New York & Company, Inc. Announces Fourth Quarter and Fiscal Year 2007 Results and Provides Outlook for Fiscal Year 2008

New York & Company, Inc. [NYSE: NWY], a specialty apparel chain with 578 retail stores, today announced results for the fourth quarter and the full fiscal year ended February 2, 2008. The Company’s fiscal year ended February 2, 2008 includes 52 weeks, versus 53 weeks in last year’s fiscal year ended February 3, 2007, with the additional week occurring in the final month of the prior fiscal year. Therefore, the fourth quarter of fiscal year 2006 represents a fourteen-week period and compares to a thirteen-week period in the fourth quarter of fiscal year 2007. Unless otherwise noted, the results of operations discussed below are for the Company’s continuing operations only, the New York & Company brand. For the fourth quarter of fiscal year 2007, net sales were $359.4 million, as compared to $377.3 million for the fourth quarter of fiscal year 2006. Excluding sales from the extra week in fiscal year 2006, total net sales decreased 0.8% and comparable store sales decreased 3.5% for the thirteen-week period ended February 2, 2008. Net income from continuing operations for the fourth quarter of fiscal year 2007 was $11.2 million, or $0.18 per diluted share, as compared to prior year net income from continuing operations of $0.41 per diluted share. For fiscal year 2007, net sales were $1,194.9 million, as compared to net sales of $1,153.3 million for fiscal year 2006. Excluding sales from the extra week in fiscal year 2006, total net sales increased 5.0% and comparable store sales decreased 1.3% for the fifty-two-week period ended February 2, 2008. Net income from continuing operations for fiscal year 2007 was $26.7 million, or $0.44 per diluted share, as compared to prior year net income from continuing operations of $0.81 per diluted share. Richard P. Crystal, New York & Company’s Chairman and CEO, stated: "While we experienced lower sales and earnings in the fourth quarter compared to the prior year, primarily as a result of increased promotional activity due to the challenging retail environment, we did make progress on a number of initiatives. We continued to see strength in our wear-to-work categories. We began to see improved product offerings in our accessory assortment, and our e-commerce business continued to grow and exceed plans. Finally, we were very disciplined in managing our inventory and expenses. As we move into 2008, we believe continuing these strategies will lead to improved profitability and increased shareholder value.” Significant highlights with respect to fiscal 2007 include the following: The successful development of our fashion offerings in the Wear-to-Work and Dress businesses resulted in positive comparable sales for the year. The Company successfully launched its E-commerce store realizing net sales in excess of $22 million during the first full year of operation. The Company controlled expenses through targeted cost saving initiatives instituted early in the third quarter which minimized the impact of reduced leverage from decreases in comparable store sales. In 2008, the Company expects to realize $8 million of savings from the continuation of these initiatives. Disciplined inventory management in the fourth quarter enabled the Company to reduce inventory by 6.0% on an average store basis as the Company enters fiscal year 2008. The Company opened 54 new stores, remodeled 25 stores and closed 12 stores during the fiscal year, ending the year with 578 stores and 3.3 million selling square feet in operation. The Company strengthened its year-end balance sheet, ending the fiscal year with $73.7 million in cash and reduced debt as compared to a year ago. As of February 2, 2008, all JasmineSola stores were closed and the related exit procedures were substantially complete; therefore, JasmineSola’s results of operations are presented as discontinued operations in the Company’s current and historical financial statements. For the fourth quarter of fiscal year 2007, JasmineSola’s net loss was $4.3 million, or $0.07 per diluted share, as compared to previously reported guidance of a net loss of $0.11 to $0.14 per diluted share. Outlook Based upon the Company’s strategy to improve margin through disciplined inventory control and targeted, well planned promotion, the Company expects first quarter fiscal year 2008 comparable store sales to decline in the mid to high negative single-digit range. The current outlook for earnings per diluted share in the first quarter of fiscal year 2008 is in the range of $0.04 to $0.08. During the first quarter of 2008, the Company plans to open 13 stores and close two stores, ending the quarter with approximately 589 stores. In fiscal 2008, the Company is planning for comparable store sales to be in the low to mid negative single-digit range and earnings per diluted share to range from $0.42 to $0.52. The Company currently plans to open 25 to 30 stores, close approximately 12 stores and remodel approximately 12 stores, ending the fiscal year with 591 to 596 stores and approximately 3.3 million selling square feet in operation, with new stores representing 112,000 selling square feet. Capital expenditures are estimated in the range of $48.0 million to $52.0 million in fiscal year 2008 versus $75.5 million in fiscal year 2007. Depreciation expense for the year is estimated at $46.0 million. Conference Call Information A conference call to discuss the fourth quarter of fiscal year 2007 results is scheduled for today Thursday, March 20, 2008 at 9:00 am Eastern Daylight Time. Investors and analysts interested in participating in the call are invited to dial (800) 922-9655, referencing conference ID number 39035631, approximately ten minutes prior to the start of the call. The conference call will also be web-cast live at www.nyandcompany.com. A replay of this call will be available until midnight on March 27, 2008 and can be accessed by dialing (800) 642-1687 and entering pin number 39035631. Forward Looking Statements: This press release contains certain forward looking statements. Some of these statements can be identified by terms and phrases such as "anticipate,” "believe,” "intend,” "estimate,” "expect,” "explore”, "continue,” "could,” "may,” "plan,” "project,” "predict”, and similar expressions and include references to assumptions that we believe are reasonable and relate to our future prospects, developments and business strategies. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These include, but are not limited to: (i) our ability to open and operate stores successfully and the possible lack of availability of suitable locations on acceptable terms; (ii) seasonal fluctuations in our business; (iii) our ability to anticipate and respond to fashion trends, develop new merchandise and launch new product lines successfully; (iv) general economic conditions, consumer confidence and spending patterns; (v) our dependence on mall traffic for our sales; (vi) the susceptibility of our business to extreme and/or unseasonable weather conditions; (vii) our ability to retain, recruit and train key personnel; (viii) our reliance on third parties to manage some aspects of our business; (ix) changes in the cost of raw materials, distribution services or labor, including federal and state minimum wage rates; (x) our reliance on foreign sources of production, including the disruption of imports by labor disputes, political instability, legal and regulatory matters, duties, taxes, other charges and quotas on imports, local business practices, potential delays in shipping and related pricing impacts and political issues and fluctuation in currency and exchange rates; (xi) the potential impact of natural disasters and health concerns relating to outbreaks of widespread diseases, particularly on manufacturing operations of our vendors; (xii) the ability of our manufacturers to manufacture and deliver products in a timely manner while meeting our quality standards; (xiii) our ability to service any debt we incur from time to time as well as our ability to maintain the requirements that the agreements related to such debt impose upon us; (xiv) the potential impact of national and international security concerns on the retail environment, including any possible military action, terrorist attacks or other hostilities; (xv) our reliance on manufacturers to maintain ethical business practices; (xvi) our ability to protect our trademarks and other intellectual property rights; (xvii) our ability to maintain and our reliance on our information systems infrastructure; (xviii) our dependence on the success of our brand; (xix) competition in our market, including promotional and pricing competition; (xx) our reliance on the effective use of customer information; (xxi) the effects of government regulation; (xxii) the control of our company by our sponsors; and (xxiii) other risks and uncertainties as described in our documents filed with the SEC, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to revise the forward looking statements included in this press release to reflect any future events or circumstances. About New York & Company, Inc. New York & Company, Inc., founded in 1918, is a leading specialty retailer of fashion-oriented, moderately-priced women’s apparel. The Company’s proprietary branded New York & Company ™ merchandise is sold exclusively through its national network of New York & Company retail stores and E-commerce store at www.nyandcompany.com. The Company currently operates 578 stores in 44 states. Additionally, certain product, press release and SEC filing information concerning the Company are available at the Company’s website: www.nyandcompany.com. Exhibit (1)   New York & Company, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited)   (Amounts in thousands, except per share amounts)   13-weeksended February 2,2008   %ofnetsales   14-weeksendedFebruary 3,2007   %ofnetsales Net sales $ 359,413 100.0 % $ 377,318 100.0 % Cost of goods sold, buying and occupancy costs 256,458 71.4 % 249,753 66.2 % Gross profit 102,955 28.6 % 127,565 33.8 % Selling, general and administrative expenses 83,991 23.3 % 86,321 22.9 % Operating income 18,964 5.3 % 41,244 10.9 % Interest expense, net of interest income 283 0.1 % 226 0.1 %   Income from continuing operations before income taxes 18,681 5.2 % 41,018 10.8 % Provision for income taxes 7,509 2.1 % 16,042 4.2 % Income from continuing operations 11,172 3.1 % 24,976 6.6 %   Loss from discontinued operations, net of taxes (4,300 ) (1.2 )% (955 ) (0.2 )% Net income $ 6,872 1.9 % $ 24,021 6.4 %   Basic earnings per share from continuing operations $ 0.19 $ 0.44 Basic loss per share from discontinued operations   (0.07 )   (0.02 ) Basic earnings per share $ 0.12 $ 0.42   Diluted earnings per share from continuing operations $ 0.18 $ 0.41 Diluted loss per share from discontinued operations   (0.07 )   (0.01 ) Diluted earnings per share $ 0.11 $ 0.40 Weighted average shares outstanding: Basic shares of common stock 59,237 57,023 Diluted shares of common stock 61,214 60,566 Selected operating data for continuing operations: (Dollars in thousands, except square foot data) Comparable store sales (decrease) increase (3.5 )% 1.1 % Net sales per average selling square foot (a) $ 108 $ 116 Net sales per average store (b) $ 627 $ 703 Average selling square footage per store (c) 5,757 6,038                           (a)   Net sales per average selling square foot is defined as net sales divided by the average of beginning and end of period selling square feet. (b) Net sales per average store is defined as net sales divided by the average of beginning and end of period number of stores. (c) Average selling square footage per store is defined as end of period selling square feet divided by end of period number of stores. Exhibit (2) New York & Company, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited)   (Amounts in thousands, except per share amounts)   52-weeksended February 2,2008   %ofnetsales   53-weeksendedFebruary 3,2007   %ofnetsales Net sales $ 1,194,944 100.0 % $ 1,153,333 100.0 % Cost of goods sold, buying and occupancy costs 851,739 71.3 % 786,757 68.2 % Gross profit 343,205 28.7 % 366,576 31.8 % Selling, general and administrative expenses 298,325 24.9 % 284,664 24.7 % Operating income 44,880 3.8 % 81,912 7.1 % Interest expense, net of interest income 1,200 0.1 % 1,663 0.1 %   Income from continuing operations before income taxes 43,680 3.7 % 80,249 7.0 % Provision for income taxes 17,004 1.5 % 31,853 2.8 % Income from continuing operations 26,676 2.2 % 48,396 4.2 %   Loss from discontinued operations, net of taxes (31,533 ) (2.6 )% (2,226 ) (0.2 )% Net (loss) income $ (4,857 ) (0.4 )% $ 46,170 4.0 %   Basic earnings per share from continuing operations $ 0.46 $ 0.86 Basic loss per share from discontinued operations   (0.54 )   (0.04 ) Basic (loss) earnings per share $ (0.08 ) $ 0.82   Diluted earnings per share from continuing operations $ 0.44 $ 0.81 Diluted loss per share from discontinued operations   (0.52 )   (0.04 ) Diluted (loss) earnings per share $ (0.08 ) $ 0.77 Weighted average shares outstanding: Basic shares of common stock 58,537 56,072 Diluted shares of common stock 61,028 60,031 Selected operating data for continuing operations: (Dollars in thousands, except square foot data) Comparable store sales decrease (1.3 )% (2.7 )% Net sales per average selling square foot (a) $ 364 $ 358 Net sales per average store (b) $ 2,145 $ 2,218 Average selling square footage per store (c) 5,757 6,038                           (a)   Net sales per average selling square foot is defined as net sales divided by the average of beginning and end of period selling square feet. (b) Net sales per average store is defined as net sales divided by the average of beginning and end of period number of stores. (c) Average selling square footage per store is defined as end of period selling square feet divided by end of period number of stores. Exhibit (3) New York & Company, Inc. and Subsidiaries Condensed Consolidated Balance Sheets   (Amounts in thousands)   February 2,2008   February 3,2007 (Unaudited) (Audited) Assets Current assets: Cash and cash equivalents $ 73,734 $ 67,858 Accounts receivable 18,523 13,786 Income taxes receivable 11,730 — Inventories, net 103,923 102,256 Prepaid expenses 21,991 19,583 Other current assets 1,913 2,049 Current assets of discontinued operations 716 9,330 Total current assets 232,530 214,862 Property and equipment, net 239,557 202,364 Intangible assets 14,843 14,843 Other assets 1,500 1,554 Non-current assets of discontinued operations 26 36,176 Total assets $ 488,456 $ 469,799 Liabilities and stockholders’ equity Current liabilities: Current portion – long-term debt $ 6,000 $ 6,000 Accounts payable 77,177 62,954 Accrued expenses 53,618 59,202 Other current liabilities 3,928 10,366 Current liabilities of discontinued operations 7,328 6,376 Total current liabilities 148,051 144,898 Long-term debt, net of current portion 19,500 25,500 Deferred rent and other liabilities 80,944 56,629 Non-current liabilities of discontinued operations — 1,973 Total liabilities 248,495 229,000 Total stockholders’ equity 239,961 240,799 Total liabilities and stockholders’ equity $ 488,456 $ 469,799 Exhibit (4) New York & Company, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows     (Amounts in thousands)   52-weeksendedFebruary 2,2008   53-weeksendedFebruary 3,2007 (Unaudited) (Audited) Operating activities Net (loss) income $ (4,857 ) $ 46,170 Less: Loss from discontinued operations, net of taxes (31,533 ) (2,226 ) Income from continuing operations 26,676 48,396 Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: Depreciation and amortization 38,500 31,607 Amortization of deferred financing costs 234 277 Share-based compensation expense 1,660 1,665 Deferred income taxes 1,262 (1,326 ) Changes in operating assets and liabilities: Accounts receivable (4,737 ) (1,117 ) Income taxes receivable (11,730 ) — Inventories, net (1,667 ) 3,477 Prepaid expenses (2,408 ) (1,129 ) Accounts payable 14,223 (26,607 ) Accrued expenses (5,575 ) 4,109 Income taxes payable (6,391 ) 6,391 Deferred rent 18,704 19,217 Other assets and liabilities   2,177   (481 ) Net cash provided by operating activities of continuing operations   70,928   84,479   Investing activities Capital expenditures   (75,464 )   (77,536 ) Net cash used in investing activities of continuing operations   (75,464 )   (77,536 )   Financing activities Net proceeds from public offering — 2,295 Payment of offering costs related to public offering — (439 ) Repayment of debt (6,000 ) (6,000 ) Payment of financing costs (369 ) — Excess tax benefit from exercise of stock options 4,481 12,531 Proceeds from exercise of stock options 265 1,209 Other   (175 )   — Net cash (used in) provided by financing activities of continuing operations   (1,798 )   9,596   Cash flows from discontinued operations Operating cash flows 12,628 (496 ) Investing cash flows (401 ) (5,415 ) Financing cash flows — — Net cash provided by (used in) discontinued operations 12,227 (5,911 )   Net increase in cash and cash equivalents 5,893 10,628   Cash and cash equivalents at beginning of period(including cash at discontinued operations of $206 and $1,593, respectively)   68,064   57,436 Cash and cash equivalents at end of period (includingcash at discontinued operations of $223 and $206, respectively) $ 73,957 $ 68,064 Exhibit (5) New York & Company, Inc. and Subsidiaries Store Count and Selling Square Footage (Unaudited)   Fiscal Year 2007   Total stores openat beginning ofthe quarter   Number of storesopened duringthe quarter   Number of storesremodeled duringthe quarter   Number of storesclosed duringthe quarter   Total storesopen at end ofthe quarter 1st Quarter (Actual) 536 11 — (2 ) 545 2nd Quarter (Actual) 545 14 13 (2 ) 557 3rd Quarter (Actual) 557 12 10 (1 ) 568 4th Quarter (Actual) 568 17 2 (7 ) 578   Fiscal Year 2007 Total selling squarefeet at beginning ofthe quarter Selling square feetfor stores openedduring the quarter Reduction ofselling square feetfor stores remodeledduring the quarter Reduction ofselling square feetfor stores closedduring the quarter Total selling squarefeet at end ofthe quarter 1st Quarter (Actual) 3,236,540 52,297 — (13,263 ) 3,275,574 2nd Quarter (Actual) 3,275,574 58,167 (29,640 ) (14,760 ) 3,289,341 3rd Quarter (Actual) 3,289,341 52,063 (14,752 ) (8,800 ) 3,317,852 4th Quarter (Actual) 3,317,852 66,200 (5,383 ) (51,219 ) 3,327,450