Neiman Marcus 2009 Annual Report Download - page 29

Table of Contents
improvement in operating earnings. We held cash balances of $421.0 million at July 31, 2010 compared to $323.4
million at August 1, 2009. At July 31, 2010, we had no borrowings outstanding under our Asset-Based Revolving Credit
Facility, $31.1 million of outstanding letters of credit and $508.9 million of unused borrowing availability.
Given the challenging economic and retail environment, we elected to pay non-cash interest for the three quarterly
interest periods ending October 14, 2009 with the issuance of additional Senior Notes instead of paying interest in cash.
As a result, the original principal amount of Senior Notes of $700.0 million increased by $17.1 million in April 2009,
$17.4 million in July 2009 and $18.1 million in October 2009. We have elected to pay cash interest since the first
quarter of fiscal year 2010. After October 15, 2010, we are required to make all interest payments on the Senior Notes
entirely in cash.
• Outlook— We do not anticipate the return of consumer spending to historical levels in the near-term. We plan to
maintain an appropriate alignment of our inventory levels and purchases with anticipated customer demand. We believe
the cash generated from our operations along with our cash balances and available sources of financing will enable us to
meet our cash obligations for fiscal year 2011.
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 31, August 1, August 2,
2010 2009 2008
Revenues 100.0% 100.0% 100.0%
Cost of goods sold including buying and occupancy
costs (excluding depreciation) 65.5 69.6 63.8
Selling, general and administrative expenses (excluding
depreciation) 24.0 24.2 22.7
Income from credit card program, net (1.6) (1.4) (1.4)
Depreciation expense 3.8 4.1 3.2
Amortization of intangible assets 1.5 1.5 1.2
Amortization of favorable lease commitments 0.5 0.5 0.4
Impairment charges — 19.3 0.7
Other income — — (0.7)
Operating earnings (loss) 6.3 (17.9) 10.1
Interest expense, net 6.4 6.5 5.2
Operating (loss) earnings before income taxes (0.1) (24.4) 4.9
Income tax (benefit) expense (0.1)(6.1)1.8
Net (loss) earnings (0.0)% (18.3)% 3.1%
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