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): March 17, 2009
THE
CHILDREN’S PLACE RETAIL STORES, INC.
(Exact
Name of Registrants as Specified in Their Charters)
Delaware
(State
or Other Jurisdiction of Incorporation)
|
0-23071
|
31-1241495
|
|
(Commission
File Number)
|
(IRS
Employer Identification
No.)
|
|
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 (see General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry Into a Material Definitive
Agreement.
On March 17, 2009, The Children's Place
Retail Stores, Inc. (the "Company"), completed a series of transactions pursuant
to which, among other things, the Company, through its indirect wholly-owned
subsidiary, The Children's Place Services Company, LLC ("TCP Services"), has
agreed to rent approximately 119,979 square feet of office space located at 500
Plaza Drive, Secaucus, New Jersey (the "Plaza Drive Space") pursuant to the
terms of a lease agreement (the "Plaza Drive Lease"), effective as of March 12,
2009, between TCP Services and 500 Plaza Drive Corp. (the
"Landlord"). The Company plans to move its corporate headquarters to
the Plaza Drive Space in the Fall of 2009.
The term of the Plaza Drive Lease
commences on June 1, 2009 and expires on May 31, 2029; provided, however, that
the Company has a one-time right, subject to the satisfaction of certain
conditions, including payment of a termination fee of $3,000,000, to terminate
the Plaza Drive Lease on June 1, 2024. The Company also has an option
to extend the term of the Plaza Drive Lease for one period of five years
following the expiration of the initial term with a rent equal to the then-fair
market value.
Under the Plaza Drive Lease, the
Company is obligated to pay in equal monthly installments a fixed rent at the
annual rate of: (i) approximately $3,299,423 for the period from June 1, 2009
through May 31, 20014; (ii) $3,539,381 for the period from June 1, 2014 until
May 31, 2019; (iii) $3,719,349 for the period from June 1, 2019 until May 31,
2024; and (iv) $4,019,297 from June 1, 2024 until May 31, 2029.
The
Company has agreed to unconditionally and absolutely guarantee (the "Guaranty")
the payment of the rent, additional charges and any other moneys due or which
may become due pursuant to the terms of the Plaza Drive Lease, and the due and
punctual performance and observance by TCP Services of all the terms, covenants
and conditions of the Plaza Drive Lease. In order to permit the
Company to enter into the Guaranty and to permit TCP Services to enter into the
Plaza Drive Lease and the Termination Agreements (as defined in Item 1.02
below), each of (i) the Credit Agreement, dated as of July 31, 2009, among the
Company and TCP Services, as borrowers, and The Children’s Place (Virginia),
LLC, The Children’s Place Canada Holdings, Inc., thechildrensplace.com, inc. and
Twin Brook Insurance Company, Inc., as guarantors, on the one hand, and Wells
Fargo Retail Finance, LLC, as administrative agent, collateral agent and swing
line lender, and the lenders named therein, on the other hand, and the Note
Purchase Agreement, dated as of July 31, 2008, among the Company, as borrower,
and TCP Services, The Children’s Place (Virginia), LLC, The Children’s Place
Canada Holdings, Inc., thechildrensplace.com, inc. and Twin Brook Insurance
Company, Inc., as the guarantors, on the one hand, and Sankaty Advisors, LLC, as
collateral agent, Crystal Capital Fund Management, L.P., as syndication agent,
and the note purchasers named therein, on the other hand, was amended
(collectively, the "Amendments").
The
description of each of the Plaza Drive Lease, the Guaranty and the Amendments
set forth herein does not purport to be complete and is qualified in its
entirety by reference to the full text of thereof, a copy of which will be filed
as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year
ended January 31, 2009. A copy of the press release pursuant to which
the Company announced its entrance into the Plaza Drive Lease and plans to move
its corporate headquarters to the Plaza Drive Space is being furnished as
Exhibit 99.1 to this Current Report on Form 8-K.
Item
1.02 Termination of a Material
Definitive Agreement.
In connection with the Company's plans
to move its corporate headquarters to the Plaza Drive Space, as discussed in
Item 1.01 above, (i) TCP Services and Hartz Mountain Metropolitan, an affiliate
of the Landlord ("Hartz Metropolitan"), terminated the Agreement of Lease, dated
May 3, 2006, as amended, modified and supplemented (the "Emerson Lane Lease"),
relating to general office, showroom and ancillary spaces located at 2 Emerson
Lane, Secaucus, New Jersey, pursuant to the terms of a Lease Termination
Agreement (the "Emerson Lane Termination Agreement"), effective as of March 12,
2009; and (ii) TCP Services and Hartz Mountain Associates, an
affiliate of the Landlord ("Hartz Associates"), terminated the Agreement of
Lease, dated June 30, 1998, as amended, modified and supplemented (the "Secaucus
Road Lease"), relating to office and warehouse space, including the Company's
corporate headquarters, located at 915 Secaucus Road, Secaucus, New Jersey,
pursuant to a Lease Termination Agreement (the "Secaucus Road Termination
Agreement" and together with the Emerson Lane Termination Agreement, the
"Termination Agreements"), effective as of March 12, 2009.
Pursuant to the Emerson Lane
Termination Agreement, the Company and Hartz Metropolitan have agreed to
terminate the Emerson Lane Lease as of May 31, 2009. In connection
with the execution and delivery of the Emerson Lane Termination Agreement, the
Company has agreed to pay Hartz Metropolitan $650,000, as an additional charge
under the lease, representing the balance due to Hartz Metropolitan in
connection with the completion of the construction of parking
garage. In consideration for the termination of the Emerson Road
Lease, the Company has agreed to pay Hartz Metropolitan a termination fee in the
amount of $2,250,000, $1,250,000 of which was payable upon execution and
delivery of the Emerson Lane Termination Agreement and the remaining 1,000,000
of which is payable on or before January 10, 2010. As a security for
the payment of the installment due on or before January 10, 2010, the Company is
required to deliver to Hartz Metropolitan a letter of credit in the amount of
$1,000,000, pending payment of such installment.
Pursuant to the Secaucus Road
Termination Agreement, the Company and Hartz Associates have agreed to terminate
the Secaucus Road Lease as of Janaury 31, 2010; provided, however, that the
Company shall not be obligated to pay the fixed rent thereunder from February 1,
2009 through the remainder of the term for so long as the Company is not in
default under the Plaza Drive Lease. In consideration for the
termination of the Secaucus Road Lease, the Company has agreed to pay Hartz
Associates a termination fee in the amount of $3,500,000, 50% of which was
payable upon execution and delivery of the Secaucus Road Termination Agreement
and the remaining 50% of which is payable three months from the date
thereof.
A copy of the press release pursuant to
which the Company announced the termination of the Emerson Lane Lease and the
Secaucus Road Lease is being furnished as Exhibit 99.1 to this Current Report on
Form 8-K.
Item
2.02 Results of Operations and Financial
Condition
On March 19, 2009, the Company issued a
press release containing results for the Company's fourth quarter and fiscal
year ended January 31, 2009. A copy of the press release is being
furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this report is being
furnished pursuant to Item 2.02 of Form 8-K, insofar as it discloses historical
information regarding the Company's results of operations and financial
condition as of and for the fourth quarter and fiscal year ended January 31,
2009. In accordance with General Instructions B.2 of Form 8-K, the
information in this Current Report on Form 8-K, including Exhibit 99.1, shall
not be deemed “filed” for the purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liability of that section,
nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, except as shall be expressly set forth by
specific reference in such a filing.
Item
2.03 Creation of a Direct Financial Obligation or
an Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
Reference is made to the description of
the Plaza Drive Lease under Item 1.01 of this Current Report on Form
8-K.
Item
9.01 Financial Statement and
Exhibits.
|
(d)
|
Exhibits | |
|
Exhibit 99.1
|
Press
release, dated March 19, 2009 (Exhibit 99.1 is furnished as part of this
Current Report on Form
8-K).
|
Forward Looking
Statements
This Current Report on Form 8-K,
including Exhibit 99.1, contains forward-looking statements made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements typically are identified by use of
terms such as “may,” “will,” “should,” “plan,” “expect,” “anticipate,”
“estimate” and similar words, although some forward-looking statements are
expressed differently. Forward-looking statements represent our
management’s judgment regarding future events. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, the Company can give no assurance that such expectations will prove
to be correct. All statements other than statements of historical
fact included in this Current Report on Form 8-K are forward-looking
statements. The Company cannot guarantee the accuracy of the
forward-looking statements, and you should be aware that the Company’s actual
results could differ materially from those contained in the forward-looking
statements due to a number of factors, including the statements under the
heading “Risk Factors” contained in the Company’s filings with the Securities
and Exchange Commission.
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. | |||
|
Date: March
19, 2009
|
By:
|
/s/ Susan J. Riley | |
| Name: Susan J. Riley | |||
|
Title: Executive
Vice President, Finance and Administration
|
|||
FOR IMMEDIATE
RELEASE
THE
CHILDREN’S PLACE RETAIL STORES, INC. REPORTS
FOURTH
QUARTER AND FISCAL YEAR 2008 FINANCIAL RESULTS
Secaucus, New Jersey – March 19, 2009
– The Children’s Place Retail Stores, Inc. (Nasdaq: PLCE) today reported financial
results for the fourth quarter and fiscal year 2008. Results from continuing
operations for the fourth quarter and fiscal year periods ended January 31, 2009
and February 2, 2008 are based on The Children’s Place business only. The Disney
Store North America (“DSNA”) business has been classified as a discontinued
operation in accordance with generally accepted accounting principles (“GAAP”)
reflecting the Company’s exit of the business during fiscal year
2008.
Fourth
Quarter
|
|
·
|
Net
sales from continuing operations for the fourth quarter of 2008 were
$441.5 million, slightly below the fourth quarter 2007 net sales of $443.3
million.
|
|
|
·
|
Comparable
store sales decreased 5% in the fourth quarter of 2008 on top of a 7%
increase for the same period last
year.
|
|
|
·
|
Income
from continuing operations after tax was $23.3 million, or $0.79 per
share, in the fourth quarter of 2008, compared to a loss of $4.2 million,
or $0.15 per share, in the fourth quarter of 2007. The Company’s fourth
quarter income from continuing operations included several items which the
Company deems to be unusual or one-time in nature,
including:
|
|
|
·
|
In
the fourth quarter of 2008, an asset impairment charge of $4.9 million,
pre-tax, for underperforming stores that have been open for less than two
years; income of $0.5 million, pre-tax, from recovery of legal fees;
income of $0.4 million, pre-tax, from transition services provided to the
acquirer of the DSNA business; and a one-time benefit of $4.5 million from
the resolution of a state tax
issue.
|
|
|
·
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In
the fourth quarter of 2007, $14.8 million in impairments and $5.9 million
in lease exit costs, both pre-tax, related to the decision not to move
forward with a building the Company had planned to use as its corporate
headquarters; professional and legal fees of $4.5 million, pre-tax,
associated with the Company’s 2006 stock option investigation, related
restatements and fees for the review of strategic alternatives; stock
option tolling expense of $0.9 million, pre-tax; executive severance of
$0.7 million, pre-tax; $6.1 million in tax provisions related to the
Company’s decision to repatriate a portion of the retained earnings of one
of its overseas subsidiaries; and a valuation allowance against deferred
tax assets of a foreign subsidiary in the amount of $2.2
million.
|
|
|
·
|
Excluding
the unusual or one-time items mentioned above from the fourth quarters of
both years, adjusted income from continuing operations after tax was $21.3
million, or $0.72 per share, in the fourth quarter of 2008, compared to
$19.4 million, or $0.67 per share, in the fourth quarter of 2007. The
fourth quarter income from continuing operations excluding these items is
a non-GAAP measure. The Company believes the excluded items are not
indicative of the performance of its core business and that by providing
this supplemental disclosure to investors it will facilitate comparisons
of its past and present performance. A reconciliation of income
from continuing operations as reported is included in this press release
in Table 3.
|
-more-
1
PLCE
– Fourth Quarter and Fiscal Year 2008 Financial Results
Page
2
Fourth Quarter
(cont’d)
|
|
·
|
Net
income, including the impact of discontinued operations, was $38.8 million
in the fourth quarter of 2008, or $1.31 per share, compared to a loss of
$58.5 million, or $2.01 per share, for the same period last
year.
|
|
|
·
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During
the fourth quarter of 2008, the Company opened four stores and closed
seven.
|
Fiscal
Year
|
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·
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Net
sales from continuing operations for fiscal year 2008 increased 7% to
$1,630.3 million, compared to $1,520.3 million in
2007.
|
|
|
·
|
Comparable
store sales increased 2% for fiscal year 2008 on top of a 3% increase the
prior year.
|
|
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·
|
Income from continuing operations
after tax was $73.9 million, or $2.50 per share, for fiscal year 2008,
compared to $10.0 million, or $0.34 per share, last
year.
|
|
|
·
|
Excluding
the unusual or one-time items from both years, income from continuing
operations after tax was $66.0 million, or $2.23 per share, for fiscal
year 2008, compared to $41.4 million, or $1.40 per share, last year. As
previously noted, this is a non-GAAP measure which the Company is
providing as a supplemental disclosure. A reconciliation of income from
continuing operations as reported is included in Table
3.
|
|
|
·
|
Net
income, including the impact of discontinued operations, was $82.4
million, or $2.79 per share, for fiscal year 2008, compared to a loss of
$59.6 million, or $2.01 per share, last
year.
|
|
|
·
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During
fiscal year 2008, the Company opened 26 stores and closed
13.
|
Chuck
Crovitz, Interim Chief Executive Officer of The Children’s Place Retail Stores,
Inc., commented, “We feel very good about our accomplishments in 2008, a tough
year for retailers. We grew income from continuing operations by almost 60% to
$2.23 per diluted share, excluding unusual or one-time items. At the same time,
we gained market share, strengthened our balance sheet, and identified
additional efficiencies and expense savings to position the Company more
strongly for 2009. While we recognize that our business is not immune to the
current economic downturn, we remain fully committed to restoring the Company to
its historical levels of profitability over the next few years once the economy
stabilizes.”
During
March 2009, the Company entered into a transaction with the owner of the
Company’s corporate headquarters property and a second property at 2 Emerson
Lane in Secaucus, NJ, which the Company leased in 2006 and originally planned to
use as a new headquarters. Under the terms of the transaction, the Company will
make a cash payment of $6.4 million to the property owner to be relieved of its
lease obligations for both properties. The Company has entered into a new lease
for another office space within a mile of its existing location and intends to
relocate its headquarters in the Fall of 2009. The Company expects to incur
one-time capital expenditures of approximately $17 million to build out the new
facilities. Leases for three additional auxiliary offices are expiring in 2009,
and employees based in those leased facilities will also relocate to the
Company’s new headquarters location.
Outlook
The
Company will not be providing EPS guidance at this time, but will provide its
outlook for certain metrics on its conference call at 10:00 a.m. Eastern
Time.
-more-
2
PLCE
– Fourth Quarter and Fiscal Year 2008 Financial Results
Page
3
Conference Call
Information
The
Children’s Place will host a conference call to discuss its fourth quarter and
fiscal year 2008 results today at 10:00 a.m. Eastern Time. Interested
parties are invited to listen to the call by dialing 1-800-862-9098 and
providing the Conference ID, 7PLCE. 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 March 26, 2009. To access the replay,
dial 1-800-374-0328, or you may listen to the audio archive on the Company’s
website.
About The Children’s Place
Retail Stores, Inc.
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” brand name. As of February 28, 2009, the Company
owned and operated 917 stores and an online store at www.childrensplace.com.
This
press release (and above referenced call) may contain certain forward-looking
statements regarding future circumstances, including statements relating to the
Company’s plans to move its corporate headquarters and build-out the new
facilities. 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. Some of these risks and uncertainties are described in
the Company's filings with the Securities and Exchange Commission, including in
the “Risk Factors” section of its report on Form 10-K. The following risks and
uncertainties could cause actual results, events and performance to differ
materially: the risk that the Company will be unsuccessful in gauging fashion
trends and changing consumer preferences, the risk resulting from the highly
competitive nature of the Company’s business and its dependence on consumer
spending patterns, which may be affected by the downturn in the economy, and
risks and uncertainties relating to the Company’s strategic
review. 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 they were made. 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. |
|
|
Susan Riley, EVP, Finance & Administration, (201) 558-2400 |
| Jane Singer, VP, Investor Relations, (201) 453-6955 |
(Tables
Follow)
3
Table
1
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share amounts)
(Unaudited)
|
Fourth Quarter Ended
|
Fiscal Year Ended
|
|||||||||||||||
|
Jan 31, 2009
|
Feb 2, 2008
|
Jan 31, 2009
|
Feb 2, 2008
|
|||||||||||||
|
Net
sales
|
$ | 441,459 | $ | 443,264 | $ | 1,630,323 | $ | 1,520,329 | ||||||||
|
Cost
of sales
|
265,671 | 264,861 | 958,510 | 924,187 | ||||||||||||
|
Gross
profit
|
175,788 | 178,403 | 671,813 | 596,142 | ||||||||||||
|
Selling,
general and administrative expenses
|
119,561 | 131,144 | 471,302 | 479,142 | ||||||||||||
|
Asset
impairment charge
|
5,410 | 14,983 | 6,491 | 16,565 | ||||||||||||
|
Other
costs
|
35 | 5,870 | 213 | 5,870 | ||||||||||||
|
Depreciation
and amortization
|
18,258 | 18,512 | 71,410 | 65,326 | ||||||||||||
|
Income
from continuing operations before interest and taxes
|
32,524 | 7,894 | 122,397 | 29,239 | ||||||||||||
|
Interest
(expense), net
|
(2,136 | ) | (998 | ) | (4,939 | ) | (366 | ) | ||||||||
|
Income
from continuing operations before income taxes
|
30,388 | 6,896 | 117,458 | 28,873 | ||||||||||||
|
Provision
for income taxes
|
7,057 | 11,124 | 43,523 | 18,913 | ||||||||||||
|
Income
(Loss) from continuing operations net of income taxes
|
23,331 | (4,228 | ) | 73,935 | 9,960 | |||||||||||
|
Income
(Loss) from discontinued operations net of income taxes
|
15,453 | (54,265 | ) | 8,435 | (69,527 | ) | ||||||||||
|
Net
income (loss)
|
$ | 38,784 | $ | (58,493 | ) | $ | 82,370 | $ | (59,567 | ) | ||||||
|
Basic
income (loss) from continuing operations per common share
|
$ | 0.79 | $ | (0.15 | ) | $ | 2.52 | $ | 0.34 | |||||||
|
Income
(Loss) from discontinued operations per common share
|
0.53 | (1.86 | ) | 0.29 | (2.39 | ) | ||||||||||
|
Basic
net income (loss) per common share
|
$ | 1.32 | $ | (2.01 | ) | $ | 2.81 | $ | (2.05 | ) | ||||||
|
Basic
weighted average common shares outstanding
|
29,428 | 29,107 | 29,307 | 29,090 | ||||||||||||
|
Diluted
income (loss) from continuing operations per common share
|
$ | 0.79 | $ | (0.15 | ) | $ | 2.50 | $ | 0.34 | |||||||
|
Income
(Loss) from discontinued operations per common share
|
0.52 | (1.86 | ) | 0.29 | (2.35 | ) | ||||||||||
|
Diluted
net income (loss) per common share
|
$ | 1.31 | $ | (2.01 | ) | $ | 2.79 | $ | (2.01 | ) | ||||||
|
Diluted
weighted average common shares and common shares equivalents
outstanding
|
29,575 | 29,107 | 29,548 | 29,648 | ||||||||||||
|
Note: All
periods presented above reflect the exit of the DSNA business, which has
been classified as a discontinued operation in accordance with
GAAP. Continuing operations, as presented above, includes the
operations of The Children’s Place business only.
|
||||||||||||||||
4
Table
2
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
|
January 31, 2009
|
February 2, 2008
|
|||||||
|
Current
assets:
|
||||||||
|
Cash
and investments
|
$ | 226,206 | $ | 81,626 | ||||
|
Accounts
receivable
|
19,639 | 41,143 | ||||||
|
Inventories
|
211,227 | 196,606 | ||||||
|
Other
current assets
|
62,518 | 92,910 | ||||||
|
Current
assets held for sale
|
-- | 98,591 | ||||||
|
Total
current assets
|
519,590 | 510,876 | ||||||
|
Property
and equipment, net
|
318,116 | 354,141 | ||||||
|
Other
assets, net
|
102,051 | 128,357 | ||||||
|
Non-current
assets held for sale
|
-- | 4,163 | ||||||
|
Total
assets
|
$ | 939,757 | $ | 997,537 | ||||
|
Current
liabilities:
|
||||||||
|
Revolving
credit facility
|
$ | -- | $ | 88,976 | ||||
|
Short
term portion of term loan
|
30,000 | -- | ||||||
|
Accounts
payable
|
73,333 | 80,807 | ||||||
|
Accrued
expenses and other current liabilities
|
103,662 | 140,712 | ||||||
|
Total
current liabilities
|
206,995 | 310,495 | ||||||
|
Long
term portion of term loan
|
55,000 | -- | ||||||
|
Other
liabilities
|
129,883 | 214,809 | ||||||
|
Total
liabilities
|
391,878 | 525,304 | ||||||
|
Stockholders’
equity
|
547,879 | 472,233 | ||||||
|
Total
liabilities and stockholders’ equity
|
$ | 939,757 | $ | 997,537 | ||||
Note: “Assets held for sale” on the
February 2, 2008 balance sheet reflect the assets sold to an affiliate of The
Walt Disney Company. The remaining assets and liabilities of the Disney
Store business are reflected in their respective balance sheet category on the
February 2, 2008 balance sheet.
5
Table 3
THE
CHILDREN’S PLACE RETAIL STORES, INC.
RECONCILIATION
OF NON-GAAP FINANCIAL INFORMATION TO GAAP
(In
millions, except per share amounts)
(Unaudited)
|
Fourth Quarter Ended
|
Fiscal Year Ended
|
|||||||||||||||
|
Jan. 31, 2009
|
Feb. 2, 2008
|
Jan. 31, 2009
|
Feb. 2, 2008
|
|||||||||||||
|
Income
(Loss) from continuing operations net of income taxes
|
$ | 23.3 | $ | (4.2 | ) | $ | 73.9 | $ | 10.0 | |||||||
|
Significant
one-time items pre-tax:
|
||||||||||||||||
|
Asset
impairment charge
|
4.9 | 14.8 | 4.9 | 14.8 | ||||||||||||
|
Lease
exit costs
|
-- | 5.9 | 0.2 | 5.9 | ||||||||||||
|
Sale
of store lease (income)
|
-- | -- | (2.3 | ) | -- | |||||||||||
|
Tolling
of stock options
|
-- | 0.9 | -- | 3.0 | ||||||||||||
|
Severance
expense for sr. executives
|
-- | 0.7 | -- | 4.7 | ||||||||||||
|
Professional
fees (income recovery)
for
stock option/special
investigation
and strategic
alternatives
review
|
(0.5 | ) | 4.5 | 3.1 | 10.2 | |||||||||||
|
Net
transition services (income)
|
(0.4 | ) | -- | (11.6 | ) | -- | ||||||||||
|
Aggregate
(income) expense from
significant
items
|
4.0 | 26.8 | (5.7 | ) | 38.6 | |||||||||||
|
Less
income tax provision for
significant
items
|
(1.6 | ) | (11.5 | ) | 2.3 | (15.5 | ) | |||||||||
|
One-time
tax (credit) resulting from
resolution
of state tax issue
|
(4.5 | ) | -- | (4.5 | ) | -- | ||||||||||
|
Tax
provision related to Company’s
decision
not to permanently reinvest
in
certain foreign earnings
|
-- | 6.1 | -- | 6.1 | ||||||||||||
|
Valuation
allowance against foreign
subsidiary
deferred tax assets
|
-- | 2.2 | -- | 2.2 | ||||||||||||
|
Adjusted
(income) expense from
significant
items after taxes
|
2.0 | * | 23.6 | ( 7.9 | ) | 31.4 | ||||||||||
|
Adjusted
income from continuing operations net of income taxes
|
$ | 21.3 | $ | 19.4 | $ | 66.0 | $ | 41.4 | ||||||||
|
GAAP
income (loss) from continuing operations per diluted share
|
$ | 0.79 | $ | (0.15 | ) | $ | 2.50 | $ | 0.34 | |||||||
|
Adjusted
income from continuing operations per diluted share
|
$ | 0.72 | $ | 0.67 | $ | 2.23 | $ | 1.40 | ||||||||
|
*Does
not add due to rounding.
|
||||||||||||||||
###
6