Neiman Marcus 2006 Annual Report Download - page 32

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OPERATING RESULTS
Performance Summary
The following table sets forth certain items expressed as percentages of net revenues for the periods indicated.
Fiscal year
ended
July 28,
2007
Fiscal year
ended
July 29,
2006
Forty-three
weeks
ended
July 29,
2006
Nine weeks
ended
October 1,
2005
Fiscal year
ended
July 30,
2005
(Successor) (Combined) (Successor) (Predecessor) (Predecessor)
Revenues 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of goods sold including buying and occupancy
costs (excluding depreciation) 62.7 64.3 65.3 58.8 63.6
Selling, general and administrative expenses
(excluding depreciation) 23.1 23.8 23.6 24.6 24.6
Income from credit card program (1.5) (1.4) (1.5) (1.2) (1.9)
Depreciation expense 3.1 3.1 3.1 3.0 2.8
Amortization of customer lists 1.2 1.1 1.3 — —
Amortization of favorable lease commitments 0.4 0.4 0.4 — —
Other expense, net — — — — —
Transaction and other costs — 0.6 — 3.7 —
Loss on disposition of Chef's Catalog — — — — 0.4
Gain on credit card sale — — — — (0.2)
Operating earnings 10.9 8.2 7.6 11.1 10.8
Interest expense (income), net 5.9 5.4 6.4 (0.1)0.3
Earnings from continuing operations before income
taxes 4.9 2.8 1.2 11.3 10.4
Income taxes 1.9 1.0 0.4 4.1 3.8
Earnings from continuing operations 3.1 1.8 0.8 7.1 6.6
(Loss) earnings from discontinued operations, net
of taxes (0.5)(0.4)(0.4) (0.1)0.1
Net earnings 2.5%1.4%0.4% 7.0%6.7%
In connection with the Transactions, the Company incurred significant indebtedness and became highly leveraged. See
"Liquidity and Capital Resources." In addition, the purchase price paid in connection with the Acquisition was allocated to state the
acquired assets and liabilities at fair value. The purchase accounting adjustments increased the carrying values of our property and
equipment and inventory, established intangible assets for our tradenames, customer lists and favorable lease commitments and revalued
our long-term benefit plan obligations, among other things. Subsequent to the Transactions, interest expense and non-cash depreciation
and amortization charges have significantly increased. As a result, our Successor financial statements subsequent to the Transactions are
not comparable to our Predecessor financial statements.
29