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Neiman Marcus Group Sales Rise 4% in FY 2014, Profits Plunge on Acquisition Costs

Neiman Marcus Group LTD LLC reported financial results for the fourth quarter and fiscal year ended August 2, 2014.

In the fourth quarter, total revenues were $1.11 billion, a slight increase over revenues of $1.12 billion in the fourth quarter of fiscal 2013. Comparable-store sales, which include e-commerce, increased 4.9%.

The company reported a net loss of $42.1 million for the fourth compared to net income of $2.9 million in the fourth quarter of 2013. Excluding purchase accounting and other expenses related to the acquisition of the company by an investor group in October last year, the company’s adjusted net loss for the fourth quarter of fiscal year 2014 was $12.9 million, compared to adjusted net earnings of $10.8 million in the fourth quarter of fiscal year 2013.

Excluding the acquisition- and transition-related charges, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) fell 0.9% to $105.8 million from $106.8 million.

For fiscal year 2014, the company reported total revenue of $4.84 billion, a 4 percent  increase compared to $4.65 billion in the prior year. Comparable-store sales increased 5.5%. Earnings swung to a net loss of $147.2 million compared to net income of $163.7 million in the prior year. Excluding charges, the company’s adjusted net earnings for fiscal 2014 were $137.8 million compared to adjusted net earnings of $200.3 million in the prior year. For the full year, adjusted EBITDA rose 0.9% to $677.6 million from $671.5 million.

On October 25, 2013, Neiman Marcus Group announced the completion of the company’s acquisition by an investor group led by private investment funds affiliated with Ares Management, L.P. and Canada Pension Plan Investment Board.

On September 15, 2014, the company announced that it signed an agreement to acquire the MyTheresa.com global online luxury website and the Theresa flagship specialty store in Munich, Germany. The purchase price is approximately 150 million euro ($194 million), subject to certain adjustments, and an earn-out based on future performance. The transaction is expected to close later this year, subject to regulatory approvals and other customary closing conditions. The Company plans to finance the acquisition through a combination of cash and debt.