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 10, 2010
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THE
CHILDREN’S PLACE RETAIL STORES, INC.
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(Exact
Name of Registrants as Specified in Their Charters)
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Delaware
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(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)
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(IRS
Employer Identification No.)
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500
Plaza Drive, 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
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(Registrant’s
Telephone Number, Including Area Code)
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915
Secaucus Road, Secaucus, New Jersey 07094
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(Former
Name or Former Address, if Changed Since Last
Report)
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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 March
10, 2010, The Children’s Place Retail Stores, Inc. (the “Company”) issued a
press release containing the Company's financial results for the fourth quarter
period and for the fiscal year ended January 30, 2010 and providing a
preliminary estimated range of earnings per diluted share for the first fiscal
quarter and fiscal year ending January 28, 2011. 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 fiscal quarter and fiscal year ended January
30, 2010. 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 (the “Exchange Act”), 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, or under the
Exchange Act 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
the judgment of Company management 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 March 10, 2010, issued by the Company (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: March 10,
2010
| THE CHILDREN’S PLACE RETAIL STORES, INC. | |||
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By:
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/s/ Susan J. Riley | |
| Name: | Susan J. Riley | ||
| Title: |
Executive Vice President,
Finance and
Administration
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||
3
Exhibit
99.1
FOR IMMEDIATE
RELEASE
THE
CHILDREN’S PLACE RETAIL STORES, INC. REPORTS
FOURTH
QUARTER AND FISCAL YEAR 2009 FINANCIAL RESULTS
Projects
Earnings Per Diluted Share for First Quarter and Fiscal Year 2010
Secaucus, New Jersey – March 10, 2010
– The Children’s Place Retail Stores, Inc. (Nasdaq: PLCE) today reported financial
results for the fourth quarter and fiscal year 2009. Results from continuing
operations for the fourth quarter and fiscal year periods ended January 30, 2010
and January 31, 2009 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.
Jane
Elfers, President and Chief Executive Officer of The Children’s Place Retail
Stores, Inc., commented, “The Children’s Place has a unique and enviable
position as the largest pure-play children’s specialty apparel retailer in North
America, and the brand brings an unparalleled combination of fashion, value and
convenience to the marketplace. I believe the opportunities to expand our
business and increase market share are clear.
“We
have been working to identify and begin implementation on five key growth
initiatives: (1) strengthening the merchandise; (2) accelerating new store
growth with a focus on value centers; (3) optimizing inventory management; (4)
sharpening our marketing message and (5) driving e-commerce growth,” Elfers
continued. “Over the past two years, the management team has done a great job of
strengthening operational efficiencies and managing expenses in a difficult
economic environment. This gives us a solid base upon which to build our
business going forward.”
Fourth Quarter Financial
Results
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·
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Net
sales from continuing operations for the fourth quarter of 2009 were
$462.8 million, an increase of 5% compared to $441.5 million for the
fourth quarter of 2008.
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·
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Comparable
retail sales were flat in the fourth quarter of 2009 compared to a 1%
increase in the fourth quarter of
2008.
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·
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Income
from continuing operations after tax was $34.2 million, or $1.23 per
diluted share, in the fourth quarter of 2009, compared to $23.3 million,
or $0.79 per diluted share, in the fourth quarter of
2008.
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·
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The
comparability of income from continuing operations between the fourth
quarter of 2009 and 2008 is affected by the following
transactions:
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·
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In
the fourth quarter of 2009, a tax benefit of $5.5 million in excess
foreign tax credits generated by the repatriation of cash and a benefit of
$0.3 million, pre-tax, resulting from an accrual reversal related to the
settlement of an IRS employment tax audit related to stock
options.
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·
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In
the fourth quarter of 2008, an asset impairment charge of $4.9 million,
pre-tax, for underperforming stores that had been open for less than two
years; income of $0.5 million, pre-tax, from the recovery of legal fees;
income of $0.4 million, pre-tax, from transition services provided to the
acquirer of the DSNA business; and a tax benefit of $4.5 million from the
resolution of a state tax issue.
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-more-
1
PLCE
– Fourth Quarter and Fiscal Year 2009 Financial Results
Page
2
Fourth Quarter Financial
Results (cont’d)
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·
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Excluding
these transactions that affect comparability, adjusted income from
continuing operations after tax was $28.5 million, or $1.03 per diluted
share, in the fourth quarter of 2009, compared to $21.3 million, or $0.72
per diluted share, in the fourth quarter of 2008. Adjusted income from
continuing operations is a non-GAAP measure. The Company believes the
excluded transactions 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 $34.1
million, or $1.23 per diluted share, in the fourth quarter of fiscal 2009,
compared to $38.8 million, or $1.31 per diluted share, for the fourth
quarter of fiscal 2008.
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·
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During
the fourth quarter of 2009, the Company opened four stores and closed
seven.
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Fiscal Year Financial
Results
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Net
sales from continuing operations for fiscal 2009 increased 1% to $1,643.6
million, compared to $1,630.3 million for fiscal
2008.
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·
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Comparable
retail sales for fiscal 2009 declined 2% following a 5% increase for
fiscal 2008.
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·
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Income from continuing operations
after tax was $88.8 million, or $3.09 per diluted share, for fiscal 2009,
compared to $73.9 million, or $2.50 per diluted share, for fiscal
2008.
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·
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Excluding
transactions affecting comparability between both years, adjusted income
from continuing operations after tax was $75.8 million, or $2.64 per
diluted share, for fiscal 2009, compared to $66.0 million, or $2.23 per
diluted share, for fiscal 2008. 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.
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·
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Net
income, including the impact of discontinued operations, was $88.4
million, or $3.08 per diluted share, for fiscal 2009, compared to $82.4
million, or $2.79 per diluted share, for fiscal
2008.
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·
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During
fiscal 2009, the Company opened 38 stores and closed
eight.
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Outlook
While
there is still uncertainty in the economic environment, the Company is
projecting that earnings per diluted share from continuing operations for fiscal
2010 will be between $2.90 and $3.10, assuming positive low-single digit
comparable retail sales. For the first quarter of fiscal 2010, the Company is
forecasting that earnings per diluted share from continuing operations will be
between $0.85 and $0.90, assuming flat comparable retail sales. Earnings
guidance assumes that currency exchange rates will remain where they are
today.
Conference Call
Information
The
Children’s Place will host a conference call to discuss its fourth quarter and
fiscal year 2009 results today at 10:00 a.m. Eastern Time. The call
will be broadcast live at http://investor.childrensplace.com.
An audio archive will be available approximately one hour after the conclusion
of the call.
-more-
2
PLCE
– Fourth Quarter and Fiscal Year 2009 Financial Results
Page
3
About The Children’s Place
Retail Stores, Inc.
The
Children’s Place Retail Stores, Inc. is a leading specialty retailer of
children’s apparel. The Company designs, contracts to manufacture and
sells high-quality, value-priced merchandise under the proprietary “The
Children’s Place” brand name. As of January 30, 2010, the Company
owned and operated 947 stores and an online store at www.childrensplace.com.
This
press release and above referenced conference call may contain certain
forward-looking statements regarding future circumstances, including statements
relating to our future operating plans and strategies, and forecasts regarding
earnings per diluted share from continuing operations. 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
(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.
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Contact:
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The Children’s Place Retail
Stores, Inc.
Susan Riley, EVP, Finance &
Administration,
(201) 558-2400
Jane Singer, VP,
Investor Relations, (201)
453-6955
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(Tables
Follow)
3
Table
1
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share amounts)
(Unaudited)
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Fourth Quarter
Ended
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Fiscal Fiscal Year
Ended
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|||||||||||||||
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Jan 30, 2010
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Jan 31, 2009
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Jan 30, 2010
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Jan 31, 2009
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|||||||||||||
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Net
sales
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$ | 462,835 | $ | 441,459 | $ | 1,643,587 | $ | 1,630,323 | ||||||||
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Cost
of sales
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276,987 | 265,671 | 984,086 | 958,510 | ||||||||||||
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Gross
profit
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185,848 | 175,788 | 659,501 | 671,813 | ||||||||||||
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Selling,
general and administrative expenses
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119,217 | 119,561 | 455,782 | 471,302 | ||||||||||||
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Asset
impairment charge
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479 | 5,410 | 2,200 | 6,491 | ||||||||||||
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Other
costs
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- | 35 | - | 213 | ||||||||||||
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Depreciation
and amortization
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18,189 | 18,258 | 71,447 | 71,410 | ||||||||||||
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Income
from continuing operations before interest and taxes
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47,963 | 32,524 | 130,072 | 122,397 | ||||||||||||
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Interest
(expense), net
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(481 | ) | (2,136 | ) | (5,731 | ) | (4,939 | ) | ||||||||
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Income
from continuing operations before income taxes
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47,482 | 30,388 | 124,341 | 117,458 | ||||||||||||
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Provision
for income taxes
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13,325 | 7,057 | 35,500 | 43,523 | ||||||||||||
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Income
from continuing operations net of income taxes
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34,157 | 23,331 | 88,841 | 73,935 | ||||||||||||
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Income
(loss) from discontinued operations net of income taxes
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(47 | ) | 15,453 | (487 | ) | 8,435 | ||||||||||
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Net
income
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$ | 34,110 | $ | 38,784 | $ | 88,354 | $ | 82,370 | ||||||||
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||||||||||||||||
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Basic
income from continuing operations per common share
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$ | 1.24 | $ | 0.79 | $ | 3.12 | $ | 2.52 | ||||||||
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Income
(loss) from discontinued operations per common share
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(0.00 | ) | 0.53 | (0.02 | ) | 0.29 | ||||||||||
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Basic
net income per common share
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$ | 1.24 | $ | 1.32 | $ | 3.10 | $ | 2.81 | ||||||||
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Basic
weighted average common shares outstanding
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27,436 | 29,428 | 28,463 | 29,307 | ||||||||||||
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||||||||||||||||
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Diluted
income from continuing operations per common share
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$ | 1.23 | $ | 0.79 | $ | 3.09 | $ | 2.50 | ||||||||
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Income
(loss) from discontinued operations per common share
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(0.00 | ) | 0.52 | (0.02 | ) | 0.29 | ||||||||||
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Diluted
net income per common share
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$ | 1.23 | $ | 1.31 | $ | 3.08 | $ | 2.79 | ||||||||
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Diluted
weighted average common shares and common shares equivalents
outstanding
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27,713 | 29,575 | 28,707 | 29,548 | ||||||||||||
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. Numbers may not add due to
rounding.
4
Table
2
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
|
January 30, 2010
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January 31, 2009
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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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$ | 170,492 | $ | 226,206 | ||||
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Accounts
receivable
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16,910 | 19,639 | ||||||
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Inventories
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206,227 | 211,227 | ||||||
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Other
current assets
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63,253 | 62,518 | ||||||
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Total
current assets
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456,882 | 519,590 | ||||||
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Property
and equipment, net
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312,801 | 318,116 | ||||||
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Other
assets, net
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84,377 | 102,051 | ||||||
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Total
assets
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$ | 854,060 | $ | 939,757 | ||||
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Current
liabilities:
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||||||||
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Revolving
credit facility
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$ | - | $ | - | ||||
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Short
term portion of term loan
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- | 30,000 | ||||||
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Accounts
payable
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55,547 | 73,333 | ||||||
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Accrued
expenses and other current liabilities
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89,969 | 103,662 | ||||||
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Total
current liabilities
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145,516 | 206,995 | ||||||
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Long
term portion of term loan
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- | 55,000 | ||||||
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Other
liabilities
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119,574 | 129,883 | ||||||
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Total
liabilities
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265,090 | 391,878 | ||||||
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Stockholders’
equity
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588,970 | 547,879 | ||||||
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Total
liabilities and stockholders’ equity
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$ | 854,060 | $ | 939,757 | ||||
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
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FFiscal Year
Ended
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|||||||||||||||
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Jan 30, 2010
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Jan 31, 2009
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Jan 30, 2010
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Jan 31, 2009
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Income
from continuing operations net of income taxes
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$ | 34.2 | $ | 23.3 | $ | 88.8 | $ | 73.9 | ||||||||
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Transactions
affecting comparability pre-tax:
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||||||||||||||||
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Gains:
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||||||||||||||||
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Favorable
settlement of IRS
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||||||||||||||||
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Employment
tax audit related to stock options
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(0.3 | ) | - | (5.0 | ) | - | ||||||||||
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Net
transition services income
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- | (0.4 | ) | - | (11.6 | ) | ||||||||||
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Sale
of store lease
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- | - | - | (2.3 | ) | |||||||||||
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Professional
fees (income recovery)
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- | (0.5 | ) | - | 3.1 | |||||||||||
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Expenses:
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||||||||||||||||
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Proxy
contest fees
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- | - | 2.0 | - | ||||||||||||
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Company
restructuring fees
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- | - | 2.9 | - | ||||||||||||
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Prepayment
of term loan expenses/deferred financing fees
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- | - | 2.4 | - | ||||||||||||
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Impairment
charge
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- | 4.9 | 0.8 | 5.1 | ||||||||||||
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Aggregate
(income) impact of transactions affecting comparability
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(0.3 | ) | 4.0 | 3.1 | (5.7 | ) | ||||||||||
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Income
tax effect of transactions affecting comparability
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0.1 | (1.6 | ) | (1.3 | ) | 2.3 | ||||||||||
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Excess
foreign tax credits from repatriation of cash
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(5.5 | ) | - | (10.3 | ) | - | ||||||||||
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Tax
benefit from resolution of IRS income tax audit
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- | - | (4.5 | ) | - | |||||||||||
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Tax
benefit from resolution of state tax
issue
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- | (4.5 | ) | - | (4.5 | ) | ||||||||||
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Adjusted
(gain) impact from transactions affecting comparability
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(5.7 | ) | (2.0 | ) | (13.0 | ) | (7.9 | ) | ||||||||
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Adjusted
income from continuing operations net of income taxes
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$ | 28.5 | $ | 21.3 | $ | 75.8 | $ | 66.0 | ||||||||
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GAAP
income from continuing operations per common share
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$ | 1.23 | $ | 0.79 | $ | 3.09 | $ | 2.50 | ||||||||
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Adjusted
income from continuing operations per common share
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$ | 1.03 | $ | 0.72 | $ | 2.64 | $ | 2.23 | ||||||||
Note:
Numbers may not add due to rounding
6