The Right Start Announces Improved Fourth Quarter Operating Results

Calabasas, California, UNITED STATES


WESTLAKE VILLAGE, Calif., April 30, 2001 (PRIMEZONE) -- The Right Start, Inc. (Nasdaq:RTST), today announced results for the fourth quarter and fiscal year ended February 3, 2001.

Jerry R. Welch, Chairman and CEO, said, "In a difficult retailing environment, our fourth quarter operating results improved significantly over last year. Total retail store sales increased 24%, same store sales were up 6% and EBITDA improved 13%. In addition to our improved operating results, we also opened six new street stores during the quarter in Detroit, San Francisco, Chicago, Houston and San Antonio."

On October 10, 2000, RightStart.com Inc., the company's direct-to-consumer affiliate, issued 2.0 million shares of common stock representing 18% of the shares outstanding after the transaction. The percentage of common stock ownership of RightStart.com by the Company was reduced from 60.2% to 49.4%. Consequently, the results of RightStart.com are now accounted for under the equity method of accounting. Accordingly, the Company's financial statements as of and for the year ended February 3, 2001 are presented on an unconsolidated basis retroactive to the beginning of the current fiscal year.

Like most retailers, the Company has a fiscal year consisting of fifty-two or fifty-three weeks ending on the Saturday closest to the last day of January. The year and quarter ended February 3, 2001 were fifty-three and fourteen week periods, respectively, while the year and quarter ended January 29, 2000 were fifty-two and thirteen week periods, respectively.

Retail store sales for the quarter ended February 3, 2001 were $13.3 million, an increase of 23.7% over retail store sales of $10.7 million for the quarter ended January 29, 2000. For the fiscal year, retail store sales increased 16.2%, to $44.2 million from $38.0 million for last fiscal year. Same store sales, or sales for stores only open for comparable periods, increased 5.8% for the quarter and .9% for the fiscal year, after adjusting for the effect of one additional week this fiscal year.

For the quarter, the Company's retail store earnings, before interest, taxes, depreciation and amortization, and before new store pre-opening costs, non-cash compensation and non-recurring charges (EBITDA) improved 12.8% to $660,000 compared to $585,000 for the fourth quarter last year. For the year, the Company achieved EBITDA of $111,000, compared to $786,000 last year. Prior year EBITDA was positively affected by $307,000 of income from The Right Start Catalog prior to its contribution to RightStart.com. The current year EBITDA was adversely affected during the first three quarters by higher distribution expenses and by slightly higher operating expenses for new stores opened at the end of fiscal 1999.

Due to the deconsolidation of RightStart.com, the Company recorded a gain on its investment on RightStart.com of $2,554,000 in the third quarter. This gain partially offset year-to-date losses for RightStart.com, resulting in a net loss of $3,406,000 on the Company's investment for the year. Accordingly, the Company reported a net loss of $7,704,000, or $1.46 a share, for the year and $461,000, or $.11 a share, for the quarter. For the previous year, which includes the consolidated operations of RightStart.com, the Company incurred a consolidated net loss of $10,842,000, or $2.14 a share, and a consolidated net loss for the quarter of $4,132,000, or $.78 a share.

Mr. Welch continued, "Due to our solid same store sales performance in the important fourth quarter, we were able to achieve our third consecutive year of positive same store sales comparisons. In light of the slowing economy and the intense competition in retailing, we feel pleased about our fourth quarter sales results." Mr. Welch also noted that the Company ended the fiscal year with 61 stores in operation including 26 enclosed regional mall locations and 35 neighborhood street locations. "In late 1997, we opened our first street stores and it has been our exclusive new store format since then. We are very excited about the operating results of our street stores and we intend to accelerate their rollout over the next several years," concluded Mr. Welch.

About Right Start

The Right Start, Inc. is the largest national specialty retailer of high quality developmental, educational and care products for infants and children through age four. The Right Start brand originated in 1985 through the creation of the award-winning Right Start Catalog(tm). The Right Start now operates 64 retail stores nationwide.

About RightStart.com

RightStart.com is a leading online specialty retailer for infants and children and currently operates the Right Start Catalog(tm). RightStart.com is dedicated to providing customers with a unique online shopping experience by offering an assortment of trusted products carefully selected with regard to quality and developmental and educational value.

The companies are based in Westlake Village, Calif.

This press release may contain certain forward-looking statements with respect to the financial condition, results of operations and expansion projects of The Right Start that may be impacted by factors including, but not limited to, the availability of capital, competition from other retailers and potential product liability claims and other risks included in The Right Start's filings with the Securities and Exchange Commission including, but not limited to, The Right Start's Registration Statement on Form S-3 (File No. 333-84319), its Annual Report of Form 10-K/A for the fiscal year ended January 29, 2000 and its quarterly reports.


                   THE RIGHT START, INC.
                  STATEMENTS OF OPERATIONS
                        (unaudited)
                                                 The Right Start, Inc.
                                                       (consolidating)
                                                       ---------------
                            The Right Start, Inc.(a)   Retail Stores
                                   53 weeks ended      52 weeks ended
                                      Feb. 3, 2001      Jan. 29, 2000
                                      ------------      ------------
 Retail store sales                    $13,250,000      $10,715,000
 Sales to RightStart.com                 2,356,000    
 Internet sales                                       
 Catalog sales                                        
 Shipping and handling revenues                       
                                       -----------      -----------
    Net sales                           15,606,000       10,715,000
                                                      
 Costs and expenses:                                  
  Cost of goods sold - merchandise       6,524,000        5,243,000
  Cost of goods sold to RightStart.com   2,356,000    
  Cost of goods sold -                                
     shipping and handling                            
  Operating expense                      4,692,000        3,890,000
  Non-cash compensation expense              8,000    
  Marketing and advertising expense        221,000          204,000
  General and administrative expense     1,153,000          793,000
  Pre-opening costs                        138,000           95,000
  Depreciation and amortization expense    594,000          539,000
  Store closing expense                     14,000    
                                       -----------      -----------
 Operating income (loss)                   (94,000)         (49,000)
                                                      
  Minority interest in                                
   consolidated subsidiary                            
  Gain on investment in RightStart.com                
  Interest (income) expense                347,000          133,000
                                       -----------      -----------
 Pre-tax income (loss)                    (441,000)        (182,000)
 Income tax provision                       20,000           20,000
                                       -----------      -----------
                                                      
 Net income (loss)                     $  (461,000)     $  (202,000)
                                       ===========      ===========
                                                      
 Basic income (loss) per share         $     (0.11)     $     (0.05)
 Basic weighted average                               
   number of shares outstanding          5,617,275        5,411,700
                                                     
                                                       
                                      The Right Start, Inc.
                                         (consolidating)
                            -----------------------------------------
                        Rightstart.com Inc.              Consolidated
                          52 weeks ended                52 weeks ended
                           Jan. 29, 2000  Eliminations   Jan. 29, 2000
                            ------------- ------------  -------------
 Retail store sales                                       $10,715,000
 Sales to RightStart.com                      
 Internet sales                $4,938,000                   4,938,000
 Catalog sales                                
 Shipping and                     595,000                     595,000
   handling revenues              145,000                     145,000
                              -----------                 -----------
    Net sales                   5,678,000                  16,393,000
                                              
 Costs and expenses:                          
  Cost of goods sold -                        
    merchandise                 3,451,000                   8,694,000
  Cost of goods sold                          
    to RightStart.com                         
  Cost of goods sold -                        
     shipping and handling      1,565,000                   1,565,000
  Operating expense             1,918,000                   5,808,000
  Non-cash                                    
   compensation expense            41,000                      41,000
  Marketing and                               
    advertising expense         3,760,000                   3,964,000
  General and                                  
    administrative expense      1,359,000                   2,152,000
  Pre-opening costs                                            95,000
  Depreciation and                            
    amortization expense          197,000                     736,000
  Store closing expense                       
                              -----------  -----------    -----------
 Operating income (loss)       (6,613,000)                 (6,662,000)
 
  Minority interest in
   consolidated subsidiary                 $(2,599,000)    (2,599,000)
  Gain on investment
   in RightStart.com
  Interest (income) expense       (84,000)                     49,000
                              -----------  -----------    -----------
 Pre-tax income (loss)         (6,529,000)   2,599,000     (4,112,000)
 Income tax provision                                          20,000
                              -----------  -----------    -----------
 
 Net income (loss)            $(6,529,000) $ 2,599,000    $(4,132,000)
                              ===========  ===========    ===========
 
 Basic income (loss) per share                            $     (0.78)
 Basic weighted average
   number of shares outstanding                             5,411,700
 
 
                                                 The Right Start, Inc.
                                                       (consolidating)
                                                      ---------------
                            The Right Start, Inc.(a)    Retail Stores
                                 53 weeks ended        52 weeks ended
                                  Feb. 3, 2001          Jan. 29, 2000
                                  ------------           ------------
 Retail store sales               $ 44,201,000           $ 38,043,000
 Sales to RightStart.com             9,408,000
 Internet sales
 Catalog sales                                              1,686,000
 Shipping and handling revenues                               494,000
                                  ------------           ------------
     Net sales                      53,609,000             40,223,000
 
 Costs and expenses:
  Cost of goods sold
   - merchandise                    21,952,000             19,576,000
  Cost of goods sold to
   RightStart.com                    9,408,000
  Cost of goods sold
   - shipping and handling                                    483,000
  Operating expense                 17,121,000             15,112,000
  Non-cash compensation
   expense                              93,000              1,794,000
  Marketing and advertising
   expense                           1,000,000                830,000
  General and administrative
   expense                           4,017,000              3,436,000
  Pre-opening costs                    456,000                323,000
  Depreciation and amortization
   expense                           2,184,000              1,672,000
  Store closing expense                401,000                151,000
                                  ------------           ------------
 Operating income (loss)            (3,023,000)            (3,154,000)
 
  Minority interest in
   consolidated subsidiary
  Loss on investment in
   RightStart.com                    3,406,000
  Interest (income) expense          1,197,000                465,000
                                  ------------           ------------
 Pre-tax income (loss)              (7,626,000)            (3,619,000)
 Income tax provision                   78,000                 68,000
                                  ------------           ------------
 Net income (loss)                $ (7,704,000)          $ (3,687,000)
                                  ============           ============
 
 Basic and diluted income
  (loss) per share                $      (1.46)          $      (0.74)
 Basic and diluted weighted
  average number of shares
  outstanding                        5,597,809              5,355,756
 
 
                                      The Right Start, Inc.
                                         (consolidating)
                            -----------------------------------------
                        Rightstart.com Inc.              Consolidated
                          52 weeks ended                52 weeks ended
                           Jan. 29, 2000  Eliminations   Jan. 29, 2000
                           -------------  ------------   -------------
 Retail store sales                                      $ 38,043,000
 Sales to RightStart.com
 Internet sales                7,391,000    7,391,000
 Catalog sales                 1,959,000    3,645,000
 Shipping and handling
  revenues                       271,000      765,000
                            ------------  -----------    ------------
     Net sales                 9,621,000                   49,844,000
 
 Costs and expenses:
  Cost of goods sold
   - merchandise
  Cost of goods sold to        5,703,000                   25,279,000
   RightStart.com
  Cost of goods sold
   - shipping and handling     2,195,000                    2,678,000
  Operating expense
  Non-cash compensation        3,345,000                   18,457,000
   expense
  Marketing and advertising      220,000                    2,014,000
   expense
  General and administrative   6,403,000                    7,233,000
   expense                     1,870,000                    5,306,000
  Pre-opening costs
  Depreciation and                                            323,000
   amortization expense          278,000                    1,950,000
  Store closing expense                                       151,000
                            ------------  -----------    ------------
 Operating income (loss)     (10,393,000)                 (13,547,000)
 
  Minority interest in
   consolidated subsidiary
  Loss on investment in                   $(3,000,000)   $ (3,000,000)
   RightStart.com
  Interest (income) expense     (238,000)                     227,000
                            ------------  -----------    ------------
 Pre-tax income (loss)       (10,155,000)   3,000,000     (10,774,000)
 Income tax provision                                          68,000
                            ------------  -----------    ------------
 Net income (loss)          $(10,155,000) $ 3,000,000    $(10,842,000)
                            ============  ===========    ============
 
 Basic and diluted
  income (loss) per share                                $      (2.14)
 Basic and diluted weighted
  average number of shares
  outstanding                                               5,355,756
 
 
  (a)  On October 10, 2000 RightStart.com Inc. issued shares of
       common stock which reduced Right Start, Inc. ownership in
       the company to less than 50%. Accordingly, Right Start, Inc.
       has revised its current year financial statements to reflect
       results on an unconsolidated basis.


        

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