Filed by Noodle Kidoodle Inc. pursuant to Rule 425 under the Securities Act of
1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of
1934
Commission File No.: 001-06083
Subject company: Noodle Kidoodle, Inc.
For: NOODLE KIDOODLE, INC.
Approved by: Stewart Katz
President
(516) 677-0500 ext. 202
Investor Contact: Suzanne Rosenberg
/Kara DiCamillo
Press: Michael McMullan
/Kate Talbot
FOR IMMEDIATE RELEASE Morgen-Walke Associates
- --------------------- (212) 850-5600
NOODLE KIDOODLE ANNOUNCES FIRST QUARTER FISCAL 2001 RESULTS -- Company
Obtains $50 Million Credit Facility --
Syosset, NY, May 24, 2000 -- Noodle Kidoodle, Inc. (Nasdaq: NKID) today
announced financial results for the first quarter of fiscal 2001, ended April
29, 2000.
Sales for the first quarter and 13 weeks ended April 29, 2000 increased
5% to $24.1 million from $22.9 million for the same period last year. Same store
sales for the first quarter decreased 15%. Forty-two stores were included in the
Company's comparable store base at the end of the first quarter.
The net loss from continuing operations was $2.5 million, or $0.33 per
share, for the quarter ended April 29, 2000, as compared to a net loss of $1.4
million, or $0.18 per share for the prior-year period. Last year's results do
not include an income tax benefit, but do include a charge of $0.3 million, or
$0.04 per share for the cumulative effect of a change in accounting principle.
All earnings per share figures are the same on both a basic and diluted basis.
Stanley Greenman, Chairman and Chief Executive Officer commented, "Our results
for the first quarter, are in line with our previously announced estimates. The
reduced availability of Beanie Babies(R) resulted in a sharp decrease in sales.
Excluding Beanie Babies(R), sales in comparable stores increased by 1% in the
quarter versus last year. Operating costs increased, when compared to last year,
because of the additional new stores we have opened. This year's first quarter
presented the most difficult comparison against last year."
Mr. Greenman continued, "We are making good progress with plans to
complete our recently announced merger with Zany Brainy and we have submitted
our proxy statement to the SEC for review. The powerful combination of the two
dominant companies in this niche will create a national brand and produce
increased profitability as a result of the tremendous expense leverage and
increased buying power resulting from the merger. We are confident that the
Company's improved operating results and increased visibility will enhance our
shareholders' value."
- more -
<PAGE>
NKID - First Quarter Fiscal 2001 Financial Results
5/24/00
Page 2
Separately, the Company announced today that it has increased its credit
facility with the CIT Group, Business Credit, Inc. to $50 million. The credit
agreement has also been renewed for three years.
Noodle Kidoodle is an innovative specialty retailer of children's
edu-tainment products, which focus on stimulating, educational and non-violent
merchandise. The Company's stores typically include more than 16,000 items
featured throughout 20 in-store departments. Weekly events like sing-a-longs and
storytelling, and fun and interactive play areas like the Kidoodle Corner, and
Computer and Electronic Learning Centers make visiting Noodle Kidoodle fun for
the whole family. Noodle Kidoodle believes that kids learn best when they're
having fun, and is dedicated to expanding children's minds and helping their
imaginations grow. The Company opened its first Noodle Kidoodle store in 1993
and currently operates 60 stores located in New York, New Jersey, New Hampshire,
Connecticut, Texas, Oklahoma, Pennsylvania, Tennessee, Nebraska, Kansas, Florida
and the Boston, Chicago and Detroit metropolitan areas. The Company also sells
merchandise through its World Wide Web site located at
http://www.NoodleKidoodle.com.
Except for historical information contained herein, the statements in this
release are forward-looking and made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve known and unknown risks and uncertainties, which may cause the Company's
actual results in future periods to differ materially from forecasted results.
Those risks include, among other things, the competitive environment in the toy
industry in general and in the Company's specific market areas, inflation,
changes in costs of goods and services and economic conditions in general. Those
and other risks are more fully described in the Company's filings with the
Securities and Exchange Commission.
(Tables to follow)
<PAGE>
NOODLE KIDOODLE, INC.
CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
(In thousands, except per share data)
Thirteen Thirteen
Weeks Ended Weeks Ended
4/29/00 5/1/99
----------- -----------
Net sales $24,072 $22,890
Costs and expenses:
Cost of products sold 15,178 13,900
Selling and administrative 12,695 10,103
------- -------
27,873 24,003
Operating loss (3,801) (1,113)
Interest income 1 80
Interest expense (193) (21)
------- ------
Loss before income taxes and cumulative
effect of a change in accounting principle (3,993) (1,054)
Income taxes (benefit) (1,517) --
------ ------
Loss before cumulative effect of a
change in accounting principle (2,476) (1,054)
Cumulative effect of a change in
accounting principle -- 314
------- ------
Net loss $(2,476) $(1,368)
======= =======
Net loss per share:
Loss before cumulative effect of
a change in accounting principle $ (0.33) $ (0.14)
Cumulative effect of a change in
accounting principle $ -- $ (0.04)
------- -------
Net loss per share (basic and diluted) $ (0.33) $ (0.18)
========= =========
Weighted average shares outstanding: 7,605,000 7,599,000
========= =========
Note 1: This financial information should be read in conjunction with the
financial statements and notes thereto included in the Company's 10-Q for the
period ending April 29, 2000 and 10-K for the period ended January 29, 2000.
Note 2: The Company has approximately $16.0 million in net operating loss
carryforwards. Had the Company operated on a fully taxed basis in the quarter
ended May 1, 1999, the net loss, before the cumulative effect of a change in
accounting principle would have been $0.7 million, or $0.09 per share on both a
basic and diluted basis.
Note 3: Due to the seasonal nature of the Company's business, results from the
interim period are not necessarily indicative of the results to be expected for
the fiscal year.
<PAGE>
NOODLE KIDOODLE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
4/29/00 5/1/99
------- ------
ASSETS:
Cash and cash equivalents $ 541 $ 4,792
Merchandise inventories 34,470 25,901
Prepaid expenses and other current assets 3,093 1,850
Deferred income taxes 2,965 --
--------- ----------
Total current assets 41,069 32,543
Property, plant and equipment (net) 28,931 23,327
Deferred tax assets 4,992 --
Other assets 163 27
--------- ----------
Total Assets $ 75,155 $ 55,897
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable, accrued expenses and taxes $ 19,279 $ 17,556
Revolving loan 8,932 --
Current portion of long term liabilities 23 21
Net liabilities of discontinued operations -- 1,333
--------- ----------
Total current liabilities 28,234 18,910
Commitments and contingencies -- --
Long term liabilities 684 702
Total Stockholders' Equity 46,237 36,285
--------- ---------
Total Liabilities and Stockholders' Equity $ 75,155 $ 55,897
========= ==========
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