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): May 21, 2009
THE
CHILDREN’S PLACE RETAIL STORES, INC.
(Exact
Name of Registrants as Specified in Their Charters)
Delaware
(State
or Other Jurisdiction of Incorporation)
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0-23071
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31-1241495
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|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
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915
Secaucus Road, Secaucus, New Jersey
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07094
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(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
2.02 Results of Operations and Financial Condition
On May 21, 2009, The Children’s Place
Retail Stores, Inc. (the “Company”) issued a press release containing results
for the Company's first quarter ended May 2, 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 first quarter ended May
2, 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.
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.
Item
9.01 Financial
Statement and Exhibits.
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(d)
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Exhibits
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Exhibit
99.1
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Press
release, dated May 21, 2009 (Exhibit 99.1 is furnished as part of this
Current Report on Form 8-K).
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2
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.
| Date: May 21, 2009 | THE CHILDREN’S PLACE RETAIL STORES, INC. | ||
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By:
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/s/ Susan J. Riley | |
| Name: Susan J. Riley | |||
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Title: Executive
Vice President, Finance and Administration
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|||
3
FOR IMMEDIATE
RELEASE
THE
CHILDREN’S PLACE RETAIL STORES, INC. REPORTS
FIRST
QUARTER 2009 FINANCIAL RESULTS
Secaucus, New Jersey – May 21, 2009 –
The Children’s Place Retail Stores, Inc. (Nasdaq: PLCE) today reported financial
results for the first quarter of 2009. Results from continuing operations for
the first quarters ended May 2, 2009 and May 3, 2008 are based on The Children’s
Place business only. The Disney Store North America (“DSNA”) business has been
classified as discontinued operations in accordance with generally accepted
accounting principles (“GAAP”) reflecting the Company’s decision to exit the
business.
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·
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Net
sales from continuing operations for the first quarter of 2009 were $401.9
million, slightly above the previous year’s first quarter net sales of
$400.2 million.
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·
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Comparable
retail sales, which include online sales, increased 1% in the first
quarter of 2009, on top of a 6% increase during the same period last
year.
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·
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Income
from continuing operations after tax was $23.7 million, or $0.80 per
diluted share, in the first quarter of 2009, compared to $19.4 million, or
$0.66 per share, in the first quarter of 2008. The Company’s first quarter
income from continuing operations included several items which the Company
deems to be unusual or one-time in nature,
including:
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·
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In
the first quarter of 2009, restructuring costs of $2.6 million, pre-tax,
associated with the implementation of the cost-control initiatives
announced in February; the write-off of deferred financing fees of $0.9
million, pre-tax, related to the prepayment of a portion of the term loan;
an asset impairment charge of $0.8 million, pre-tax, for an
underperforming store that has been open for less than two years; and a
one-time tax benefit of $4.5 million from the settlement of an IRS income
tax audit.
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·
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In
the first quarter of 2008, restructuring costs of $1.3 million, pre-tax,
and professional fees of $0.8 million, pre-tax, related to the Company’s
review of strategic alternatives.
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·
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Excluding
the unusual or one-time items mentioned above from the first quarters of
both years, adjusted income from continuing operations after tax was $21.8
million, or $0.74 per diluted share, in the first quarter of 2009,
compared to $20.7 million, or $0.71 per diluted share, in the first
quarter of 2008. The first 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.
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·
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Net
income, including the impact of discontinued operations, was $23.5 million
in the first quarter of 2009, or $0.79 per diluted share, compared to net
income of $19.5 million, or $0.67 per diluted share, for the same period
last year.
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·
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During
the first quarter of 2009, the Company opened six stores and closed
one.
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PLCE
– First Quarter 2009 Financial Results
Page
2
“We are
pleased that the actions taken during the past year to strengthen our business
and put the Company on more stable footing enabled us to deliver a solid
performance in the first quarter, particularly in light of the market volatility
and negative industry trends,” commented Chuck Crovitz, interim Chief Executive
Officer of The Children’s Place Retail Stores, Inc. “Comparable retail sales
increased as our trend-right fashion at great value prices resonated well with
customers. In addition, we made significant progress in our expense management
and cost containment efforts, resulting in solid earnings growth for the
quarter. We believe the Company is on the right path to achieve its longer-term
goals.”
Conference
Call Information
The
Children’s Place will host a conference call to discuss its first quarter
results today at 10:00 a.m. Eastern Time. The call will be broadcast live and
can be accessed via the Company’s web site, www.childrensplace.com.
A replay of the call will be available through Thursday, May 28, 2009 and can be
accessed through the Company’s web site or by dialing (800)
839-5685.
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 May 2, 2009, the Company owned and operated 922 The
Children’s Place stores and an online store at www.childrensplace.com.
This
press release may contain certain forward-looking statements regarding future
circumstances, including statements relating to the Company’s longer-term goals.
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 annual
report on Form 10-K for the fiscal year ended January 31, 2009. Included among
the risks and uncertainties that could cause actual results, events and
performance to differ materially are the risk that the Company will be
unsuccessful in gauging fashion trends and changing consumer preferences, and
the risks 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. Readers 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.
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CONTACT:
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The
Children’s Place Retail Stores,
Inc.
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Susan
Riley, EVP, Finance & Administration, (201) 558-2400
Jane
Singer, VP, Investor Relations, (201) 453-6955
(Tables Follow)
Table
1
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share amounts)
(Unaudited)
|
First Quarter Ended
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||||||||
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May 2, 2009
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May 3, 2008
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|||||||
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Net
sales
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$ | 401,901 | $ | 400,212 | ||||
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Cost
of sales
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235,374 | 229,120 | ||||||
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Gross
profit
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166,527 | 171,092 | ||||||
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Selling,
general and administrative expenses
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111,893 | 119,410 | ||||||
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Asset
impairment charge
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1,099 | -- | ||||||
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Depreciation
and amortization
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17,524 | 17,652 | ||||||
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Income
from continuing operations before interest and taxes
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36,011 | 34,030 | ||||||
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Interest
(expense), net
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(3,268 | ) | (493 | ) | ||||
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Income
from continuing operations before income taxes
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32,743 | 33,537 | ||||||
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Provision
for income taxes
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9,002 | 14,117 | ||||||
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Income
from continuing operations net of income taxes
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23,741 | 19,420 | ||||||
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Income
(Loss) from discontinued operations net of income taxes
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(229 | ) | 98 | |||||
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Net
income
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$ | 23,512 | $ | 19,518 | ||||
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Basic
income from continuing operations per common share
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$ | 0.81 | $ | 0.67 | ||||
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Income
(Loss) from discontinued operations per common share
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(0.01 | ) | 0.00 | |||||
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Basic
net income per common share
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$ | 0.80 | $ | 0.67 | ||||
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Basic
weighted average common shares outstanding
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29,475 | 29,182 | ||||||
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Diluted
income from continuing operations per common share
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$ | 0.80 | $ | 0.66 | ||||
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Income
from discontinued operations per common share
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(0.01 | ) | 0.00 | |||||
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Diluted
net income per common share
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$ | 0.79 | $ | 0.67 | ||||
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Diluted
weighted average common shares and common shares equivalents
outstanding
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29,605 | 29,275 | ||||||
Note: Amounts may not add due to
rounding.
3
Table
2
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
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May 2, 2009
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January 31, 2009
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May 3, 2008
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||||||||||
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Current
assets:
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||||||||||||
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Cash
and investments
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$ | 224,275 | $ | 226,206 | $ | 118,315 | ||||||
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Accounts
receivable
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19,299 | 19,639 | 34,661 | |||||||||
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Inventories
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181,984 | 211,227 | 179,065 | |||||||||
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Other
current assets
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84,880 | 62,518 | 92,406 | |||||||||
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Restricted
assets in bankruptcy estate of subsidiary
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-- | -- | 99,068 | |||||||||
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Total
current assets
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510,438 | 519,590 | 523,515 | |||||||||
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Property
and equipment, net
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314,331 | 318,116 | 338,450 | |||||||||
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Other
assets, net
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67,151 | 102,051 | 91,911 | |||||||||
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Total
assets
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$ | 891,920 | $ | 939,757 | $ | 953,876 | ||||||
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Current
liabilities:
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||||||||||||
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Revolving
credit facility
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$ | -- | $ | -- | $ | 27,936 | ||||||
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Short
term portion of term loan
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15,000 | 30,000 | -- | |||||||||
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Accounts
payable
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58,155 | 73,333 | 59,303 | |||||||||
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Accrued
expenses and other current liabilities
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98,811 | 103,662 | 109,273 | |||||||||
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Liabilities
subject to compromise
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-- | -- | 123,694 | |||||||||
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Total
current liabilities
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171,966 | 206,995 | 320,206 | |||||||||
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Long
term portion of term loan
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23,000 | 55,000 | -- | |||||||||
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Other
liabilities
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117,565 | 129,883 | 141,504 | |||||||||
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Total
liabilities
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312,531 | 391,878 | 461,710 | |||||||||
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Stockholders’
equity
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579,389 | 547,879 | 492,166 | |||||||||
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Total
liabilities and stockholders’ equity
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$ | 891,920 | $ | 939,757 | $ | 953,876 | ||||||
4
Table
3
THE
CHILDREN’S PLACE RETAIL STORES, INC.
RECONCILIATION
OF NON-GAAP FINANCIAL INFORMATION TO GAAP
(In
millions, except per share amounts)
(Unaudited)
|
First Quarter Ended
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||||||||
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May 2, 2009
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May 3, 2008
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|||||||
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Income
from continuing operations net of income taxes
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$ | 23.7 | $ | 19.4 | ||||
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Significant
one-time items pre-tax:
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||||||||
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Restructuring
costs
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2.6 | 1.3 | ||||||
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Deferred
financing fees write-off
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0.9 | -- | ||||||
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Impairment
charge
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0.8 | -- | ||||||
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Professional
fees
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-- | 0.8 | ||||||
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Aggregate
expense from significant one-time items
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4.3 | 2.1 | ||||||
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Less
income tax effect for significant one-time items
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(1.7 | ) | (0.8 | ) | ||||
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One-time
tax benefit resulting from resolution of an IRS income
tax audit
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(4.5 | ) | -- | |||||
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Adjusted
(gain) expense from significant one-time items after taxes
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(1.9 | ) |
1.3
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|||||
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Adjusted
income from continuing operations net of income taxes
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$ | 21.8 | $ | 20.7 | ||||
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GAAP
income from continuing operations per diluted share
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$ | 0.80 | $ | 0.66 | ||||
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Adjusted
income from continuing operations per diluted share
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$ | 0.74 | $ | 0.71 | ||||
###
5