Restoration Hardware Announces 4th Quarter and Year End Results

Furniture World Magazine

Restoration Hardware, Inc., announced financial results for the thirteen week quarter and year ending February 2, 2002. The Company also announced that it will be restating financial results for the first three quarters of fiscal 2001, and the four quarters and fiscal year 2000. Financial Results Restatement: The Company is currently in the process of registering certain shares of common stock for resale with the Securities and Exchange Commission. As part of the SEC review process, the Company has provided the SEC with information showing the effects of the recognition of furniture revenue at the time of shipment, versus the time of delivery to the customer. The Company had been recognizing furniture revenue at the time of shipment. The Company concluded, that the proper way to account for these sales is at the time of delivery. The Company will restate its financial results for the first three quarters of fiscal 2001 and the four quarters and fiscal year 2000. The restatement will result in a transfer of revenues and income from one period to the next for furniture that is in transit to the customer's home at the end of any period. The restatement will not have any effect on cash, receivables, accounts payable, or debt. The restatement is equal to the reduction in sales for the amount of furniture in transit at the end of the quarter, offset by the incremental sales to be recognized from the prior quarters' in transit amount. The Company expects the anticipated effect of the change in revenues from amounts previously reported to be no more than $5.0 million in any fiscal quarter and no more than $3.5 million for the fiscal year ended February 3, 2001. The Company expects effects of the restatement on net income to range from $50,000 to $450,000 in any fiscal quarter, not to exceed $400,000 for the fiscal year ended February 3, 2001. The Company expects the anticipated effects of the restatement on earnings per share to range from $0.01 to $0.03 per share in any fiscal quarter and not to exceed $0.03 per share for the fiscal year ended February 3, 2001. Gary Friedman, CEO commented, "Fiscal 2001 was a year of transition for Restoration Hardware, as we focused on repositioning the Company for long term profitable growth. I am pleased to report we have significantly improved the Company's balance sheet, ending the year with $22.3 million in cash, and no bank debt, improving liquidity by $61 million versus a year ago. We accomplished this while eliminating approximately 5,000 under-performing skus, and editing our assortment by 30%. " Mr. Friedman continued, "We are on schedule to unveil our new strategy April 9th, which includes the remodeling of our stores, a completely redesigned catalog and web site, and the introduction of a premium positioned home textiles collection. All of our store, district and regional managers attended a kickoff meeting this month in San Francisco. The team is prepared and motivated to bring our strategy to life in Restoration Hardware stores across the country." About Restoration Hardware, Inc.: Restoration Hardware, Inc. is a specialty retailer of home furnishings, functional and decorative hardware and related merchandise that reflects the Company's classic and authentic American point of view. Restoration Hardware sells its merchandise offering through its retail stores, catalog (800-762-1005) and on-line at http://www.restorationhardware.com.