fourth quarter was $0.2 million, or $0.08 per basic share and $0.07 per diluted share, versus a net loss of $1.2 million, or a $0.38 per share loss for the same period last year. Net sales for the 2006 fiscal year increased 4.8 percent to $244.2 million, compared with $233.1 million a year ago. Comparable store net sales increased 1.1 percent from the prior fiscal year (prior year adjusted for 53rd week). The company reported a net income for the 2006 fiscal year of $2.3 million or $0.71 per basic share and $0.67 per diluted share, versus a net loss of $1.0 million, or a $0.33 per share loss for the prior fiscal year. During the year, the company opened seven new locations and closed eight. Gary W. Rada, President and Chief Executive Officer commented �Our team successfully executed several major initiatives in 2006 designed to grow sales, increase gross profit, lower expenses and improve our balance sheet. We are especially pleased with both our relationship marketing results and our ever improving supply chain capabilities. Last year�s database marketing initiatives now give us the capability to directly promote our brand to the more than 3.7 million loyal customers that shop our retail locations and web-store throughout the year. Our supply chain initiatives now enable us to source over 90% of all merchandise through our distribution center, providing better inventory control and increased leverage throughout our operation.� Mr. Rada further added, �Achieving $0.71 per basic share for 2006 was not only a significant achievement for the fiscal year, but a great foundation for the future as we focus our energies on both the company�s operations and the exploration of strategic alternatives, including a potential sale of the company.� About Factory Card Factory Card & Party Outlet (www.factorycard.com) based in Naperville, Illinois, is the largest publicly traded retail party chain in the United States. Factory Card & Party Outlet currently operates 185 company-owned retail stores in 20 states, offering a wide selection of party supplies, greeting cards, giftwrap, balloons, everyday and seasonal merchandise, and other special occasion merchandise at everyday value prices. Certain statements in this news release constitute �forward-looking statements� within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, year-end adjustments and other factors that may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements express or implied by such forward-looking statements. In general, the results, performance or achievements of the company and its stores and the value of the company�s common stock are dependent upon a number of factors including, without limitation, the dependence on key personnel; competition, ability to anticipate merchandise trends and consumer demand; ability to maintain relationships with suppliers; successful implementation of information systems; successful handling of merchandise logistics; inventory shrinkage; ability to meet future capital needs; governmental regulations; and other factors both referenced and not referenced in the company�s filings with the Securities and Exchange Commission. FACTORY CARD & PARTY OUTLET CORP. AND SUBSIDIARY � Consolidated Balance Sheets (Dollar amounts in thousands, except per share data) � � � February 3,2007 January 28,2006 ASSETS � Current assets: Cash $ 446� $ 196� Merchandise inventories, net 45,130� 49,552� Prepaid rent 2,994� 3,304� Prepaid expenses and other 1,511� 1,302� Deferred tax asset, net 5,491� 3,728� Total current assets 55,572� 58,082� � Fixed assets, net 9,400� 10,247� Other assets 131� 104� Deferred tax asset, net 5,929� 8,869� � Total assets $ 71,032� $ 77,302� � LIABILITIES AND STOCKHOLDERS� EQUITY � Current liabilities: Line of credit $ 8,731� $ 19,532� Accounts payable 16,908� 19,266� Accrued expenses: Payroll and other compensation 6,430� 4,167� Insurance 1,205� 900� Taxes 1,064� 872� Other 2,896� 2,640� Capital lease obligations 1� 15� Total current liabilities 37,235� 47,392� � Deferred rent liabilities 1,913� 1,606� � Total liabilities 39,148� 48,998� � Stockholders� equity: Common stock, $.01 par value. Authorized10,000,000 shares; 3,353,454 and 3,138,252shares issued and outstanding atFebruary 3, 2007 and January 28, 2006, respectively � 33� � 31� Unearned restricted stock awards -� (142) Additional paid-in capital 26,562� 25,714� Accumulated earnings 5,289� 2,701� � Total stockholders� equity 31,884� 28,304� � Total liabilities and stockholders� equity $ 71,032� $ 77,302� FACTORY CARD & PARTY OUTLET CORP. AND SUBSIDIARY � Consolidated Statements of Operations (Dollar amounts in thousands, except per share data) � � For the 14weeks endedFebruary 3,2007 For the 13weeks endedJanuary 28,2006 For the 53weeks endedFebruary 3,2007 For the 52weeks endedJanuary 28,2006 � Net sales $ 63,833� $ 58,257� $ 244,232� $ 233,131� Cost of sales 40,914� 38,249� 154,511� 149,378� Gross profit 22,919� 20,008� 89,721� 83,753� Selling, general and administrative expenses 21,535� 21,201� 81,874� 81,974� Depreciation expense 857� 827� 3,271� 2,832� Interest expense 151� 256� 855� 804� Income (loss) before income taxes 376� (2,276) 3,721� (1,857) Income tax expense (benefit) 128� (1,099) 1,438� (854) Net income (loss) $ 248� $ (1,177) $ 2,283� $ (1,003) � � Net income (loss) per share � basic $ 0.08� $ (0.38) $ 0.71� $ (0.33) � Weighted average shares outstanding � basic 3,281,180� 3,089,418� 3,228,457� 3,074,034� � Net income (loss) per share � diluted $ 0.07� $ (0.38) $ 0.67� $ (0.33) � Weighted average shares outstanding - diluted 3,468,995� 3,089,418� 3,416,278� 3,074,034�