Sharper Image Fails to Comply With Nasdaq Rules

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Sharper Image said it would inform Nasdaq on Sept. 18 that because of a delay in the filing of its quarterly results it is not in compliance with the stock exchange's rules for continued listing.

The gadget merchant said it would be unable to file its quarterly report for the period ended July 31 with the Securities and Exchange Commission pending completion of a previously announced special committee review of stock option practices.

Based on results of the special committee's review to date, San Francisco-based Sharper Image has concluded that it will restate its previously reported financial statements for its three fiscal years ended Jan. 31, 2006, and the fiscal quarters ended April 30, 2006 and 2005.

The company also reported preliminary sales results for the second fiscal quarter and six months ended July 31.

For the quarter ended July 31, revenues decreased 22 percent to $107.2 million. The company expects to report a $21.3 million loss for the second quarter, compared to an $11.3 million loss last year. Total store sales for the second quarter decreased 26 percent and comparable store sales decreased 28 percent. Catalog/direct marketing sales decreased 11 percent to $24.4 million. Internet sales decreased 18 percent to $15.1 million. Wholesale sales decreased 38 percent to $6.1 million.

For the six-month period ended July 31, Sharper Image's revenues decreased 24 percent fto $214 million. The company expects to report a loss of $42.3 million for the six-month period compared to a loss of $18.9 million last year. Store sales decreased 27 percent while comparable store sales decreased 28 percent. Catalog/direct marketing sales decreased 19 percent for a total of $54.5 million. Internet sales decreased 22 percent for a total of $32.3 million. Wholesale sales decreased 42 percent to $12.7 million.

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