UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported): November 21,
2007
THE
CHILDREN’S PLACE RETAIL STORES, INC.
(Exact
name of registrant as specified in charter)
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Delaware
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0-23071
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31-1241495
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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915
Secaucus Road, Secaucus, New Jersey, 07094
(Address
of Principal Executive Offices) (Zip Code)
(201)
558-2400
(Registrant’s
telephone number, including area code)
Not
applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
2.02 Results of Operations and Financial Condition
On
November 21, 2007, The Children’s Place Retail Stores, Inc. (the “Company”)
issued a press release announcing
preliminary financial results for
its
fiscal third quarter ended November
3, 2007.
A
copy of
the press release relating to the foregoing is attached hereto as Exhibit
99.1
and is
incorporated in this Item 2.02 by reference.
The
information contained under this Item 2.02 shall not be deemed “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly
set
forth by specific reference in such a filing.
Item
8.01 Other Events
On
November 21, 2007, the Company, issued a press release announcing that
Richard
Paradise, 45,
will be
joining the Company as Senior Vice President, Finance and that Mr. Paradise
is
expected to become the Company's chief financial officer once the Company has
filed its delinquent periodic reports with the Securities and Exchange
Commission. He
will
report directly to Susan Riley, Executive Vice President, Finance &
Administration. A
copy of
the Company's press release is included as Exhibit 99.2.
In
addition, the Company announced last week that it was unable to complete and
file its delinquent SEC reports by end of business on November 14, 2007, the
previous deadline imposed by the Board of Directors of the Nasdaq Stock Market,
but that the Company has been granted an extension until January 9, 2008 by
the
Nasdaq Board to file all of its delinquent periodic reports to regain compliance
with Rule 4310(c)(14).
While
the
Company continues to believe it will be able to file its financial reports
soon,
there is no assurance that the Company will be able to meet the new deadline,
and if it does not, there is no assurance that the Nasdaq Board will grant
the
Company additional time to become compliant. If the Company has not regained
compliance by January 2, 2008, it will need to explain to the Nasdaq Staff
the
reasons for its inability to do so, in order for the Nasdaq Board to consider
whether any further extension is warranted. If the Company fails to come into
compliance by January 9, 2008, or any extended deadline, the Company anticipates
that its shares will be delisted.
Item
9.01 Financial Statements and Exhibits
| (a) |
Financial
Statements of Business Acquired: Not
applicable
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| (b) |
Pro
Forma Financial Information: Not
applicable
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| (c) |
Exhibits:
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| 99.1 |
First
Press Release dated November 21,
2007.
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| 99.2 |
Second
Press Release dated November 21,
2007.
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[SIGNATURE
BLOCK FOLLOWS]
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| THE CHILDREN’S PLACE RETAIL STORES, INC. | ||
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| By: | /s/ Susan Riley | |
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Name:
Susan Riley
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| Title: Executive Vice President, Finance and Administration | ||
| Dated: November 21, 2007 | ||
FOR
IMMEDIATE RELEASE
THE
CHILDREN’S PLACE RETAIL STORES, INC. REPORTS PRELIMINARY
THIRD
QUARTER 2007 FINANCIAL RESULTS
Secaucus,
New Jersey - November 21, 2007 - The Children’s Place Retail Stores, Inc.
(Nasdaq: PLCE)
today
reported preliminary financial results for the fiscal third quarter ended
November 3, 2007. These preliminary results may be subject to adjustment until
the Company completes its historical financial statements and files its
delinquent SEC reports. As a result, the Company is not providing net income
on
a per share basis or full comparative financial results for the third quarter
ended October 28, 2006, and is providing only selected balance sheet data.
Third
Quarter
| · |
Consolidated
net sales for the third quarter ended November 3, 2007, increased
7% to
$587.4 million compared to $550.4 million for the same period last
year.
Third quarter sales were comprised of $429.4 million from The Children’s
Place brand, an 8% increase over the same period last year, and $158.0
million from Disney Store, a 3% increase over the same period last
year.
|
| · |
Due
to the 53rd
week in fiscal 2006, comparable store sales are compared to the thirteen
week period ended November 4, 2006. On that basis, consolidated comparable
store sales increased 1% in the quarter. The Children’s Place brand’s
comparable store sales increased 1% versus last year’s 15% increase.
Disney Store’s comparable store sales were flat, compared to last year’s
11% increase.
|
| · |
Preliminary
net income for the third quarter was $11.8 million. Included in net
income
was approximately $4.0 million, pre-tax, or $0.09 per share, in severance
expense related to the Company’s former Chief Executive Officer, and
approximately $2.3 million, or $0.05 per share, related to previously
disclosed investigation fees incurred in the quarter.
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| · |
Preliminary
shares outstanding in the third quarter are estimated at approximately
29
million.
|
| · |
During
the third quarter, the Company opened 25 Children’s Place stores and
closed one. The Company did not open or close any Disney Stores during
the
quarter.
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Nine-Month
Period
| · |
Consolidated
net sales for the nine-month period ended November 3, 2007, increased
9%
to $1,490.6 million compared to $1,372.5 million for the same period
last
year. Sales for the nine-month period were comprised of $1,076.0
million
from The Children’s Place brand, a 9% increase over the same period last
year, and $414.6 million from Disney Store, an 8% increase over the
same
period last year.
|
| · |
Due
to the 53rd
week in fiscal 2006, comparable store sales are compared to the
thirty-nine week period ended November 4, 2006. On that basis,
consolidated comparable store sales increased 1% for the nine-month
period. The Children’s Place brand’s comparable store sales increased 1%
compared to last year’s 13% increase. Disney Store’s comparable store
sales increased 2% compared to last year’s 14%
increase.
|
| · |
Preliminary
net loss for the nine-month period was $1.5 million.
|
| o |
During
the nine-month period, the Company incurred approximately $5.7 million,
pre-tax, or $0.12 per share, in professional fees associated with
the
Company’s previously disclosed investigations and approximately $4.0
million, pre-tax, or $0.09 per share, in the above-mentioned severance
expense.
|
| o |
In
addition, as disclosed in the Company’s October 9, 2007 press release, due
to its financial performance, the Company decided to reverse accruals
for
its long-term equity compensation program which would have resulted
in a
non-cash gain of approximately $0.25 per share in the first half
of fiscal
2007. It has subsequently been determined that $0.05 per share of
the
$0.25 per share gain should be recorded in the first half of fiscal
2007,
and therefore the remaining $0.20 per share is to be recorded in
fiscal
2006.
|
| · |
Preliminary
shares outstanding in the nine-month period are estimated at approximately
29 million.
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| · |
For
the nine-month period, the Company opened 47 Children’s Place stores and
closed six. The Company did not open or close any Disney Stores during
the
nine-month period.
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-
more
-
PLCE
- Preliminary Third Quarter Fiscal 2007 Financial Results
Page
2
“The
third quarter was challenging on a variety of levels and clearly, we are
disappointed with the results,” said Chuck Crovitz, Interim Chief Executive
Officer of The Children’s Place Retail Stores, Inc. “Total sales were lower than
planned due to merchandise that did not resonate with our Children’s Place
customer, the unusually warm weather and the challenging macroeconomic
environment, which impacted both brands. Our results were further challenged
by
the impact of merchandise purchased for Disney Stores that are opening later
in
the year than originally scheduled. All of these issues resulted in significant
margin pressure as we increased promotional activity to clear through
merchandise.”
Mr.
Crovitz concluded, “Despite these near-term pressures, we have confidence in the
underlying businesses and the long-term opportunities for the Company. In the
near term we are focusing on three key areas to strengthen our operational
and
financial results. We plan to implement a more conservative inventory investment
strategy, slow the rate of capital spending and new store openings, particularly
at The Children’s Place, and reduce our expense structure.”
The
Children’s Place will host a conference call to discuss its preliminary third
quarter results today at 10:00 a.m. Eastern Time. Interested parties are invited
to listen to the call by dialing (785) 424-1055 and providing the Conference
ID,
PLCE. The call will also be webcast live and can be accessed via the Company’s
web site, www.childrensplace.com.
A
replay of the call will be available approximately one hour after the conclusion
of the call, until midnight on November 28, 2007. To access the replay, please
dial (402) 220-0119, or you may listen to the audio archive on the Company’s
website, www.childrensplace.com.
The
Children’s Place Retail Stores, Inc. is a leading specialty retailer of
children’s merchandise. The Company designs, contracts to manufacture and sells
high-quality, value-priced merchandise under the proprietary “The Children’s
Place” and licensed “Disney Store” brand names. As of November 3, 2007, the
Company owned and operated 907 The Children’s Place stores and 328 Disney Stores
in North America and its online stores at www.childrensplace.com
and
www.disneystore.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, as well as the risks and
uncertainties relating to the Company's stock option granting practices and
the
completed investigation by the special committee of the Company's Board of
Directors, the previously announced pending restatement of the Company's
historical financial statements, the delays in filing the Company's periodic
reports with the Securities and Exchange Commission, the pending NASDAQ
proceedings regarding the Company's continued listing, the outcome of the
informal investigation of the Company being conducted by the Securities and
Exchange Commission, potential other governmental proceedings, the shareholder
litigation commenced against the Company and certain of its officers and
directors, and the potential impact of each of these matters on the Company.
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. The Company undertakes
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 Company or any other
person that the events or circumstances described in such statement are
material.
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Contact:
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The
Children’s Place Retail Stores, Inc.
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Investors:
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Susan
Riley, EVP, Finance & Administration, 201/558-2400
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Heather
Anthony, Senior Director, Investor Relations,
201/558-2865
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Jane
Singer, Investor Relations, 201/453-6955
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Media:
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Cara
O’Brien/Leigh Parrish, FD,
212-850-5600
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(Tables
Follow)
THE
CHILDREN’S PLACE RETAIL STORES, INC.
PRELIMINARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands)
(Unaudited)
|
13
Weeks Ended:
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39
Weeks Ended:
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||||||||||||
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November
3, 2007
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%
of
Sales
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November
3,
2007
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%
of
Sales
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||||||||||
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Net
sales
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$
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587,416
|
100.0
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%
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$
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1,490,576
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100.0
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%
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|||||
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Cost
of sales
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361,853
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61.6
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%
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943,764
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63.3
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%
|
|||||||
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Gross
profit
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225,563
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38.4
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%
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546,812
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36.7
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%
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|||||||
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Selling,
general and administrative expenses
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184,512
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31.4
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%
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490,886
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33.0
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%
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|||||||
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Asset
impairment charge
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947
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0.2
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%
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1,582
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0.1
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%
|
|||||||
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Depreciation
and amortization
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20,552
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3.5
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%
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56,856
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3.8
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%
|
|||||||
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Operating
income (loss)
|
19,552
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3.3
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%
|
(2,512
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)
|
(0.2
|
)%
|
||||||
|
Interest
expense (income), net
|
774
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0.1
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%
|
(1,109
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)
|
(0.1
|
)%
|
||||||
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Income
(loss) before income taxes
|
18,778
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3.2
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%
|
(1,403
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)
|
(0.1
|
)%
|
||||||
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Provision
for income taxes
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6,939
|
1.2
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%
|
135
|
0.0
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%
|
|||||||
|
Net
income (loss)
|
$
|
11,839
|
2.0
|
%
|
$
|
(1,538
|
)
|
(0.1
|
)%
|
||||
THE
CHILDREN’S PLACE RETAIL STORES, INC.
SELECTED
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In
thousands)
(Unaudited)
|
November
3, 2007
|
February
3, 2007
|
October
28, 2006
|
||||||||
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Cash
and short term investments
|
$
|
111,225
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$
|
192,038
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$
|
147,257
|
||||
|
Inventories
|
392,685
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241,717
|
302,394
|
|||||||
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Revolving
credit facility
|
$
|
108,886
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$
|
0
|
$
|
0
|
||||
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Accounts
payable
|
165,919
|
85,360
|
127,673
|
|||||||
THE
CHILDREN’S PLACE RETAIL STORES, INC.
SEGMENT
INFORMATION
(In
millions)
(Unaudited)
|
Thirteen
Weeks Ended November 3, 2007
|
|||||||||||||
|
The
Children’s
Place
|
Disney
Store
|
Shared
Services
|
Total
Company
|
||||||||||
|
Net
sales
|
$
|
429.4
|
$
|
158.0
|
$
|
-
|
$
|
587.4
|
|||||
|
Segment
operating profit (loss)
|
46.4
|
(1.3
|
)
|
(25.5
|
)
|
19.6
|
|||||||
|
Operating
profit (loss) as a percent of net sales
|
10.8
|
%
|
(0.8
|
)%
|
N/A
|
3.3
|
%
|
||||||
|
Thirty-nine
Weeks Ended November 3, 2007
|
|||||||||||||
|
The
Children’s
Place
|
Disney
Store
|
Shared
Services
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Total
Company
|
||||||||||
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Net
sales
|
$
|
1,076.0
|
$
|
414.6
|
$
|
-
|
$
|
1,490.6
|
|||||
|
Segment
operating profit (loss)
|
89.5
|
(15.2
|
)
|
(76.8
|
)
|
(2.5
|
)
|
||||||
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Operating
profit as a percent of net sales
|
8.3
|
%
|
(3.7
|
)%
|
N/A
|
(0.2
|
)%
|
||||||
###
FOR
IMMEDIATE RELEASE
THE
CHILDRENS PLACE RETAIL STORES, INC. NAMES
RICHARD
PARADISE SENIOR VICE PRESIDENT, FINANCE
Secaucus,
New Jersey - November 21, 2007 - The Children’s Place Retail Stores, Inc.
(Nasdaq: PLCE) today
announced the appointment of Richard Paradise, 45, as Senior Vice President,
Finance. It is expected that Mr. Paradise will assume the role of Chief
Financial Officer as soon as the Company has filed its delinquent SEC financial
reports. He will report directly to Susan Riley, Executive Vice President,
Finance & Administration.
Mr.
Paradise joins the Company with more than 20 years of finance experience. He
most recently served at American Standard Companies, Inc. as Vice President
and
Chief Financial Officer of the Bath & Kitchen division, and prior to that as
Corporate Vice President & Controller. Previously, Mr. Paradise held a
number of senior financial positions with AlliedSignal Inc. (currently Honeywell
International Inc.) including Director of Six Sigma and Credit &
Collections; Manager of Financial Business Services; and Manager of Internal
Reporting for EMS, a division of AlliedSignal. He began his career as an auditor
with Price Waterhouse. Mr. Paradise earned his Bachelor of Arts from Rutgers
College, holds an MBA from Rutgers Graduate School of Management, and is a
Certified Public Accountant.
“Rich
brings a solid track record of success in finance and we are very pleased he
is
joining our management team at this important time in the life of our Company,”
said Ms. Riley. “With Rich’s significant operational and process experience, he
will be instrumental in helping us streamline our business and drive
efficiencies across the organization, consistent with our focus in these key
areas.”
The
Children’s Place Retail Stores, Inc. is a leading specialty retailer of
children’s merchandise. The Company designs, contracts to manufacture and sells
high-quality, value-priced merchandise under the proprietary “The Children’s
Place” and licensed “Disney Store” brand names. As of November 3, 2007, the
Company owned and operated 907 The Children’s Place stores and 328 Disney Stores
in North America and its online stores at www.childrensplace.com
and
www.disneystore.com.
This
press release 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, as well as the risks and uncertainties relating to
the
Company's stock option granting practices and the completed investigation by
the
special committee of the Company's Board of Directors, the previously announced
pending restatement of the Company's historical financial statements, the delays
in filing the Company's periodic reports with the Securities and Exchange
Commission, the pending NASDAQ proceedings regarding the Company's continued
listing, the outcome of the informal investigation of the Company being
conducted by the Securities and Exchange Commission, potential other
governmental proceedings, the shareholder litigation commenced against the
Company and certain of its officers and directors, and the potential impact
of
each of these matters on the Company. Actual results, events, and performance
may differ. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes 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 Company or any other person that the events or circumstances described
in
such statement are material.
|
CONTACT:
|
The
Children’s Place Retail Stores, Inc.
|
|
Investors:
|
Heather
Anthony, Senior Director, Investor Relations,
201/558-2865
|
|
|
Jane
Singer, Investor Relations, 201/453-6955
|
|
Media:
|
Cara
O’Brien/Leigh Parrish, FD, 212/850-5600
|
|
###
|
|