Neiman Marcus, Inc. Reports Third Quarter Results

DALLAS--(Business Wire)--
Neiman Marcus, Inc. today reported financial results for the third quarter of
fiscal year 2009. For the 13 weeks ended May 2, 2009, the Company reported total
revenues of $810.1 million compared to $1.06 billion in the prior year.
Comparable revenues decreased 25.1 percent. Operating earnings for the third
quarter of fiscal year 2009 were $50.3 million compared to $148.6 million for
the third quarter of fiscal year 2008.

The Company reported a net loss of $3.1 million for the 13 weeks ended May 2,
2009 compared to net earnings of $55.4 million in the prior year. EBITDA for the
third quarter of fiscal year 2009 was $105.3 million compared to EBITDA of
$202.0 million in the third quarter of fiscal year 2008.

For the 39 weeks ended May 2, 2009, the Company reported total revenues of $2.88
billion compared to $3.57 billion in the prior year. Comparable revenues
decreased 20.8 percent. The Company recorded an operating loss for the 39 weeks
ended May 2, 2009 of $460.8 million compared to operating earnings of $472.6
million for the comparable period a year ago. Adjusted operating earnings for
the 39 weeks ended May 2, 2009 were $99.3 million compared to $440.1 million for
the comparable period a year ago.

Including non-cash impairment charges of $560.1 million and a $32.5 million
pension curtailment gain as described below under "Other Items," the Company
reported a net loss of $499.5 million for the 39 weeks ended May 2, 2009
compared to net earnings of $178.5 million in the prior year. Adjusted EBITDA
for the 39 weeks ended May 2, 2009 was $268.1 million compared to Adjusted
EBITDA of $599.7 million for the comparable period a year ago.

This release contains information regarding the Company`s adjusted operating
earnings, EBITDA and adjusted EBITDA, all of which are non-GAAP financial
measures.Areconciliation of these figures to the most directly comparable GAAP
figures, together with certain other information, can be found at the end of
this release.

Other Items

The Company recorded non-cash impairment charges of $560.1 million in the second
quarter of fiscal year 2009 which represents 1) $291.1 million pretax impairment
charge related to the writedown to fair value of goodwill 2) $242.2 million
pretax impairment charge related to the writedown to fair value of the net
carrying value of tradenames and 3) $26.8 million pretax impairment charge
related to the writedown to fair value of the net carrying value of certain
long-lived assets. The Company also recorded other income of $32.5 million in
the first quarter of fiscal year 2008 which represents a one-time pension
curtailment gain as a result of the Company`s decision to freeze pension and
retirement benefits as of December 31, 2007.

A live webcast of the conference call on earnings can be accessed through the
Investor Information section of the Neiman Marcus, Inc. website at
www.neimanmarcusgroup.com on Wednesday, June 10, 2009 beginning at 9:00 a.m.
Central Standard Time. Following the live broadcast, interested parties may
replay the webcast by accessing this website. To access financial information
that will be presented during the call, please visit the Investor Information
section of the Neiman Marcus, Inc. website at www.neimanmarcusgroup.com.

From time to time, the Company may make statements that predict or forecast
future events or results, depend on future events for their accuracy or
otherwise contain "forward-looking information." These statements are made based
on management's expectations and beliefs concerning future events and are not
guarantees of future performance.

The Company cautions readers that actual results may differ materially as a
result of various factors, some of which are beyond its control, including but
not limited to: political or economic conditions; terrorist activities in the
United States and elsewhere; disruptions in business at the Company`s stores,
distribution centers or offices; changes in consumer confidence resulting in a
reduction of discretionary spending on goods; changes in demographic or retail
environments; changes in consumer preferences or fashion trends; competitive
responses to the Company`s marketing, merchandising and promotional efforts;
changes in the Company`s relationships with key customers; delays in the receipt
of merchandise; seasonality of the retail business; adverse weather conditions,
particularly during peak selling seasons; delays in anticipated store openings
or renovations; natural disasters; significant increases in paper, printing and
postage costs; litigation that may have an adverse effect on the Company`s
financial results or reputation; changes in the Company`s relationships with
designers, vendors and other sources of merchandise; the Company`s success in
enforcing its intellectual property rights; the effects of incurring a
substantial amount of indebtedness under the Company`s senior secured credit
facilities, senior notes and senior subordinated notes and of complying with the
related covenants and conditions; the financial viability of the Company`s
designers, vendors and other sources of merchandise; the design and
implementation of new information systems or enhancement of existing systems;
changes in foreign currency exchange rates or inflation rates; impact of funding
requirements related to the Company`s noncontributory defined benefit pension
plan; changes in the Company`s relationships with certain of key sales
associates; changes in key management personnel; changes in the Company`s
proprietary credit card arrangement that adversely impact its ability to provide
consumer credit; or changes in government or regulatory requirements increasing
the Company`s cost of operations.

These and other factors that may adversely effect the Company`s future
performance or financial condition are contained in its Annual Report in Form
10-K and other reports filed with and available from the Securities and Exchange
Commission. The Company undertakes no obligation to update or revise any
forward-looking statements to reflect subsequent events, new information or
future circumstances.

NEIMAN MARCUS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

May 2, April 26,
(in thousands) 2009 2008

ASSETS
Current assets:
Cash and cash equivalents $ 229,388 $ 206,104
Merchandise inventories 865,980 958,895
Other current assets 165,098 144,743
Total current assets 1,260,466 1,309,742

Property and equipment, net 1,015,060 1,071,875
Goodwill and intangible assets, net 3,437,578 4,095,249
Other assets 69,462 83,717
Total assets $ 5,782,566 $ 6,560,583

LIABILITIES AND SHAREHOLDERS` EQUITY
Current liabilities:
Accounts payable $ 158,975 $ 234,457
Accrued liabilities 347,421 402,187
Total current liabilities 506,396 636,644

Long-term liabilities:
Long-term debt 2,963,311 2,946,053
Deferred income taxes 771,409 966,844
Other long-term liabilities 449,181 300,061
Total long-term liabilities 4,183,901 4,212,958

Total shareholders` equity 1,092,269 1,710,981
Total liabilities and shareholders` equity $ 5,782,566 $ 6,560,583

NEIMAN MARCUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)

Thirteen Weeks Ended Thirty-Nine Weeks Ended
May 2, April 26, May 2, April 26,
(in thousands) 2009 2008 2009 2008

Revenues $ 810,086 $ 1,062,161 $ 2,875,253 $ 3,568,259
Cost of goods sold including buying and occupancy costs 514,765 636,987 1,953,877 2,217,357
Selling, general and administrative expenses 200,515 238,855 686,959 803,404
Income from credit card program, net (10,494 ) (15,704 ) (33,682 ) (52,267 )
Depreciation expense 36,667 35,474 114,378 105,695
Amortization of intangible assets 13,845 13,568 40,981 40,747
Amortization of favorable lease commitments 4,469 4,385 13,408 13,155
Impairment charges - - 560,159 -
Other income - - - (32,450 )

Operating earnings (loss) 50,319 148,596 (460,827 ) 472,618

Interest expense, net 58,250 57,303 174,676 178,923

(Loss) earnings before income taxes (7,931 ) 91,293 (635,503 ) 293,695

Income tax (benefit) expense (4,796 ) 35,898 (135,990 ) 115,239

Net (loss) earnings $ (3,135 ) $ 55,395 $ (499,513 ) $ 178,456

NEIMAN MARCUS, INC.
OTHER OPERATING DATA
(UNAUDITED)

SEGMENTS: Thirteen Weeks Ended Thirty-Nine Weeks Ended
May 2, April 26, May 2, April 26,
(dollars in millions) 2009 2008 2009 2008

REVENUES:
Specialty Retail Stores $ 665.6 $ 893.6 $ 2,363.2 $ 2,991.5
Direct Marketing 144.5 168.6 512.0 576.8
Total $ 810.1 $ 1,062.2 $ 2,875.2 $ 3,568.3

OPERATING EARNINGS (LOSS):
Specialty Retail Stores $ 62.6 $ 151.3 $ 143.2 $ 444.8
Direct Marketing 20.4 28.0 54.4 93.2
Corporate expenses (14.4 ) (12.8 ) (43.9 ) (44.0 )
Amortization of intangible assets and favorable lease commitments (18.3 ) (17.9 ) (54.4 ) (53.9 )
ADJUSTED OPERATING EARNINGS* $ 50.3 $ 148.6 $ 99.3 $ 440.1
Impairment charges - - (560.1 ) -
Other income - - - 32.5
OPERATING EARNINGS (LOSS) $ 50.3 $ 148.6 $ (460.8 ) $ 472.6

*Adjusted operating earnings, a non-GAAP financial measure, represents operating
earnings (loss) excluding impairment charges and other income.

Neiman Marcus, Inc. believes reporting adjusted operating earnings is a more
meaningful representation of the Company`s on-going economic performance and
therefore uses adjusted reporting internally to evaluate and manage the
Company`s operations. Neiman Marcus, Inc. has chosen to provide this information
to investors to enable them to perform more meaningful comparisons of operating
results and as a means to emphasize the results of on-going operations. Adjusted
operating earnings is not a recognized term under generally accepted accounting
principles (GAAP). Adjusted operating earnings should not be considered as an
alternative to operating earnings (loss) or net earnings (loss) as a measure of
operating performance or cash flows as a measure of liquidity. Adjusted
operating earnings should not be considered in isolation to, or as a substitute
for, analysis of the Company`s results reported in accordance with generally
accepted accounting principles. Adjusted operating earnings as presented herein
are not necessarily comparable to similarly titled measures.

NEIMAN MARCUS, INC.
OTHER OPERATING DATA
(UNAUDITED)

OTHER DATA:

Thirteen Weeks Ended Thirty-Nine Weeks Ended
May 2, April 26, May 2, April 26,
(dollars in millions) 2009 2008 2009 2008

Capital expenditures $ 17 $ 45 $ 81 $ 133

Depreciation $ 37 $ 35 $ 114 $ 106
Amortization of intangibles $ 18 $ 18 $ 54 $ 54

Rent expense $ 20 $ 22 $ 64 $ 70

EBITDA* $ 105 $ 202 $ (292 ) $ 632
Adjusted EBITDA* $ 105 $ 202 $ 268 $ 600

*For an explanation of EBITDA and Adjusted EBITDA, see "Non-GAAP Financial
Measure."

NEIMAN MARCUS, INC.
NON-GAAP FINANCIAL MEASURE
(UNAUDITED)

The following table reconciles net (loss) earnings as reflected in the Company`s consolidated statements of
earnings prepared in accordance with GAAP to EBITDA and Adjusted EBITDA:

Thirteen Weeks Ended Thirty-Nine Weeks Ended
May 2, April 26, May 2, April 26,
(dollars in millions) 2009 2008 2009 2008

Net (loss) earnings $ (3.1 ) $ 55.4 $ (499.5 ) $ 178.5
Income tax (benefit) expense (4.8 ) 35.9 (136.0 ) 115.2
Interest expense, net 58.2 57.3 174.7 178.9
Depreciation 36.7 35.5 114.4 105.7
Amortization of intangible assets and favorable lease commitments 18.3 17.9 54.4 53.9
EBITDA 105.3 202.0 (292.0 ) 632.2
Non-cash impairment of long-lived assets - - 560.1 -
Non-cash gain on curtailment of defined benefit retirement obligations - - - (32.5 )
Adjusted EBITDA $ 105.3 $ 202.0 $ 268.1 $ 599.7

We present the non-GAAP financial measures EBITDA and Adjusted EBITDA because we
use these measures to monitor and evaluate the performance of our business and
believe the presentation of these measures will enhance investors` ability to
analyze trends in our business, evaluate our performance relative to other
companies in our industry and evaluate our ability to service our debt. In
addition, we use EBITDA and Adjusted EBITDA as components of the measurement of
incentive compensation.

EBITDA and Adjusted EBITDA are not presentations made in accordance with GAAP
and this computation may vary from others in the industry. In addition, EBITDA
and Adjusted EBITDA contain some, but not all, adjustments that are taken into
account in the calculation of the components of various covenants in the
indentures governing the Company`s senior secured Asset-Based Revolving Credit
Facility, Senior Secured Term Loan Facility, Senior Notes and Senior
Subordinated Notes. EBITDA and Adjusted EBITDA should not be considered as
alternatives to operating earnings (loss) or net earnings (loss) as measures of
operating performance or cash flows as measures of liquidity. EBITDA and
Adjusted EBITDA have important limitations as analytical tools and should not be
considered in isolation, or as a substitute for analysis of the Company`s
results as reported under GAAP. For example, EBITDA and Adjusted EBITDA do not
reflect cash expenditures, or future requirements, for capital expenditures or
contractual commitments; do not reflect changes in, or cash requirements, for
working capital needs; do not reflect our considerable interest expense, or the
cash requirements necessary to service interest or principal payments, on the
Company`s debt; exclude tax payments that represent a reduction in cash
available; and do not reflect any cash requirements for assets being depreciated
and amortized that may have to be replaced in the future.

Neiman Marcus, Inc.
James E. Skinner, 214-757-2954
Executive Vice President and
Chief Financial Officer
or
Stacie Shirley, 214-757-2967
Vice President - Finance
and Treasurer

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