The Children's Place Reports 2004 Third Quarter Financial Results
- Net Sales Increase 26%; Comparable Store Sales Increase 18%
- Earnings Per Share Increase 51% to $0.65 Compared to $0.43 Last Year
- Company Expands Credit Facility
SECAUCUS, N.J.--(BUSINESS WIRE)--Nov. 11, 2004--The Children's Place Retail Stores, Inc. (Nasdaq:PLCE) today reported financial results for the third quarter and nine months ended October 30, 2004.
Third Quarter
-- Net sales for the third quarter increased 26% to $280.5
million, compared with $223.3 million a year earlier.
-- Comparable store sales increased 18% in the quarter, on top of
a 14% increase for the same period last year.
-- Net income was $17.7 million, compared to net income of $11.6
million last year.
-- Earnings per share were $0.65 compared to earnings per share of
$0.43 in the fiscal 2003 period.
-- The Company opened 19 new stores during the third quarter.
Nine-Month Period
-- Net sales for the nine-month period increased 23% to $695.4
million, from $563.4 million for the same period in 2003.
-- Comparable store sales increased 15% for the period, compared
to a 1% increase for the same period last year.
-- Net income was $19.3 million, compared to net income of $7.8
million in the year-ago period.
-- Diluted earnings per share were $0.70 compared to earnings per
share of $0.29 in the 2003 period.
-- The Company opened 45 new stores during the nine-month period,
and closed two.
"The third quarter was an exhilarating one for our Company," said Ezra Dabah, Chairman and Chief Executive Officer of The Children's Place. "Not only did we report significantly increased earnings over the prior year, we also announced our definitive agreement to acquire the Disney Store North America retail chain, a major milestone for our Company."
"Customer response to our Back-to-School and Holiday dressy merchandise was incredibly positive. Most important, our inventory investment in key drivers enabled us to meet demand and ensured a strong in-stock position throughout the season. This, combined with our strategic investments in merchandise quality, paid off for us and further strengthened our competitive position. We are encouraged by our positive momentum and look forward to a successful Holiday season."
Separately, the Company announced that it has entered into an amended and restated loan agreement with Wells Fargo Retail Finance, LLC ("Wells Fargo"). The Company negotiated this loan agreement partly in connection with the pending acquisition of the Disney Store North America retail chain, which is scheduled to close in November. This loan agreement, with Wells Fargo as its administrative agent, expands and amends the Company's senior secured credit facility and provides for borrowings up to $130 million (including a sub-limit for letters of credit of $100 million), subject to the amount of the Company's eligible inventory and accounts receivable. The term of the facility extends until November 1, 2007 and may be subsequently renewed for successive one-year periods.
The Children's Place will host a webcast of its third quarter conference call today at 10:00 a.m., Eastern Time. Interested parties are invited to listen to the call at the Company's web site, www.childrensplace.com. An archive of the webcast will be available on the site through Thursday, November 18, 2004.
The Children's Place Retail Stores, Inc. is a leading specialty retailer of high quality, value-priced apparel and accessories for children, newborn to age ten. The Company designs, contracts to manufacture and sells its products under the "The Children's Place" brand name. As of October 30, 2004, the Company operated 734 stores, including 678 stores in the United States, 54 stores in Canada and two stores in Puerto Rico. The Company also sells its merchandise through its virtual store located at www.childrensplace.com.
This press release and above referenced call may contain certain forward-looking statements regarding future circumstances. These forward-looking statements are based upon the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements including, in particular, the risks and uncertainties described in the Company's filings with the Securities and Exchange Commission. Actual results, events, and performance may differ. Readers or listeners (on the call) are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this release does not constitute an admission by The Children's Place or any other person that the events or circumstances described in such statement are material.
(Tables Follow)
THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
13 Weeks Ended: 39 Weeks Ended:
-------------- --------------
October 30, November 1, October 30, November 1,
---------- ---------- ---------- ----------
2004 2003 2004 2003
---- ---- ---- ----
Net sales $ 280,496 $223,277 $695,440 $563,369
Cost of sales 166,513 131,987 431,300 351,719
--------- -------- -------- --------
Gross profit 113,983 91,290 264,140 211,650
Selling, general
and administrative
expenses 74,010 62,083 200,914 169,462
Depreciation and
amortization 10,493 10,154 31,195 29,557
------- ------- ------- -------
Operating income 29,480 19,053 32,031 12,631
Interest (income)
expense, net (48) 17 (154) (128)
------- ------- ------- -------
Income before
income taxes 29,528 19,036 32,185 12,759
Provision for
income taxes 11,845 7,424 12,881 4,977
Net income $ 17,683 $ 11,612 $ 19,304 $ 7,782
========= ======== ======== =======
Basic income per
share $ 0.66 $ 0.44 $ 0.72 $ 0.29
Basic weighted
average number
of shares
outstanding 26,928 26,640 26,867 26,620
Diluted income
per share $ 0.65 $ 0.43 $ 0.70 $ 0.29
Diluted weighted
average number
of shares
outstanding 27,393 27,153 27,475 26,961
THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED BALANCE SHEETS
(In thousands)
October 30, January 31, November 1,
2004 2004 2003
---------- ---------- -----------
(Unaudited) (Unaudited)
Current assets:
Cash and cash
equivalents $ 45,344 $ 74,772 $ 44,182
Accounts
receivable 14,249 8,462 12,747
Inventories 143,367 96,128 95,893
Other current
assets 23,588 20,070 21,065
---------- --------- ---------
Total current
assets 226,548 199,432 173,887
Property and
equipment, net 153,866 146,707 149,354
Other assets, net 14,054 13,527 9,200
Total assets $ 394,468 $ 359,666 $332,441
========== ========= ========
Current
liabilities:
Revolving credit
facility $ 0 $ 0 $ 0
Accounts payable 40,721 35,173 34,152
Accrued expenses
and other current
liabilities 56,183 49,984 44,008
---------- --------- ---------
Total current
liabilities 96,904 85,157 78,160
Other liabilities 15,608 17,504 15,815
Total liabilities 112,512 102,661 93,975
Stockholders'
equity 281,956 257,005 238,466
---------- --------- ---------
Total liabilities
and stockholders'
equity $ 394,468 $ 359,666 $ 332,441
========== ========= =========
CONTACT: The Children's Place
Seth Udasin, 201-558-2409
or
Investor Relations:
Heather Anthony, Director, 201-558-2865
SOURCE: The Children's Place Retail Stores, Inc.