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 26, 2013
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.) |
| 500 Plaza Drive, Secaucus, New Jersey | 07094 |
| (Address of Principal Executive Offices) | (Zip Code) |
(201) 558-2400
(Registrant’s Telephone Number, Including Area Code)
(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 March 26, 2013, the Company issued a press release containing the Company's financial results for the fourth quarter of the fiscal year ended February 2, 2013 (“Fiscal 2012”) and for Fiscal 2012, and providing a preliminary estimated range of non-GAAP earnings per diluted share for the first quarter of the fiscal year ending February 1, 2014 (“Fiscal 2013”) and for Fiscal 2013. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The Company announced on February 26, 2013 that it was changing its accounting policy to report its inventory on the cost method instead of the retail method and that it will capitalize additional supply chain costs instead of reporting them as period expenses, all effective in the fourth quarter of Fiscal 2012.
The Company’s press release dated March 26, 2013 reports fourth quarter and Fiscal 2012 financial information, and financial information for the fourth quarter of the fiscal year ended January 28, 2012 (“Fiscal 2011”) and for Fiscal 2011, in all cases, under both the new and previous accounting policies. The Company’s March 26, 2013 press release also contains additional unaudited quarterly financial results for the quarterly periods in Fiscal 2011 and Fiscal 2012, and unaudited financial results for the fiscal years ended January 29, 2011, January 30, 2010 and January 31, 2009, in all cases, under the new accounting policy. 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 Current 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. In accordance with General Instruction B.2 of Form 8-K, such 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 (the “Exchange Act”), 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, or the Exchange Act except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statement and Exhibits.
| (d) | Exhibits | |
| Exhibit 99.1 | Press release, dated March 26, 2013, issued by the Company (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, including but not limited to statements relating to the Company’s positioning, and forecasts regarding store openings and earnings per diluted share from continuing operations. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. 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 and performance 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 28, 2012. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, 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 continued weakness in the economy or by other factors such as increases in the cost of gasoline and food, and the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, and the uncertainty of weather patterns. 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.
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 26, 2013 | ||
| THE CHILDREN’S PLACE RETAIL STORES, INC. | ||
| By: | /s/ Jane Elfers | |
| Name: | Jane Elfers | |
| Title: | President and Chief Executive Officer | |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
THE CHILDREN’S PLACE REPORTS FOURTH QUARTER AND FISCAL 2012 RESULTS
Issues Guidance for First Quarter and Fiscal 2013
Secaucus, New Jersey – March 26, 2013 – The Children’s Place Retail Stores, Inc. (Nasdaq: PLCE), the largest pure-play children’s specialty apparel retailer in North America, today announced financial results for the fourth quarter and fiscal 2012 periods ended February 2, 2013.
President and Chief Executive Officer Jane Elfers commented, “We continued to make significant progress during 2012 and had a strong finish to the year. We delivered record sales of $1.8 billion in fiscal 2012 and a 2% increase in comparable retail sales. Non-GAAP earnings per share increased 11% to $3.23. In addition, we generated $205 million in cash from operations during the year and returned approximately $89 million to shareholders through our share buyback program.
“For the fourth quarter, comparable retail sales increased 4.3%, non-GAAP operating income increased 65% and non-GAAP earnings increased 32% to $1.15 per diluted share,” Ms. Elfers said.
Net Income and EPS
The Company announced on February 26, 2013 that it was changing its accounting policy to report its inventory on the cost method instead of the retail inventory method and that it will capitalize additional supply chain costs instead of reporting them as period expenses, effective in the fourth quarter. The Company is reporting fourth quarter and fiscal 2012 results under both the new and previous accounting policies to facilitate comparisons between the two accounting methods. In this press release the term (i) “cost method” reflects the change in accounting principle to report inventory on the cost method and the capitalization of additional supply chain costs, (ii) “adjusted” refers to results in prior periods which have been adjusted to reflect the GAAP cost method, and (iii) “Non-GAAP” refers to results which exclude transactions which the Company believes are not indicative of the performance of its core business. The Company believes that by providing this supplemental disclosure to investors it will facilitate comparisons of its past and present performance. A reconciliation of net income and earnings per diluted share as reported is included in this press release in Table 3.
Under the cost method, the Company reported net income of $19.1 million and earnings per diluted share of $0.80 for the fourteen weeks ended February 2, 2013, compared to adjusted net income of $23.3 million and adjusted earnings per diluted share of $0.93 for the thirteen weeks ended January 28, 2012. For the fifty-three weeks ended February 2, 2013, the Company reported net income of $63.2 million and earnings per diluted share of $2.61, compared to adjusted net income of $74.3 million and adjusted earnings per diluted share of $2.90 for the 52-week period ended January 28, 2012.
-more-
| 1 |
PLCE – Fourth Quarter and Fiscal Year 2012 Financial Results
Page 2
Net Income and EPS – con’t
Under the retail method, the Company reported net income of $22.1 million and earnings per diluted share of $0.93 for the fourteen weeks ended February 2, 2013, compared to net income of $24.2 million and earnings per diluted share of $0.97 in the thirteen weeks ended January 28, 2012. For the fifty-three weeks ended February 2, 2013, the Company reported net income of $62.7 million and earnings per diluted share of $2.58, compared to net income of $77.2 million and earnings per diluted share of $3.01 for the fifty-two weeks ended January 28, 2012.
The results reported above include transactions that the Company believes are not indicative of the performance of its core business. The following table also shows Non-GAAP earnings per diluted share under the retail method excluding such transactions for the fiscal quarters and fiscal years ended February 2, 2013 and January 28, 2012.
| Fourth Quarter | Fiscal Year | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Earnings per diluted share under the cost method on a GAAP basis | $ | 0.80 | $ | 0.93 | $ | 2.61 | $ | 2.90 | ||||||||
| Impact of the change in method of accounting for inventory | $ | 0.13 | $ | 0.04 | $ | -0.03 | $ | 0.11 | ||||||||
| Earnings per diluted share under the retail method | $ | 0.93 | $ | 0.97 | $ | 2.58 | $ | 3.01 | ||||||||
| Add back: Accelerated depreciation for DC closures and remodels; restructuring and other costs | $ | 0.22 | $ | 0.03 | $ | 0.65 | $ | 0.03 | ||||||||
| Remove: Settlement of state tax audits; reversal of prior year's US tax accrual on foreign earnings | - | $ | -0.13 | - | $ | -0.12 | ||||||||||
| Non-GAAP earnings per diluted share under the retail method | $ | 1.15 | $ | 0.87 | $ | 3.23 | $ | 2.92 | ||||||||
2012 Results Reported under the Retail Method
Fourth Quarter 2012
| · | Net sales, which included $21.6 million of sales in the 53rd week, increased 11.3% to $509.2 million, compared to $457.5 million the prior year. |
| · | Comparable retail sales, which excluded the 53rd week, increased 4.3% compared to the prior year. |
| · | Gross profit increased 17.5% to $192.7 million, and increased 200 basis points to 37.8% of sales. |
| · | Selling, general and administrative expense increased 12.4% to $136.1 million, and deleveraged 20 basis points to 26.7% of sales. |
| · | Non-GAAP operating income increased 64.8% to $38.7 million, and increased 250 basis points to 7.6% of sales. |
| · | Non-GAAP net income was $27.3 million, a 24.8% increase compared to the prior year. |
| · | Non-GAAP EPS of $1.15 per diluted share compares to $0.87 last year, a 32.2% increase. |
Fiscal 2012 Results
| · | Net sales, which included the 53rd week, increased 5.5% to $1,809.5, compared to $1,715.9 million the prior year. |
| · | Comparable retail sales, which excluded the 53rd week, increased 2.0% compared to the prior year. |
| · | Gross profit increased 4.0% to $690.5 million, and deleveraged 50 basis points to 38.2% of sales. |
| · | Non-GAAP selling, general and administrative expense increased 6.2% to $507.0 million, and deleveraged 20 basis points to 28.0% of sales. |
-more-
| 2 |
PLCE – Fourth Quarter and Fiscal Year 2012 Financial Results
Page 3
2012 Results Reported Under the Retail Method – con’t
Fiscal 2012 Results – con’t
| · | Non-GAAP operating income increased 3.0% to $114.3 million, and deleveraged 20 basis points to 6.3% of sales. |
| · | Non-GAAP net income was $78.3 million, a 4.5% increase compared to prior year. |
| · | Non-GAAP EPS of $3.23 per diluted share compares to $2.92 last year, a 10.6% increase. |
Store Openings and Closures
The Company opened four stores and closed 11 during the fourth quarter of 2012. During fiscal 2012, the Company opened 64 stores and closed 18, ending the year with 1,095 stores.
Share Repurchase Program
During the fourth quarter of 2012, the Company repurchased 863 thousand shares for approximately $41.2 million. In fiscal 2012, the Company repurchased 1.8 million shares for approximately $88.9 million. At the end of fiscal 2012, $80.4 million of the $100 million share repurchase program authorized in November 2012 remained available for future share repurchases.
Outlook for 2013 under the Cost Method
With the unfavorable weather and weak macro-economic environment affecting consumer spending quarter-to-date, the Company is forecasting Non-GAAP earnings per diluted share will be between $0.60 and $0.65 for the first quarter of 2013. This compares to Non-GAAP adjusted earnings per diluted share of $1.14 in the first quarter of 2012. This guidance assumes negative high-single digit comparable retail sales for the quarter.
For fiscal 2013, the Company is projecting that Non-GAAP earnings per diluted share will be between $2.90 and $3.10. This compares to Non-GAAP adjusted earnings per diluted share of $3.25 in fiscal 2012. This guidance assumes negative low-single digit comparable retail sales for the year.
This earnings guidance assumes that currency exchange rates will remain where they are today. It does not include the impact of potential share repurchases.
Conference Call Information
The Children’s Place will host a conference call to discuss its fourth quarter and fiscal year 2012 results today at 8:30 a.m. Eastern Time. The call will be broadcast live at http://investor.childrensplace.com. An audio archive will be available on the Company’s website approximately one hour after the conclusion of the call.
About The Children’s Place Retail Stores, Inc.
The Children’s Place is the largest pure-play children’s specialty apparel retailer in North America. The Company designs, contracts to manufacture and sells fashionable, high-quality merchandise at value prices, primarily under the proprietary “The Children’s Place” brand name. As of February 2, 2013, the Company operated 1,095 stores and an online store at www.childrensplace.com.
-more-
| 3 |
PLCE – Fourth Quarter and Fiscal Year 2012 Financial Results
Page 4
Forward Looking Statements
This press release (and the above referenced call) may contain certain forward-looking statements regarding future circumstances, including statements relating to the Company’s positioning, and forecasts regarding store openings and earnings per diluted share. 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 and performance 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 28, 2012. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, 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 continued weakness in the economy or by other factors such as increases in the cost of gasoline and food, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, and the uncertainty of weather patterns. 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.
Contact: Jane Singer, Vice President, Investor Relations, (201) 453-6955
(Tables Follow)
| 4 |
Table 1
THE CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AT COST METHOD
(In thousands, except per share amounts)
(Unaudited)
| Fourth Quarter Ended | Fiscal Year Ended | |||||||||||||||
| February 2, | January 28, | February 2, | January 28, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (As adjusted) | (As adjusted) | |||||||||||||||
| Net sales | $ | 509,224 | $ | 457,463 | $ | 1,809,486 | $ | 1,715,862 | ||||||||
| Cost of sales | 320,667 | 294,843 | 1,118,046 | 1,056,213 | ||||||||||||
| Gross profit | 188,557 | 162,620 | 691,440 | 659,649 | ||||||||||||
| Selling, general and administrative expenses | 136,089 | 121,088 | 510,918 | 477,425 | ||||||||||||
| Asset impairment charges | 215 | 461 | 2,284 | 2,208 | ||||||||||||
| Other costs | 6,622 | - | 11,088 | - | ||||||||||||
| Depreciation and amortization | 19,712 | 19,851 | 77,435 | 74,573 | ||||||||||||
| Operating income | 25,919 | 21,220 | 89,715 | 105,443 | ||||||||||||
| Interest (expense), net | 84 | (35 | ) | (20 | ) | (690 | ) | |||||||||
| Income before taxes | 26,003 | 21,185 | 89,695 | 104,753 | ||||||||||||
| Provision for income taxes | 6,875 | (2,140 | ) | 26,452 | 30,408 | |||||||||||
| Net income | $ | 19,128 | $ | 23,325 | $ | 63,243 | $ | 74,345 | ||||||||
| Earnings per common share | ||||||||||||||||
| Basic | $ | 0.81 | $ | 0.94 | $ | 2.63 | $ | 2.92 | ||||||||
| Diluted | $ | 0.80 | $ | 0.93 | $ | 2.61 | $ | 2.90 | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 23,541 | 24,834 | 24,092 | 25,459 | ||||||||||||
| Diluted | 23,789 | 25,033 | 24,276 | 25,668 | ||||||||||||
| 5 |
Table 2
THE CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AT RETAIL METHOD
(In thousands, except per share amounts)
(Unaudited)
| Fourth Quarter Ended | Fiscal Year Ended | |||||||||||||||
| February 2, | January 28, | February 2, | January 28, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net sales | $ | 509,224 | $ | 457,463 | $ | 1,809,486 | $ | 1,715,862 | ||||||||
| Cost of sales | 316,533 | 293,502 | 1,119,025 | 1,051,649 | ||||||||||||
| Gross profit | 192,691 | 163,961 | 690,461 | 664,213 | ||||||||||||
| Selling, general and administrative expenses | 136,089 | 121,088 | 510,918 | 477,425 | ||||||||||||
| Asset impairment charges | 215 | 461 | 2,284 | 2,208 | ||||||||||||
| Other costs | 6,622 | - | 11,088 | - | ||||||||||||
| Depreciation and amortization | 19,712 | 19,851 | 77,435 | 74,573 | ||||||||||||
| Operating income | 30,053 | 22,561 | 88,736 | 110,007 | ||||||||||||
| Interest (expense), net | 84 | (35 | ) | (20 | ) | (690 | ) | |||||||||
| Income before taxes | 30,137 | 22,526 | 88,716 | 109,317 | ||||||||||||
| Provision for income taxes | 8,019 | (1,700 | ) | 25,971 | 32,092 | |||||||||||
| Net income | $ | 22,118 | $ | 24,226 | $ | 62,745 | $ | 77,225 | ||||||||
| Earnings per common share | ||||||||||||||||
| Basic | $ | 0.94 | $ | 0.98 | $ | 2.60 | $ | 3.03 | ||||||||
| Diluted | $ | 0.93 | $ | 0.97 | $ | 2.58 | $ | 3.01 | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 23,541 | 24,834 | 24,092 | 25,459 | ||||||||||||
| Diluted | 23,789 | 25,033 | 24,276 | 25,668 | ||||||||||||
| 6 |
Table 3
THE CHILDREN’S PLACE RETAIL STORES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO REPORTED AT RETAIL METHOD
(In thousands, except per share amounts)
(Unaudited)
| Fourth Quarter Ended | Fiscal Year Ended | |||||||||||||||
| February 2, | January 28, | February 2, | January 28, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net sales | $ | 509,224 | $ | 457,463 | $ | 1,809,486 | $ | 1,715,862 | ||||||||
| Cost of sales | 316,533 | 293,502 | 1,119,025 | 1,051,649 | ||||||||||||
| Gross profit | 192,691 | 163,961 | 690,461 | 664,213 | ||||||||||||
| Selling, general and administrative expenses | 136,089 | 121,088 | 510,918 | 477,425 | ||||||||||||
| Restructuring severance/miscellaneous costs | - | - | 2,854 | - | ||||||||||||
| Legal Settlement | - | - | 1,087 | - | ||||||||||||
| Non-GAAP Selling, general and administrative expenses | 136,089 | 121,088 | 506,977 | 477,425 | ||||||||||||
| Asset impairment charges | 215 | 461 | 2,284 | 2,208 | ||||||||||||
| Store Impairment due to early termination | - | - | 1,250 | - | ||||||||||||
| Non-GAAP Asset impairment charges | 215 | 461 | 1,034 | 2,208 | ||||||||||||
| Other costs | 6,622 | - | 11,088 | - | ||||||||||||
| DC exit costs | 6,622 | - | 11,088 | - | ||||||||||||
| Non-GAAP Other costs | - | - | - | - | ||||||||||||
| Depreciation and amortization | 19,712 | 19,851 | 77,435 | 74,573 | ||||||||||||
| DC exit costs and Canadian store remodels | 2,019 | 922 | 9,335 | 1,032 | ||||||||||||
| Non-GAAP Depreciation and amortization | 17,693 | 18,929 | 68,100 | 73,541 | ||||||||||||
| Operating income | 30,053 | 22,561 | 88,736 | 110,007 | ||||||||||||
| Non-GAAP Operating income | 38,694 | 23,483 | 114,350 | 111,039 | ||||||||||||
| Interest (expense), net | 84 | (35 | ) | (20 | ) | (690 | ) | |||||||||
| Income before taxes | 30,137 | 22,526 | 88,716 | 109,317 | ||||||||||||
| Non-GAAP Income before taxes | 38,778 | 23,448 | 114,330 | 110,349 | ||||||||||||
| Provision for income taxes | 8,019 | (1,700 | ) | 25,971 | 32,092 | |||||||||||
| Non-GAAP Provision for income taxes | 11,475 | 1,579 | 35,996 | 35,402 | ||||||||||||
| Net income | 22,118 | 24,226 | 62,745 | 77,225 | ||||||||||||
| Non-GAAP Net income | $ | 27,303 | $ | 21,869 | $ | 78,334 | $ | 74,947 | ||||||||
| Non-GAAP Earnings per common share | ||||||||||||||||
| Basic | $ | 1.16 | $ | 0.88 | $ | 3.25 | $ | 2.94 | ||||||||
| Diluted | $ | 1.15 | $ | 0.87 | $ | 3.23 | $ | 2.92 | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 23,541 | 24,834 | 24,092 | 25,459 | ||||||||||||
| Diluted | 23,789 | 25,033 | 24,276 | 25,668 | ||||||||||||
| 7 |
Table 4
THE CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AT COST METHOD
(In thousands, except per share amounts)
(Unaudited)
| Fiscal Year Ended | ||||||||||||||||||||
| February 2, | January 28, | January 29, | January 30, | January 31, | ||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||
| (As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | |||||||||||||||||
| Net sales | $ | 1,809,486 | $ | 1,715,862 | $ | 1,673,999 | $ | 1,643,587 | $ | 1,630,323 | ||||||||||
| Cost of sales | 1,118,046 | 1,056,213 | 1,013,878 | 991,393 | 954,227 | |||||||||||||||
| Gross profit | 691,440 | 659,649 | 660,121 | 652,194 | 676,096 | |||||||||||||||
| Selling, general and administrative expenses | 510,918 | 477,425 | 456,558 | 456,338 | 467,730 | |||||||||||||||
| Asset impairment charges | 2,284 | 2,208 | 2,713 | 2,200 | 6,491 | |||||||||||||||
| Other costs | 11,088 | - | - | - | 213 | |||||||||||||||
| Depreciation and amortization | 77,435 | 74,573 | 71,640 | 71,447 | 71,410 | |||||||||||||||
| Operating income | 89,715 | 105,443 | 129,210 | 122,209 | 130,252 | |||||||||||||||
| Interest (expense), net | (20 | ) | (690 | ) | (1,530 | ) | (5,731 | ) | (4,939 | ) | ||||||||||
| Income from continuing operations before income taxes | 89,695 | 104,753 | 127,680 | 116,478 | 125,313 | |||||||||||||||
| Provision for income taxes | 26,452 | 30,408 | 47,920 | 32,743 | 46,147 | |||||||||||||||
| Income from continuing operations | 63,243 | 74,345 | 79,760 | 83,735 | 79,166 | |||||||||||||||
| (Loss) from discontinued operations, net of income taxes | - | - | (463 | ) | (487 | ) | 8,435 | |||||||||||||
| Net income | $ | 63,243 | $ | 74,345 | $ | 79,297 | $ | 83,248 | $ | 87,601 | ||||||||||
| Basic earnings per common share | ||||||||||||||||||||
| Income from continuing operations | $ | 2.63 | $ | 2.92 | $ | 2.94 | $ | 2.94 | $ | 2.70 | ||||||||||
| (Loss) from discontinued operations | - | - | (0.02 | ) | (0.02 | ) | 0.29 | |||||||||||||
| Net income | $ | 2.63 | $ | 2.92 | $ | 2.93 | $ | 2.92 | $ | 2.99 | ||||||||||
| Basic weighted average common shares outstanding | 24,092 | 25,459 | 27,084 | 28,463 | 29,307 | |||||||||||||||
| Diluted earnings per common share | ||||||||||||||||||||
| Income from continuing operations | $ | 2.61 | $ | 2.90 | $ | 2.91 | $ | 2.92 | $ | 2.68 | ||||||||||
| (Loss) from discontinued operations | - | - | (0.02 | ) | (0.02 | ) | 0.29 | |||||||||||||
| Net income | $ | 2.61 | $ | 2.90 | $ | 2.89 | $ | 2.90 | $ | 2.96 | ||||||||||
| Diluted weighted average common shares outstanding | 24,276 | 25,668 | 27,436 | 28,707 | 29,548 | |||||||||||||||
Table may not add due to rounding
| 8 |
Table 5
THE CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AT COST METHOD
(In thousands, except per share amounts)
(Unaudited)
| Quarter Ended | ||||||||||||||||||||||||||||||||
| February 2, | October 27, | July 28, | April 28, | January 28, | October 29, | July 30, | April 30, | |||||||||||||||||||||||||
| 2013 | 2012 | 2012 | 2012 | 2012 | 2011 | 2011 | 2011 | |||||||||||||||||||||||||
| (As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | ||||||||||||||||||||||||||
| Net sales | $ | 509,224 | $ | 500,928 | $ | 360,826 | $ | 438,508 | $ | 457,463 | $ | 484,085 | $ | 343,508 | $ | 430,806 | ||||||||||||||||
| Cost of sales | 320,667 | 291,395 | 246,121 | 259,863 | 294,843 | 286,059 | 225,934 | 249,377 | ||||||||||||||||||||||||
| Gross profit | 188,557 | 209,533 | 114,705 | 178,645 | 162,620 | 198,026 | 117,574 | 181,429 | ||||||||||||||||||||||||
| Selling, general and administrative expenses | 136,089 | 131,875 | 120,671 | 122,283 | 121,088 | 127,229 | 112,446 | 116,662 | ||||||||||||||||||||||||
| Asset impairment charges | 215 | 539 | 280 | 1,250 | 461 | 369 | 980 | 398 | ||||||||||||||||||||||||
| Other costs | 6,622 | 570 | 3,062 | 834 | - | - | - | - | ||||||||||||||||||||||||
| Depreciation and amortization | 19,712 | 23,023 | 17,482 | 17,218 | 19,851 | 18,493 | 18,478 | 17,751 | ||||||||||||||||||||||||
| Operating income (loss) | 25,919 | 53,526 | (26,790 | ) | 37,060 | 21,220 | 51,935 | (14,330 | ) | 46,618 | ||||||||||||||||||||||
| Interest (expense), net | 84 | (23 | ) | (30 | ) | (51 | ) | (35 | ) | (70 | ) | (314 | ) | (271 | ) | |||||||||||||||||
| Income (loss) before taxes | 26,003 | 53,503 | (26,820 | ) | 37,009 | 21,185 | 51,865 | (14,644 | ) | 46,347 | ||||||||||||||||||||||
| Provision (benefit) for income taxes | 6,875 | 16,198 | (8,896 | ) | 12,275 | (2,140 | ) | 19,728 | (5,757 | ) | 18,577 | |||||||||||||||||||||
| Net income (loss) | $ | 19,128 | $ | 37,305 | $ | (17,924 | ) | $ | 24,734 | $ | 23,325 | $ | 32,137 | $ | (8,887 | ) | $ | 27,770 | ||||||||||||||
| Earnings (loss) per common share | ||||||||||||||||||||||||||||||||
| Basic | $ | 0.81 | $ | 1.55 | $ | (0.74 | ) | $ | 1.01 | $ | 0.94 | $ | 1.28 | $ | (0.35 | ) | $ | 1.06 | ||||||||||||||
| Diluted | $ | 0.80 | $ | 1.54 | $ | (0.74 | ) | $ | 1.00 | $ | 0.93 | $ | 1.27 | $ | (0.35 | ) | $ | 1.05 | ||||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||||||||||||||||||
| Basic | 23,541 | 24,086 | 24,249 | 24,535 | 24,834 | 25,121 | 25,738 | 26,120 | ||||||||||||||||||||||||
| Diluted | 23,789 | 24,293 | 24,249 | 24,691 | 25,033 | 25,279 | 25,738 | 26,387 | ||||||||||||||||||||||||
| 9 |
Table 6
THE CHILDREN’S PLACE RETAIL STORES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP AT COST METHOD
(In thousands, except per share amounts)
(Unaudited)
| Fiscal Year Ended | ||||||||||||||||||||
| February 2, | January 28, | January 29, | January 30, | January 31, | ||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||
| (As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | |||||||||||||||||
| Net sales | $ | 1,809,486 | $ | 1,715,862 | $ | 1,673,999 | $ | 1,643,587 | $ | 1,630,323 | ||||||||||
| Cost of sales | 1,118,046 | 1,056,213 | 1,013,878 | 991,393 | 954,227 | |||||||||||||||
| Gross profit | 691,440 | 659,649 | 660,121 | 652,194 | 676,096 | |||||||||||||||
| Selling, general and administrative expenses | 510,918 | 477,425 | 456,558 | 456,338 | 467,730 | |||||||||||||||
| Restructuring severance/miscellaneous costs | 2,854 | - | - | 2,805 | 3,056 | |||||||||||||||
| Proxy fees | - | - | - | 2,054 | - | |||||||||||||||
| Transition income | - | - | - | - | (11,582 | ) | ||||||||||||||
| Sale of store lease | - | - | - | - | (2,300 | ) | ||||||||||||||
| Tax benefit | - | - | - | - | (50 | ) | ||||||||||||||
| Legal Settlement | 1,087 | - | - | - | - | |||||||||||||||
| Settlement of employment tax audits related to stock options | - | - | (619 | ) | (3,532 | ) | - | |||||||||||||
| Non-GAAP Selling, general and administrative expenses | 506,977 | 477,425 | 457,177 | 455,011 | 478,606 | |||||||||||||||
| Asset impairment charges | 2,284 | 2,208 | 2,713 | 2,200 | 6,491 | |||||||||||||||
| Store Impairment | 1,250 | - | - | 852 | 4,902 | |||||||||||||||
| Non-GAAP Asset impairment charges | 1,034 | 2,208 | 2,713 | 1,348 | 1,589 | |||||||||||||||
| Other costs | 11,088 | - | - | - | 213 | |||||||||||||||
| DC exit costs | 11,088 | - | - | - | 213 | |||||||||||||||
| Non-GAAP Other costs | - | - | - | - | - | |||||||||||||||
| Depreciation and amortization | 77,435 | 74,573 | 71,640 | 71,447 | 71,410 | |||||||||||||||
| DC exit costs and Canadian store remodels | 9,335 | 1,032 | - | - | - | |||||||||||||||
| Non-GAAP Depreciation and amortization | 68,100 | 73,541 | 71,640 | 71,447 | 71,410 | |||||||||||||||
| Operating income | 89,715 | 105,443 | 129,210 | 122,209 | 130,252 | |||||||||||||||
| Non-GAAP Operating income | 115,329 | 106,475 | 128,591 | 124,388 | 124,491 | |||||||||||||||
| Interest (expense), net | (20 | ) | (690 | ) | (1,530 | ) | (5,731 | ) | (4,939 | ) | ||||||||||
| Settlement of employment tax audits related to stock options and other misc | - | - | 72 | (907 | ) | - | ||||||||||||||
| Non-GAAP Interest (expense), net | (20 | ) | (690 | ) | (1,602 | ) | (4,824 | ) | (4,939 | ) | ||||||||||
| Income before taxes | 89,695 | 104,753 | 127,680 | 116,478 | 125,313 | |||||||||||||||
| Non-GAAP Income before taxes | 115,309 | 105,785 | 126,989 | 119,564 | 119,552 | |||||||||||||||
| Provision for income taxes | 26,452 | 30,408 | 47,920 | 32,743 | 46,147 | |||||||||||||||
| Non-GAAP Provision for income taxes | 36,477 | 33,718 | 47,644 | 48,869 | 48,308 | |||||||||||||||
| Income from continuing operations | 63,243 | 74,345 | 79,760 | 83,735 | 79,166 | |||||||||||||||
| Non-GAAP Income from continuing operations | 78,832 | 72,067 | 79,345 | 70,695 | 71,244 | |||||||||||||||
| (Loss) from discontinued operations, net of income taxes | - | - | (463 | ) | (487 | ) | 8,435 | |||||||||||||
| Net income | 63,243 | 74,345 | 79,297 | 83,248 | 87,601 | |||||||||||||||
| Non-GAAP Net income | $ | 78,832 | $ | 72,067 | $ | 78,882 | $ | 70,208 | $ | 79,679 | ||||||||||
| Non-GAAP Basic earnings per common share | ||||||||||||||||||||
| Income from continuing operations | $ | 3.27 | $ | 2.83 | $ | 2.93 | $ | 2.48 | $ | 2.43 | ||||||||||
| (Loss) from discontinued operations | - | - | (0.02 | ) | (0.02 | ) | 0.29 | |||||||||||||
| Net income | $ | 3.27 | $ | 2.83 | $ | 2.91 | $ | 2.47 | $ | 2.72 | ||||||||||
| Basic weighted average common shares outstanding | 24,092 | 25,459 | 27,084 | 28,463 | 29,307 | |||||||||||||||
| Non-GAAP Diluted earnings per common share | ||||||||||||||||||||
| Income from continuing operations | $ | 3.25 | $ | 2.81 | $ | 2.89 | $ | 2.46 | $ | 2.41 | ||||||||||
| (Loss) from discontinued operations | - | - | (0.02 | ) | (0.02 | ) | 0.29 | |||||||||||||
| Net income | $ | 3.25 | $ | 2.81 | $ | 2.88 | $ | 2.45 | $ | 2.70 | ||||||||||
| Diluted weighted average common shares outstanding | 24,276 | 25,668 | 27,436 | 28,707 | 29,548 | |||||||||||||||
Table may not add due to rounding
| 10 |
Table 7
THE CHILDREN’S PLACE RETAIL STORES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP AT COST METHOD
(In thousands, except per share amounts)
(Unaudited)
| Quarter Ended | ||||||||||||||||||||||||||||||||
| February 2, | October 27, | July 28, | April 28, | January 28, | October 29, | July 30, | April 30, | |||||||||||||||||||||||||
| 2013 | 2012 | 2012 | 2012 | 2012 | 2011 | 2011 | 2011 | |||||||||||||||||||||||||
| (As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | (As adjusted) | ||||||||||||||||||||||||||
| Net sales | $ | 509,224 | $ | 500,928 | $ | 360,826 | $ | 438,508 | $ | 457,463 | $ | 484,085 | $ | 343,508 | $ | 430,806 | ||||||||||||||||
| Cost of sales | 320,667 | 291,395 | 246,121 | 259,863 | 294,843 | 286,059 | 225,934 | 249,377 | ||||||||||||||||||||||||
| Gross profit | 188,557 | 209,533 | 114,705 | 178,645 | 162,620 | 198,026 | 117,574 | 181,429 | ||||||||||||||||||||||||
| Selling, general and administrative expenses | 136,089 | 131,875 | 120,671 | 122,283 | 121,088 | 127,229 | 112,446 | 116,662 | ||||||||||||||||||||||||
| Restructuring severance/miscellaneous costs | - | - | 164 | 2,690 | - | - | - | - | ||||||||||||||||||||||||
| Legal Settlement | - | - | 1,087 | - | - | - | - | - | ||||||||||||||||||||||||
| Non-GAAP Selling, general and administrative expenses | 136,089 | 131,875 | 119,420 | 119,593 | 121,088 | 127,229 | 112,446 | 116,662 | ||||||||||||||||||||||||
| Asset impairment charges | 215 | 539 | 280 | 1,250 | 461 | 369 | 980 | 398 | ||||||||||||||||||||||||
| Store Impairment due to early termination | - | - | - | 1,250 | - | - | - | - | ||||||||||||||||||||||||
| Non-GAAP Asset impairment charges | 215 | 539 | 280 | - | 461 | 369 | 980 | 398 | ||||||||||||||||||||||||
| Other costs | 6,622 | 570 | 3,062 | 834 | - | - | - | - | ||||||||||||||||||||||||
| DC exit costs | 6,622 | 570 | 3,062 | 834 | - | - | - | - | ||||||||||||||||||||||||
| Non-GAAP Other costs | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
| Depreciation and amortization | 19,712 | 23,023 | 17,482 | 17,218 | 19,851 | 18,493 | 18,478 | 17,751 | ||||||||||||||||||||||||
| DC exit costs and Canadian store remodels | 2,019 | 5,958 | 465 | 893 | 922 | 110 | - | - | ||||||||||||||||||||||||
| Non-GAAP Depreciation and amortization | 17,693 | 17,065 | 17,017 | 16,325 | 18,929 | 18,383 | 18,478 | 17,751 | ||||||||||||||||||||||||
| Operating income (loss) | 25,919 | 53,526 | (26,790 | ) | 37,060 | 21,220 | 51,935 | (14,330 | ) | 46,618 | ||||||||||||||||||||||
| Non-GAAP Operating income (loss) | 34,560 | 60,054 | (22,012 | ) | 42,727 | 22,142 | 52,045 | (14,330 | ) | 46,618 | ||||||||||||||||||||||
| Interest (expense), net | 84 | (23 | ) | (30 | ) | (51 | ) | (35 | ) | (70 | ) | (314 | ) | (271 | ) | |||||||||||||||||
| Income (loss) before taxes | 26,003 | 53,503 | (26,820 | ) | 37,009 | 21,185 | 51,865 | (14,644 | ) | 46,347 | ||||||||||||||||||||||
| Non-GAAP Income (loss) before taxes | 34,644 | 60,031 | (22,042 | ) | 42,676 | 22,107 | 51,975 | (14,644 | ) | 46,347 | ||||||||||||||||||||||
| Provision (benefit) for income taxes | 6,875 | 16,198 | (8,896 | ) | 12,275 | (2,140 | ) | 19,728 | (5,757 | ) | 18,577 | |||||||||||||||||||||
| Non-GAAP Provision (benefit) for income taxes | 10,331 | 18,772 | (7,047 | ) | 14,422 | 1,139 | 19,759 | (5,757 | ) | 18,577 | ||||||||||||||||||||||
| Net income (loss) | 19,128 | 37,305 | (17,924 | ) | 24,734 | 23,325 | 32,137 | (8,887 | ) | 27,770 | ||||||||||||||||||||||
| Non-GAAP Net income (loss) | $ | 24,313 | $ | 41,259 | $ | (14,995 | ) | $ | 28,254 | $ | 20,968 | $ | 32,216 | $ | (8,887 | ) | $ | 27,770 | ||||||||||||||
| Non-GAAP Earnings (loss) per common share | ||||||||||||||||||||||||||||||||
| Basic | $ | 1.03 | $ | 1.71 | $ | (0.62 | ) | $ | 1.15 | $ | 0.84 | $ | 1.28 | $ | (0.35 | ) | $ | 1.06 | ||||||||||||||
| Diluted | $ | 1.02 | $ | 1.70 | $ | (0.62 | ) | $ | 1.14 | $ | 0.84 | $ | 1.27 | $ | (0.35 | ) | $ | 1.05 | ||||||||||||||
| Weighted average common shares outstanding | ||||||||||||||||||||||||||||||||
| Basic | 23,541 | 24,086 | 24,249 | 24,535 | 24,834 | 25,121 | 25,738 | 26,120 | ||||||||||||||||||||||||
| Diluted | 23,789 | 24,293 | 24,249 | 24,691 | 25,033 | 25,279 | 25,738 | 26,387 | ||||||||||||||||||||||||
| 11 |
Table 8
THE CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| COST METHOD | RETAIL METHOD | |||||||||||||||
| February 2, | January 28, | February 2, | January 28, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (As adjusted) | ||||||||||||||||
| Assets: | ||||||||||||||||
| Cash and short-term investments | $ | 209,128 | $ | 176,655 | $ | 209,128 | $ | 176,655 | ||||||||
| Accounts receivable | 18,490 | 17,382 | 18,490 | 17,382 | ||||||||||||
| Inventories | 266,976 | 237,786 | 241,105 | 212,916 | ||||||||||||
| Other current assets | 50,641 | 57,105 | 60,391 | 66,372 | ||||||||||||
| Total current assets | 545,235 | 488,928 | 529,114 | 473,325 | ||||||||||||
| Property and equipment, net | 330,101 | 323,863 | 330,101 | 323,863 | ||||||||||||
| Other assets, net | 48,074 | 53,461 | 48,074 | 53,461 | ||||||||||||
| Total assets | $ | 923,410 | $ | 866,252 | $ | 907,289 | $ | 850,649 | ||||||||
| Liabilities and Stockholders' Equity: | ||||||||||||||||
| Accounts payable | $ | 87,461 | $ | 55,516 | $ | 87,461 | $ | 55,516 | ||||||||
| Accrued expenses and other current liabilities | 104,045 | 76,039 | 104,045 | 76,039 | ||||||||||||
| Total current liabilities | 191,506 | 131,555 | 191,506 | 131,555 | ||||||||||||
| Other liabilities | 110,955 | 109,728 | 110,955 | 109,728 | ||||||||||||
| Total liabilities | 302,461 | 241,283 | 302,461 | 241,283 | ||||||||||||
| Stockholders' equity | 620,949 | 624,969 | 604,828 | 609,366 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 923,410 | $ | 866,252 | $ | 907,289 | $ | 850,649 | ||||||||
###
| 12 |