The Yankee Candle Company, Inc. Reports Record Fiscal 2005 First Quart

    Business Editors/Consumer Products Writers/Retail Writers

    SOUTH DEERFIELD, Mass.--(BUSINESS WIRE)--April 27, 2005--The Yankee Candle Company, Inc. ("Yankee" or the "Company") (NYSE:YCC), the leading designer, manufacturer, wholesaler and retailer of premium scented candles, today announced that financial results for the first quarter ended April 2, 2005 set a new first quarter record. Total sales for the first quarter were $119.3 million, a 12% increase over the year ago quarter. Total Company comparable sales for the first quarter were an increase of 4%. Wholesale sales were $67.4 million, an 11% increase over the year ago quarter; and wholesale comparable sales increased 5%. Retail sales were $51.8 million, a 13% increase over the fiscal 2004 first quarter. Comparable sales in the 295 retail stores that have been open more than one year and mailorder hub increased 2% and retail comparable store sales increased 1% in the first quarter.
    Yankee opened 13 new Yankee Candle retail stores during the first quarter and ended the quarter with 355 stores in 42 states. The Company also operated two Old Farmer's Almanac test concept stores at the end of the first quarter.
    Operating profit for the fiscal 2005 first quarter increased 4% to $18.8 million, from $18.1 million for the prior year quarter.
    Net income for the fiscal 2005 first quarter increased 3% to $10.8 million, or $0.23 per common share on a diluted basis, from $10.5 million, or $0.21 per common share on a diluted basis for the prior year quarter.
    "Yankee recorded another quarter of strong and record results. Both our retail and wholesale segments exceeded our sales targets while EPS was within the guidance we had provided during our last conference call on February 16, 2005," said Craig W. Rydin, Yankee's Chairman and Chief Executive Officer. "We are particularly pleased with the performance of our wholesale segment, which posted 11% sales growth on top of 14% sales growth in the first quarter of 2004. This was achieved in an increasingly challenging independent gift channel market, and a continued broad-based cautious open-to-buy environment in our national accounts."
    The Company also provided information on several balance sheet items. Inventory declined 5% from the prior year quarter-end. The $27.7 million decline in Stockholders' Equity since year end 2004 was due to stock repurchase activity, offset in part by first quarter net income. The $21.1 million decline in accrued income taxes since year end 2004 was due primarily to the payment of approximately $25.8 million of federal and state income taxes in March, offset in part by the income tax provision in the first quarter.
    During the fiscal 2005 first quarter the Company purchased a total of 1,286,475 shares of its Common Stock for an aggregate purchase price of $39.9 million, pursuant to its stock repurchase program announced on December 7, 2004.
    The Company also updated its sales and EPS guidance for fiscal 2005. For the full year the Company expects approximately 10%-11% total sales growth, including 9%-10% in the second quarter. For the full year the Company expects 13%-14% growth in diluted earnings per share, including 6%-12% in the second quarter. The EPS guidance does not include the benefit from any additional stock that may be repurchased in 2005.
    The Company will host a conference call to be broadcast via the Internet at 11:00 a.m. (EST) this morning to more fully discuss fiscal 2005 first quarter. This call is being webcast by CCBN and can be accessed at The Yankee Candle Company's web site at www.yankeecandle.com. Click on the "About Us" link, then select the "Investor Information" link. Enter your registration information, 10 minutes prior to the start of the conference.

    The Yankee Candle Company, Inc. is the leading designer, manufacturer, wholesaler and retailer of premium scented candles in the giftware industry. Yankee has a 35 year history of offering distinctive products and marketing them as affordable luxuries and consumable gifts. The Company sells its products through a North American wholesale customer network of approximately 16,100 store locations, a growing base of Company owned and operated retail stores (357 located in 42 states as of April 2, 2005), direct mail catalogs, its Internet website (www.yankeecandle.com), international distributors and to a European wholesale customer network of approximately 2,300 store locations (through its distribution center located in Bristol, England).

    This press release contains certain information constituting "forward-looking statements" for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to the statements contained herein with respect to management's current estimates of the Company's financial and operating results for Fiscal 2005, and the second quarter thereof, and any other statements concerning the Company's or management's plans, objectives, goals, strategies, expectations, estimates, beliefs or projections, or any other statements concerning future performance or events. Actual results could differ materially from those indicated by these forward-looking statements as a result of various risks and uncertainties, including but not limited to the following: the current economic conditions in the United States as a whole and the continuing weakness in the retail environment; the risk that we will be unable to maintain our historical growth rate; the effects of competition from others in the highly competitive giftware industry; our ability to anticipate and react to industry trends and changes in consumer demand; our dependence upon our senior executive officers; the risk of loss of our manufacturing and distribution facilities; the impact on our stock price of seasonal, quarterly and other fluctuations in our business; and other factors described or contained in the Company's most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K on file with the Securities and Exchange Commission. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update certain forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if experience or future events may cause the views contained in any forward-looking statements to change.

The Yankee Candle Company, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except per share data) (Unaudited)

Thirteen Weeks Thirteen Weeks Ended Ended April 2, 2005 April 3, 2004 ----------------- ----------------- Sales: Retail $ 51,819 43.45% $ 45,904 43.09% Wholesale 67,436 56.55% 60,615 56.91% ----------------- ----------------- Total sales 119,255 100.00% 106,519 100.00%

Cost of sales 54,424 45.64% 47,372 44.47% ----------------- ----------------- Gross profit 64,831 54.36% 59,147 55.53%

Selling expenses: Retail 28,340 54.69%(A) 24,571 53.53%(A) Wholesale 4,153 6.16%(B) 3,281 5.41%(B) ----------------- -----------------

Total selling expenses 32,493 27.25% 27,852 26.15%

General & administrative expenses 13,532 11.35% 13,240 12.43% ----------------- -----------------

Income from operations 18,806 15.77% 18,055 16.95% Interest income (6) -0.01% (5) 0.00% Interest expense 936 0.78% 809 0.76% Other income 218 0.18% (92) -0.09% ----------------- -----------------

Income before provision for income taxes 17,658 14.81% 17,343 16.28% Provision for income taxes 6,887 5.78% 6,850 6.43% ----------------- ----------------- Net income $ 10,771 9.03% $ 10,493 9.85% ================= =================

Basic earnings per share $ 0.23 $ 0.21 ======== ========

Diluted earnings per share $ 0.23 $ 0.21 ======== ========

Weighted average basic shares outstanding 46,877 50,281 Weighted average diluted shares outstanding 47,312 50,692

(A) Retail selling expenses as a percentage of retail sales. (B) Wholesale selling expenses as a percentage of wholesale sales.

The Yankee Candle Company, Inc. And Subsidiaries Condensed Consolidated Balance Sheets (in thousands)

ASSETS April 2, January 1, 2005 2005 ---------- ---------- (unaudited)

Current Assets: Cash and cash equivalents $ 18,135 $ 36,424 Accounts receivable, net 33,919 28,231 Inventory 47,905 46,901 Prepaid expenses and other current assets 8,606 8,112 Deferred tax assets 4,129 3,876 ---------- ---------- Total Current Assets 112,694 123,544 Property, Plant And Equipment, net 124,976 126,365 Marketable Securities 1,807 1,499 Deferred Financing Costs 374 451 Deferred Tax Assets 82,439 84,697 Other Assets 10,160 9,803 ---------- ---------- Total Assets $ 332,450 $ 346,359 ========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities: Accounts payable $ 20,793 $ 20,246 Accrued payroll 10,185 14,492 Accrued income taxes 5,164 26,264 Other accrued liabilities 11,752 18,435 ---------- ---------- Total Current Liabilities 47,894 79,437 Deferred Compensation Obligation 1,848 1,659 Long-Term Debt 120,000 75,000 Deferred Rent 10,791 10,600 Stockholders' Equity 151,917 179,663 ---------- ---------- Total Liabilities And Stockholders' Equity $ 332,450 $ 346,359 ========== ==========

The Yankee Candle Company, Inc. April 27, 2005 Earnings Release Supplemental Data

Quarter Year to Total Date ------- ------- ------- Retail Stores 13 13 357 Wholesale Customer Locations - North America (4) 450 450 16,050 Wholesale Customer Locations - Europe 100 100 2,300 Square Footage - Gross 18,096 18,096 671,893 Square Footage - Selling 14,508 14,508 532,882 Total Company Comp Sales Increase % 4% 4% Wholesale Comp Sales Increase % 5% 5% Retail Comp Store Sales Increase % 1% 1% Retail Comp Store Count 295 295 295 Retail Comp Store Sales Incr. %, excl. S.Deerfield 1% 1% Retail Comp Store & Hub Sales Increase % 2% 2% Sales per Square Foot (1) $595 Store Count 297 Average store square footage, gross (2) 1,648 Average store square footage, selling (2) 1,270 Gross Profit (A) Retail $ $31,441 $31,441 Retail % 60.7% 60.7% Wholesale $ $33,390 $33,390 Wholesale % 49.5% 49.5% Segment Profit (A) Retail $ $3,102 $3,102 Retail % 6.0% 6.0% Wholesale $ $29,236 $29,236 Wholesale % 43.4% 43.4% Depreciation & Amortization (A) $5,908 $5,908 Inventory per Store $37,000 Inventory Turns 4.6 4.5 (3) Capital Expenditures (A) 3,956 3,956

(A) Dollars in thousands

(1) Trailing 12 months, stores open for full 12 months, excluding S. Deerfield Flagship Store.

(2) Excludes S. Deerfield Flagship Store. Includes two Old Farmer's Almanac test stores.

(3) Rolling four quarters.

(4) Rounded.

--30--SP/bo*

CONTACT: The Yankee Candle Company, Inc. Bruce H. Besanko, 413-665-8306

KEYWORD: MASSACHUSETTS INDUSTRY KEYWORD: CONSUMER/HOUSEHOLD RETAIL EARNINGS CONFERENCE CALLS SOURCE: The Yankee Candle Company, Inc.

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