View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 9, 2006
- --------------------------------------------------------------------------------
THE CHILDREN'S PLACE RETAIL STORES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-23071 31-1241495
- ----------------------------- ------------------ ------------------
(State or other jurisdiction (Commission (IRS Employer ID
of incorporation) File Number) Number)
915 Secaucus Road, Secaucus, New Jersey 07094
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (201) 558-2400
- --------------------------------------------------------------------------------
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:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] 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 9, 2006, The Children's Place Retail Stores, Inc. (the "Company")
issued a press release announcing certain financial information for the fourth
quarter and fiscal year ended January 28, 2006. A copy of the Company's press
release is included as Exhibit 99.1 hereto.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Business Acquired: Not applicable
(b) Pro Forma Financial Information: Not applicable
(c) Exhibits:
99.1 Press Release dated March 9, 2006.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
THE CHILDREN'S PLACE RETAIL
STORES, INC.
By: /s/ Hiten Patel
-----------------------------------
Name: Hiten Patel
Title: Senior Vice President and Chief
Financial Officer
Dated: March 9, 2006
INDEX TO EXHIBITS
Current Report on Form 8-K
dated March 9, 2006
The Children's Place Retail Stores, Inc.
99.1 Press Release dated March 9, 2006.
Exhibit 99.1
The Children's Place Retail Stores, Inc. Reports
Fiscal Fourth Quarter and 2005 Financial Results; GAAP Earnings
Per Share Increased 85% to $1.57 for the Fourth Quarter and
46% to $2.27 for Fiscal 2005, In-Line with Guidance
SECAUCUS, N.J.--(BUSINESS WIRE)--March 9, 2006--The Children's
Place Retail Stores, Inc. (Nasdaq: PLCE) today reported financial
results for the fourth quarter and fiscal year ended January 28, 2006.
Fourth Quarter
-- Consolidated net sales for the fourth quarter increased 17% to
$539.7 million, compared to $462.1 million last year. Fourth
quarter sales were comprised of $355.1 million from The
Children's Place, a 19% increase over last year, and $184.6
million in sales from Disney Store, compared to $163.4 million
for Disney Store last year. Fiscal 2005 fourth quarter sales
results included 13 weeks of sales at Disney Store versus 10
weeks last year.
-- Comparable store sales for The Children's Place increased 11%
in the quarter, on top of a 17% increase last year. Fourth
quarter comparable store sales exclude the Disney Store brand,
which did not enter the comparable store sales base until
February 2006, consistent with the Company's comparable store
sales definition.
-- Net income increased 91% to $45.7 million versus $23.9 million
including extraordinary gain last year.
-- Diluted earnings per share increased 85% for the quarter to
$1.57, compared to diluted earnings per share including
extraordinary gain of $0.85 for the fourth quarter last year.
-- The Company opened 16 Children's Place stores and two Disney
Stores during the fourth quarter. In addition, the Company
closed six Disney Stores.
The above GAAP net income and earnings per share results include:
-- a $2.1 million, or $0.07 per share, charge related to the
accelerated vesting of certain stock options; and
-- a $0.3 million, or $0.01 per share, charge reflecting the
Company's announcement last week to retrospectively apply FSP
FAS No. 13-1, the expensing of rent during construction.
Excluding the above items, fourth quarter earnings per share would
have been $1.65, in-line with previous guidance.
Fiscal Year 2005
-- Net sales for the fiscal year increased 44% to $1.669 billion,
from $1.158 billion for 2004. Fiscal 2005 sales were comprised
of $1.171 billion from The Children's Place, an 18% increase
over last year, and $497.7 million in sales from the Company's
Disney Store business.
-- Comparable store sales for The Children's Place increased 9%
for the year, compared to a 16% increase last year.
-- Net income including extraordinary gain increased 53% to $65.6
million versus $42.8 million including extraordinary gain last
year.
-- Diluted earnings per share including extraordinary gain
increased 46% to $2.27, compared to diluted earnings per share
including extraordinary gain of $1.55 in fiscal 2004.
-- The Company opened 55 Children's Place stores and 18 Disney
Stores in fiscal 2005. In addition, the Company closed three
Children's Place stores and seven Disney Stores.
For fiscal 2005, the impact of FSP FAS No. 13-1 was approximately
$2.4 million, or $0.05 per share. Excluding this item and the
accelerated vesting of stock options, fiscal 2005 earnings per share
including extraordinary gain would have been $2.39.
"Fiscal 2005 was another great year for our Company. The
Children's Place brand continued to gain market share and the growth
and leverage achieved in the fourth quarter was a testament to our
scaleable systems infrastructure, strong team and management depth,"
said Ezra Dabah, Chairman and Chief Executive Officer of The
Children's Place. "At Disney Store, while the fourth quarter proved
challenging, we have made progress in positioning the business for
success and we look to 2006 with excitement. Disney has a great
line-up of new content coming up this year, and we have aligned our
merchandise strategies to capitalize on these events in a big way. We
continue to believe that The Children's Place and Disney Store can
grow up to 1,800 stores across North America, leaving us with 700
stores still to open. I am confident that both brands have substantial
opportunity to deliver significant, profitable growth for many years
to come."
The Children's Place will host a webcast of its fourth quarter
conference call today at 9:00 a.m., Eastern Time. Interested parties
are invited to listen to the call at the Company's web site,
www.childrensplace.com. An archive of the webcast will be available on
the site through Thursday, March 16, 2006.
The Children's Place Retail Stores, Inc., is a leading specialty
retailer of children's merchandise. The Company designs, contracts to
manufacture and sells high-quality, value-priced merchandise under the
proprietary "The Children's Place" and licensed "Disney Store" brand
names. As of February 25, 2006, the Company owned and operated 802 The
Children's Place stores and 316 Disney Stores in North America and its
online store, www.childrensplace.com.
This press release and above referenced call may contain certain
forward-looking statements regarding future circumstances. These
forward-looking statements are based upon the Company's current
expectations and assumptions and are subject to various risks and
uncertainties that could cause actual results to differ materially
from those contemplated in such forward-looking statements including,
in particular, the risks and uncertainties described in the Company's
filings with the Securities and Exchange Commission. Actual results,
events, and performance may differ. Readers or listeners (on the call)
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. We undertake 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 Children's Place or any other person that the events
or circumstances described in such statement are material.
(Tables Follow)
THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
13 Weeks Ended: 52 Weeks Ended:
January 28, January 29, January 28, January 29,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Net sales $539,718 $462,108 $1,668,736 $1,157,548
Cost of sales 304,252 281,659 1,007,496 705,681
----------- ----------- ----------- -----------
Gross profit 235,466 180,449 661,240 451,867
Selling, general and
administrative
expenses 144,641 130,035 505,684 333,718
Depreciation and
amortization 15,260 12,646 52,886 49,049
----------- ----------- ----------- -----------
Operating income 75,565 37,768 102,670 69,100
Interest (income)
expense, net (272) 177 (563) 22
----------- ----------- ----------- -----------
Income before income
taxes and
extraordinary gain 75,837 37,591 103,233 69,078
Provision for income
taxes 30,143 13,983 39,322 26,595
Income before
extraordinary gain 45,694 23,608 63,911 42,483
Extraordinary gain,
net of taxes 0 273 1,664 273
----------- ----------- ----------- -----------
Net income $45,694 $23,881 $65,575 $42,756
=========== =========== =========== ===========
Basic net income per
common share before
extraordinary gain $1.64 $0.87 $2.31 $1.58
Extraordinary gain,
net of taxes 0.00 0.01 0.06 0.01
----------- ----------- ----------- -----------
Basic net income per
common share $1.64 $0.88 $2.37 $1.59
=========== =========== =========== ===========
Basic weighted
average common
shares outstanding 27,899 27,076 27,676 26,919
Diluted net income
per common share
before
extraordinary gain $1.57 $0.84 $2.21 $1.54
Extraordinary gain,
net of taxes 0.00 0.01 0.06 0.01
----------- ----------- ----------- -----------
Diluted net income
per common share $1.57 $0.85 $2.27 $1.55
=========== =========== =========== ===========
Diluted weighted
average common
shares and common
share equivalents
outstanding 29,127 28,106 28,877 27,633
Note: Periods presented include the retrospective application of FAS
FSP 13-1.
THE CHILDREN'S PLACE RETAIL STORES, INC.
RETROSPECTIVE APPLICATION OF FSP FAS 13-1
(In thousands, except per share amounts)
(Unaudited)
13 Weeks Ended January 29, 2005
-------------------------------
Reported Adjustments Adjusted
-------- ----------- --------
Net sales $462,108 $ -- $462,108
Cost of sales 281,659 -- 281,659
-------- ----------- --------
Gross profit 180,449 -- 180,449
Selling, general and
administrative expenses 129,146 889 130,035
Depreciation and amortization 13,383 (737) 12,646
-------- ----------- --------
Operating income 37,920 (152) 37,768
Interest expense (income), net 177 -- 177
-------- ----------- --------
Income before income taxes and
extraordinary gain 37,743 (152) 37,591
Provision for income taxes 14,041 (58) 13,983
-------- ----------- --------
Income before extraordinary gain 23,702 (94) 23,608
Extraordinary gain (net of taxes) 273 -- 273
-------- ----------- --------
Net income $23,975 $(94) $23,881
======== =========== ========
Basic income per share $0.89 $(0.01) $0.88
Basic weighted average number
of shares outstanding 27,076 27,076 27,076
Diluted income per share $0.85 $0.00 $0.85
Diluted weighted average number
of shares outstanding 28,106 28,106 28,106
52 Weeks Ended January 29, 2005
-------------------------------
Reported Adjustments Adjusted
-------- ----------- --------
Net sales $1,157,548 $ -- $1,157,548
Cost of sales 705,681 -- 705,681
-------- ----------- --------
Gross profit 451,867 -- 451,867
Selling, general and
administrative expenses 330,080 3,638 333,718
Depreciation and amortization 51,835 (2,786) 49,049
-------- ----------- --------
Operating income 69,952 (852) 69,100
Interest expense (income), net 22 -- 22
-------- ----------- --------
Income before income taxes and
extraordinary gain 69,930 (852) 69,078
Provision for income taxes 26,923 (328) 26,595
-------- ----------- --------
Income before extraordinary gain 43,007 (524) 42,483
Extraordinary gain (net of taxes) 273 -- 273
-------- ----------- --------
Net income $43,280 $(524) $42,756
======== =========== ========
Basic income per share $1.61 $(0.02) $1.59
Basic weighted average number
of shares outstanding 26,919 26,919 26,919
Diluted income per share $1.57 $(0.02) $1.55
Diluted weighted average number
of shares outstanding 27,633 27,633 27,633
THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
January 28, 2006 January 29, 2005
---------------- ----------------
Current assets:
Cash and investments $173,323 $165,196
Accounts receivable 28,971 23,987
Inventories 214,702 161,969
Other current assets 43,875 41,007
---------------- ----------------
Total current assets 460,871 392,159
Property and equipment, net 246,516 204,443
Other assets, net 36,865 19,558
---------------- ----------------
Total assets $744,252 $616,160
================ ================
Current liabilities:
Revolving credit facility $ 0 $37,268
Accounts payable 81,800 78,106
Accrued expenses and other current
liabilities 131,204 99,575
---------------- ----------------
Total current liabilities 213,004 214,949
Other liabilities 138,390 100,305
---------------- ----------------
Total liabilities 351,394 315,254
Stockholders' equity 392,858 300,906
---------------- ----------------
Total liabilities and
stockholders' equity $744,252 $616,160
================ ================
Note: Periods presented include the retrospective application of FAS
FSP 13-1.
THE CHILDREN'S PLACE RETAIL STORES, INC.
SEGMENT INFORMATION
(In millions)
(Unaudited)
Thirteen Weeks Ended January 28, 2006
-------------------------------------------
The
Children's Disney Shared Total
Place Store Services (1) Company
---------- -------- ------------ -------
Net sales $ 355.1 $ 184.6 $ - $539.7
Segment operating profit
(loss)(1) 76.1 19.0 (19.5) 75.6
Operating profit as a
percent of net sales 21.4% 10.3% N/A 14.0 %
Fifty-Two Weeks Ended January 28, 2006
-------------------------------------------
The
Children's Disney Shared Total
Place Store Services(1) Company
---------- ------- ----------- ---------
Net sales $ 1,171.0 $497.7 $ - $1,668.7
Segment operating profit
(loss)(1) 170.0 (3.4) (63.9) 102.7
Operating profit (loss)
as a percent of net
sales 14.5% (0.7)% N/A 6.2%
(1) The $2.1 million expense for the acceleration of vesting of
certain stock options is recorded in Shared Services.
CONTACT: The Children's Place
Hiten Patel, 201-902-2177
or
Investor Relations:
Heather Anthony, 201-558-2865