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8-K - 8-K - GENESCO INCd310858d8k.htm
EX-99.3 - EX-99.3 - GENESCO INCd310858dex993.htm
EX-99.2 - EX-99.2 - GENESCO INCd310858dex992.htm

Exhibit 99.1

Financial Contact:         James S. Gulmi (615) 367-8325

Media Contact:               Claire S. McCall (615) 367-8283

GENESCO REPORTS FOURTH QUARTER,

FISCAL 2012 RESULTS

—Fourth Quarter Comparable Store Sales Increased 12%—

NASHVILLE, Tenn., March 2, 2012 — Genesco Inc. (NYSE:GCO) today reported earnings from continuing operations for the fourth quarter ended January 28, 2012, of $41.5 million, or $1.72 per diluted share, compared to earnings from continuing operations of $31.4 million, or $1.34 per diluted share, for the fourth quarter ended January 29, 2011. Fiscal 2012 fourth quarter results reflect pretax items of $3.7 million, or $0.25 per diluted share after tax, including compensation expense related to deferred purchase price payments in connection with the acquisition of Schuh Group Limited in June 2011 and other legal matters, and an effective tax rate reflecting the non-deductibility of the compensation expense related to the deferred purchase price. As previously announced, because the obligation to pay the deferred purchase price for Schuh is contingent upon the continued employment of the payees, U.S. Generally Accepted Accounting Principles require that it be treated as compensation expense. For tax purposes, however, the obligation is treated as purchase price, and is therefore not deductible. Fiscal 2011 fourth quarter results were favorably affected by $0.08 per share due to a lower tax rate offset by pretax items totaling $2.8 million, or $0.07 per diluted share after tax, primarily related to network intrusion expenses, asset impairments and purchase price accounting adjustments.

Adjusted for the items described above in both periods, earnings from continuing operations were $47.5 million, or $1.97 per diluted share, for the fourth quarter of Fiscal 2012, compared to earnings from continuing operations of $31.3 million, or $1.33 per diluted share, for the fourth quarter of Fiscal 2011. For consistency with Fiscal 2012’s previously announced earnings expectations and with previously reported adjusted results for the prior year period, the Company believes that the disclosure of the results from continuing operations adjusted for these items will be useful to investors. Additionally, the Company believes that the presentation of earnings from continuing operations before the compensation expense associated with the Schuh deferred purchase price will enable investors to understand the effect attributable to incorporating a continuing employment condition into the obligation to pay deferred purchase price. A reconciliation of earnings and earnings per share from continuing operations in accordance with U.S. Generally Accepted Accounting Principles with the adjusted earnings and earnings per share numbers presented in this paragraph is set forth on Schedule B to this press release.


Net sales for the fourth quarter of Fiscal 2012 increased 29% to $723 million from $560 million in the fourth quarter of Fiscal 2011. Comparable store sales in the fourth quarter of Fiscal 2012 increased by 12%. The Lids Sports Group’s comparable store sales increased by 13%, the Journeys Group increased by 14%, Johnston & Murphy Retail increased by 8%, and Underground Station decreased by 4%.

Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, “We finished Fiscal 2012 with an excellent fourth quarter, led by strong performances from our two largest businesses, Journeys Group and Lids Sports Group. In addition, Schuh and Johnston & Murphy also contributed meaningfully to our results. Our merchandise strategies continued to drive strong full price selling in our stores and on our websites, helping push adjusted fourth quarter operating margin above 10% for the first time in five years.

“Fiscal 2013 has started well, with February consolidated comparable store sales up 13%. While we expect these trends to moderate, we continue to look for positive comparable store sales on top of the challenging quarterly comparisons ahead of us.”

Dennis also discussed the Company’s updated outlook. “Based on current visibility we expect adjusted Fiscal 2013 diluted earnings per share to be in the range of $4.58 to $4.70, which represents a 12% to 15% increase over last year’s adjusted earnings per share of $4.09. Consistent with previous guidance, these expectations do not include expected non-cash asset impairments and other charges, which are estimated in the range of $1.4 million to $2.5 million pretax, or $0.04 to $0.06 per share, after tax, in Fiscal 2013. They also do not reflect compensation expense associated with the Schuh deferred purchase price as described above, which are currently estimated at approximately $12.0 million, or $0.49 per diluted share, for the full year. This guidance assumes comparable sales of 2% to 3% for the full fiscal year.” A reconciliation of the adjusted financial measures cited in the guidance to their corresponding measures as reported pursuant to U.S. Generally Accepted Accounting Principles is included in Schedule B to this press release.

Fiscal Year 2012

The Company also reported earnings from continuing operations for the fiscal year ended January 28, 2012, of $83.0 million, or $3.48 per diluted share, compared to earnings from continuing operations of $54.5 million, or $2.29 per diluted share, for the fiscal year ended January 29, 2011. Fiscal 2012 earnings reflected after-tax charges of $0.61 per diluted share, including compensation expense associated with the Schuh deferred purchase price, acquisition expenses, asset impairments, other legal matters and network intrusion-related expenses. Fiscal 2011 earnings reflected after-tax charges of $0.19 per diluted share, including asset impairments, purchase price accounting adjustments, network intrusion-related expenses, flood loss and other legal matters, partially offset by a lower effective tax rate.

Adjusted for the listed items in both years, earnings from continuing operations were $97.5 million, or $4.09 per diluted share, for Fiscal 2012, compared to earnings from continuing operations of $59.0 million, or $2.48 per diluted share, for Fiscal 2011.


For consistency with previously announced earnings expectations, which did not reflect the listed items, the Company believes that disclosure of earnings from continuing operations adjusted for those items will be useful to investors. A reconciliation of the adjusted financial measures to their corresponding measures as reported pursuant to U.S. Generally Accepted Accounting Principles is included in Schedule B to this press release. Net sales for Fiscal 2012 increased 28% to $2.29 billion from $1.79 billion in Fiscal 2011.

Dennis concluded, “We are entering the new fiscal year from a position of strength. With a diversified portfolio of businesses that generate significant cash flow, we are well situated to take advantage of the profitable growth opportunities ahead of us. We believe our recent operating performance confirms we are on the right strategic course to achieve our goals of $3.1 billion in sales and operating margins of 9% by Fiscal 2016.”

Conference Call and Management Commentary

The Company has posted detailed financial commentary in writing on its website, www.genesco.com, in the investor relations section. The Company’s live conference call on March 2, 2012 at 7:30 a.m. (Central time), may be accessed through the Company’s internet website, www.genesco.com. To listen live, please go to the website at least 15 minutes early to register, download and install any necessary software.

Cautionary Note Concerning Forward-Looking Statements

This release contains forward-looking statements, including those regarding the performance outlook for the Company and its individual businesses (including, without limitation, sales, earnings and operating margins), and all other statements not addressing solely historical facts or present conditions. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to estimates reflected in forward-looking statements, including the amount of required accruals related to the earn-out bonus potentially payable to Schuh management in four years based on the achievement of certain performance objectives; the costs of responding to and liability in connection with the network intrusion announced in December 2010; the timing and amount of non-cash asset impairments; weakness in the consumer economy; competition in the Company’s markets; inability of customers to obtain credit; fashion trends that affect the sales or product margins of the Company’s retail product offerings; changes in buying patterns by significant wholesale customers; bankruptcies or deterioration in financial condition of significant wholesale customers; disruptions in product supply or distribution; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; the Company’s ability to continue to complete and integrate acquisitions, expand its business and diversify its product base; and changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons. Additional factors that could affect the Company’s prospects and cause differences from


expectations include the ability to build, open, staff and support additional retail stores and to renew leases in existing stores and maintain reductions in occupancy costs achieved in recent lease negotiations, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; deterioration in the performance of individual businesses or of the Company’s market value relative to its book value, resulting in impairments of fixed assets or intangible assets or other adverse financial consequences; unexpected changes to the market for the Company’s shares; variations from expected pension-related charges caused by conditions in the financial markets; and the outcome of litigation, investigations and environmental matters involving the Company. Additional factors are cited in the “Risk Factors,” “Legal Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of, and elsewhere in, our SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor relations department of Genesco via our website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this release are beyond Genesco’s ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements.

About Genesco Inc.

Genesco Inc., a Nashville-based specialty retailer, sells footwear, headwear, sports apparel and accessories in more than 2,380 retail stores throughout the U.S., Canada and the United Kingdom, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Schuh, Lids, Lids Locker Room, Johnston & Murphy, and Underground Station, and on internet websites www.journeys.com, www.journeyskidz.com, www.shibyjourneys.com, www.undergroundstation.com, www.schuh.co.uk, www.johnstonmurphy.com, www.dockersshoes.com, www.lids.com, www.lids.ca, www.lidslockerroom.com, www.keukafootwear.com and www.lidsteamsports.com. The Company’s Lids Sports Group division operates the Lids headwear stores and the lids.com website, the Lids Locker Room and other team sports fan shops and single team clubhouse stores, and the Lids Team Sports team dealer business. In addition, Genesco sells wholesale footwear under its Johnston & Murphy brand, the licensed Dockers brand, Keuka, and other brands. For more information on Genesco and its operating divisions, please visit www.genesco.com.


GENESCO INC.

Consolidated Earnings Summary

 

     Fourth Quarter     Fiscal Year Ended  

In Thousands

   January 28,
2012
    January 29,
2011
    January 28,
2012
    January 29,
2011
 

Net sales

   $ 723,369      $ 560,494      $ 2,291,987      $ 1,789,839   

Cost of sales

     366,298        287,503        1,137,938        887,992   

Selling and administrative expenses

     285,548        222,713        1,007,502        807,197   

Restructuring and other, net

     741        2,003        2,677        8,567   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from operations*

     70,782        48,275        143,870        86,083   

Interest expense, net

     1,628        354        5,092        1,122   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from continuing operations before income taxes

     69,154        47,921        138,778        84,961   

Income tax expense

     27,656        16,508        55,794        30,414   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from continuing operations

     41,498        31,413        82,984        54,547   

Provision for discontinued operations

     (28     (552     (1,025     (1,336
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Earnings

   $ 41,470      $ 30,861      $ 81,959      $ 53,211   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

* Includes $3.0 million and $13.9 million, respectively, of acquisition related expenses for the three months and fiscal year ended January 28, 2012.

Earnings Per Share Information

 

     Fourth Quarter      Fiscal Year Ended  

In Thousands (except per share amounts)

   January 28,
2012
     January 29,
2011
     January 28,
2012
     January 29,
2011
 

Preferred dividend requirements

   $ 46       $ 49       $ 193       $ 197   

Average common shares - Basic EPS

     23,462         22,825         23,234         23,209   

Basic earnings per share:

           

Before discontinued operations

   $ 1.77       $ 1.37       $ 3.56       $ 2.34   

Net earnings

   $ 1.77       $ 1.35       $ 3.52       $ 2.28   

Average common and common equivalent shares - Diluted EPS

     24,095         23,500         23,848         23,716   

Diluted earnings per share:

           

Before discontinued operations

   $ 1.72       $ 1.34       $ 3.48       $ 2.29   

Net earnings

   $ 1.72       $ 1.31       $ 3.43       $ 2.24   


GENESCO INC.

 

Consolidated Earnings Summary

 

     Fourth Quarter     Fiscal Year Ended  

In Thousands

   January 28,
2012
    January 29,
2011*
    January 28,
2012
    January 29,
2011*
 

Sales:

        

Journeys Group

   $ 290,308      $ 253,315      $ 927,743      $ 804,149   

Underground Station Group

     26,440        29,405        92,373        94,351   

Schuh Group

     100,077        —          212,262        —     

Lids Sports Group

     226,578        198,072        759,324        603,345   

Johnston & Murphy Group

     59,957        56,010        201,725        185,011   

Licensed Brands

     19,717        23,325        97,444        101,644   

Corporate and Other

     292        367        1,116        1,339   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Sales

   $ 723,369      $ 560,494      $ 2,291,987      $ 1,789,839   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income (Loss):

        

Journeys Group

   $ 39,071      $ 27,877      $ 82,785      $ 52,639   

Underground Station Group

     1,560        1,341        (333     (2,997

Schuh Group(1)

     7,371        —          11,711        —     

Lids Sports Group

     31,347        22,883        82,349        56,026   

Johnston & Murphy Group

     5,653        4,149        13,682        7,595   

Licensed Brands

     1,458        2,247        9,456        12,359   

Corporate and Other(2)

     (15,678     (10,222     (55,780     (39,539
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from operations

     70,782        48,275        143,870        86,083   

Interest, net

     1,628        354        5,092        1,122   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from continuing operations before income taxes

     69,154        47,921        138,778        84,961   

Income tax expense

     27,656        16,508        55,794        30,414   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from continuing operations

     41,498        31,413        82,984        54,547   

Provision for discontinued operations

     (28     (552     (1,025     (1,336
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Earnings

   $ 41,470      $ 30,861      $ 81,959      $ 53,211   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

* Certain expenses previously allocated to corporate in Fiscal 2011 have been reallocated to operating divisions to conform to current year presentation. Fiscal 2011 has been restated to reflect this new allocation.
(1) Includes $2.9 million and $7.2 million, respectively, in deferred payments related to the Schuh acquisition for the three months and fiscal year ended January 28, 2012.
(2) Includes a $0.8 million charge in the fourth quarter of Fiscal 2012 which includes $0.6 million in other legal matters and $0.2 million for network intrusion expenses and includes $2.7 million of other charges in Fiscal 2012 which includes $1.1 million for asset impairments, $0.7 million for network intrusion expenses and $0.9 million for other legal matters. The fourth quarter and year of Fiscal 2012 also included $0.1 million and $6.7 million, respectively, of acquisition related expenses. Includes a $2.0 million charge in the fourth quarter of Fiscal 2011, which includes $1.3 million for intrusion expenses, and $0.8 million in asset impairments offset slightly by $0.1 million in other legal matters. Includes $8.6 million of other charges in Fiscal 2011 which includes $7.2 million in asset impairments, $1.3 million for intrusion expenses and $0.1 million in other legal matters.


GENESCO INC.

 

Consolidated Balance Sheet

 

In Thousands

   January 28,
2012
     January 29,
2011
 

Assets

     

Cash and cash equivalents

   $ 53,790       $ 55,934   

Accounts receivable

     43,713         44,512   

Inventories

     435,113         359,736   

Other current assets

     75,001         52,873   
  

 

 

    

 

 

 

Total current assets

     607,617         513,055   
  

 

 

    

 

 

 

Property and equipment

     227,717         198,691   

Other non-current assets

     403,976         249,336   
  

 

 

    

 

 

 

Total Assets

   $ 1,239,310       $ 961,082   
  

 

 

    

 

 

 

Liabilities and Equity

     

Accounts payable

   $ 138,938       $ 117,001   

Current portion long-term debt

     8,773         —     

Other current liabilities

     180,679         117,362   
  

 

 

    

 

 

 

Total current liabilities

     328,390         234,363   
  

 

 

    

 

 

 

Long-term debt

     31,931         —     

Other long-term liabilities

     161,379         99,898   

Equity

     717,610         626,821   
  

 

 

    

 

 

 

Total Liabilities and Equity

   $ 1,239,310       $ 961,082   
  

 

 

    

 

 

 


GENESCO INC.

Retail Units Operated - Twelve Months Ended January 28, 2012

 

      Balance
01/31/10
     Open      Acquisitions      Close      Balance
01/29/11
     Open      Acquisitions      Close      Balance
01/28/12
 

Journeys Group

     1,025         9         0         17         1,017         18         0         18         1,017   

Journeys

     819         6         0         12         813         14         0         15         812   

Journeys Kidz

     150         3         0         4         149         4         0         1         152   

Shi by Journeys

     56         0         0         1         55         0         0         2         53   

Underground Station Group

     170         0         0         19         151         0         0         14         137   

Schuh Group

     0         0         0         0         0         6         75         3         78   

Schuh UK

     0         0         0         0         0         6         51         1         56   

Schuh ROI

     0         0         0         0         0         0         8         0         8   

Schuh Concessions

     0         0         0         0         0         0         16         2         14   

Lids Sports Group

     921         41         58         35         985         40         10         33         1,002   

Johnston & Murphy Group

     160         3         0         7         156         6         0         9         153   

Shops

     116         2         0         7         111         1         0         9         103   

Factory Outlets

     44         1         0         0         45         5         0         0         50   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Retail Units

     2,276         53         58         78         2,309         70         85         77         2,387   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Retail Units Operated - Three Months Ended January 28, 2012

 

      Balance
10/29/11
     Open      Acquisitions      Close      Balance
01/28/12
 

Journeys Group

     1,017         4         0         4         1,017   

Journeys

     811         4         0         3         812   

Journeys Kidz

     153         0         0         1         152   

Shi by Journeys

     53         0         0         0         53   

Underground Station Group

     139         0         0         2         137   

Schuh Group

     75         4         0         1         78   

Schuh UK

     52         4         0         0         56   

Schuh ROI

     8         0         0         0         8   

Schuh Concessions

     15         0         0         1         14   

Lids Sports Group

     1,000         9         0         7         1,002   

Johnston & Murphy Group

     156         1         0         4         153   

Shops

     106         1         0         4         103   

Factory Outlets

     50         0         0         0         50   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Retail Units

     2,387         18         0         18         2,387   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Comparable Store Sales

 

     Three Months Ended     Twelve Months Ended  
     January 28,
2012
    January 29,
2011
    January 28,
2012
    January 29,
2011
 

Journeys Group

     14     12     15     7

Underground Station Group

     -4     -4     6     -1

Lids Sports Group

     13     6     12     9

Johnston & Murphy Group

     8     12     10     8
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Comparable Store Sales

     12     9     13     7
  

 

 

   

 

 

   

 

 

   

 

 

 


Schedule B

Genesco Inc.

Adjustments to Reported Earnings from Continuing Operations

Three Months Ended January 28, 2012 and January 29, 2011

 

In Thousands (except per share amounts)    3 mos
Jan 2012
     Impact
on EPS
     3 mos
Jan 2011
    Impact
on EPS
 

Earnings from continuing operations, as reported

   $ 41,498       $ 1.72       $ 31,413      $ 1.34   

Adjustments: (1)

          

Impairment charges

     32         —           487        0.02   

Acquisition expenses

     142         0.01         —          —     

Deferred payment - Schuh acquisition

     2,917         0.12         —          —     

Other legal matters

     387         0.02         (39     —     

Purchase price accounting adjustment - margin

     —           —           476        0.02   

Purchase price accounting adjustment - expense

     —           —           —          —     

Network intrusion expenses

     86         —           816        0.03   

Higher (lower) effective tax rate

     2,391         0.10         (1,863     (0.08
  

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted earnings from continuing operations (2)

   $ 47,453       $ 1.97       $ 31,290      $ 1.33   
  

 

 

    

 

 

    

 

 

   

 

 

 

 

(1) All adjustments are net of tax where applicable. The tax rate for the fourth quarter of Fiscal 2012 is 34.8% excluding a FIN 48 discrete item of $0.1 million. The tax rate for the fourth quarter of Fiscal 2011 is 38.0% excluding a FIN 48 discrete item of $0.1 million.
(2) Reflects 24.1 million share count for Fiscal 2012 and 23.5 million share count for Fiscal 2011 which includes common stock equivalents in both years.

The Company believes that disclosure of earnings and earnings per share from continuing operations on a pro forma basis adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.


Schedule B

 

Genesco Inc.

Adjustments to Reported Earnings from Continuing Operations

Twelve Months Ended January 28, 2012 and January 29, 2011

 

In Thousands (except per share amounts)    12 mos
Jan 2012
    Impact
on EPS
     12 mos
Jan 2011
    Impact
on EPS
 

Earnings from continuing operations, as reported

   $ 82,984      $ 3.48       $ 54,547      $ 2.29   

Adjustments: (1)

         

Impairment charges

     706        0.03         4,410        0.19   

Acquisition expenses

     5,770        0.24         —          —     

Deferred payment - Schuh acquisition

     7,218        0.30         —          —     

Other legal matters

     567        0.02         56        —     

Flood loss

     —          —           215        0.01   

Purchase price accounting adjustment - margin

     —          —           1,242        0.05   

Purchase price accounting adjustment - expense

     —          —           266        0.01   

Expenses related to aborted acquisition

     —          —           127        0.01   

Network intrusion expenses

     415        0.02         816        0.03   

Lower effective tax rate

     (160     —           (2,639     (0.11
  

 

 

   

 

 

    

 

 

   

 

 

 

Adjusted earnings from continuing operations (2)

   $ 97,500      $ 4.09       $ 59,040      $ 2.48   
  

 

 

   

 

 

    

 

 

   

 

 

 

 

(1) All adjustments are net of tax where applicable. The tax rate for Fiscal 2012 is 36.95% excluding a FIN 48 discrete item of $0.4 million. The tax rate for Fiscal 2011 is 38.4% excluding a FIN 48 discrete item of $0.5 million.
(2) Reflects 23.8 million share count for Fiscal 2012 and 23.7 million share count for Fiscal 2011 which includes common stock equivalents in both years.

The Company believes that disclosure of earnings and earnings per share from continuing operations on a pro forma basis adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.


Schedule B

 

Genesco Inc.

Adjustments to Forecasted Earnings from Continuing Operations

Fiscal Year Ending February 2, 2013

 

In Thousands (except per share amounts)    High Guidance
Fiscal 2013
     Low Guidance
Fiscal 2013
 

Forecasted earnings from continuing operations

   $ 100,337       $ 4.15       $ 97,303       $ 4.03   

Adjustments: (1)

           

Impairment

     1,466         0.06         1,466         0.06   

Deferred payment - Schuh acquisition

     11,778         0.49         11,778         0.49   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted forecasted earnings from continuing operations (2)

   $ 113,581       $ 4.70       $ 110,547       $ 4.58   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) All adjustments are net of tax where applicable. The forecasted tax rate for Fiscal 2013 is 37% excluding a FIN 48 discrete item of $0.5 million.
(2) Reflects 24.3 million share count for Fiscal 2013 which includes common stock equivalents.

This reconciliation reflects estimates and current expectations of future results. Actual results may vary materially from these expectations and estimates, for reasons including those included in the discussion of forward-looking statements elsewhere in this release. The Company disclaims any obligation to update such expectations and estimates.