- Net Sales Increase of 2.9% to $106.7 million –

- Comparable Sales Increase of 4.5% -

- Gross Margin Expanded 95 basis points -

Christopher & Banks Corporation (NYSE:CBK), a specialty women’s apparel retailer, today reported results for the third quarter ended October 29, 2016.

Results for the Third Quarter Ended October 29, 2016

  • Net sales totaled $106.7 million, an increase of 2.9%, while operating on average 506 stores, compared to $103.6 million in net sales for the third quarter of fiscal 2015, while operating on average 533 stores.
  • Comparable sales increased 4.5% compared to a 6.7% decrease in the same period last year.
  • Gross margin rate increased 95 basis points to 36.8%, as compared to last year’s third quarter.
  • Net income totaled $3.5 million, or $0.09 per diluted share, compared to a net loss for the prior year period of $0.3 million, or a $0.01 loss per share.
  • Adjusted EBITDA, a non-GAAP measure, was $6.7 million, compared to $3.8 million for the same period last year. The Company defines Adjusted EBITDA as Net income (loss), adjusted for Income tax provision (benefit); Other Income; Interest expense, net; Depreciation and Amortization; Impairment of store assets; and certain non-recurring items.*
  • On-hand inventory, at cost, was down 3.8%, in line with the Company’s expectations.

LuAnn Via, President and Chief Executive Officer, commented, "We are very pleased with our third quarter performance, as we exceeded our original guidance as well as our preliminary results reported on November 4, 2016. Our comparable sales increase reflects a favorable response to our merchandise assortment as well as our effective marketing campaigns and events that drew her into our stores and to our website. We saw growth in average spend among our existing customers and reactivated more lapsed and also acquired additional new customers. We were able to drive an increase in gross margin rate, despite a highly promotional environment and unseasonably warm weather. As we look ahead, we expect continued momentum as we further execute across our strategic initiatives in merchandising, marketing and technology to drive long term profitable growth.”

LuAnn Via also stated, “In addition to the initiatives we are undertaking to increase sales, we continue to focus on improving our cash flow. After significant investments in technology and stores the past several years, we are focusing on optimizing these investments in Fiscal 2017 and reducing capital outlays. We are also taking a close look at our costs and identifying opportunities for additional savings in a number of areas, including occupancy, and increased efficiencies in processes and contract negotiations. Our preliminary assessment suggests there is an opportunity for net savings in fiscal 2017 of approximately $5.0 million to $7.0 million, before giving effect to the costs the Company would incur in connection with potential growth in overall sales.”

Balance Sheet Highlights and Capital Expenditures

Cash, cash-equivalents and investments totaled $25.8 million as of October 29, 2016. Capital expenditures for the third quarter of fiscal 2016 were $2.0 million compared to $5.1 million in last year’s third quarter. Capital expenditures in the third quarter this year primarily reflected investments in new stores and technology associated with the Company’s Customer First initiative. For the third quarter ended October 29, 2016, the Company had no outstanding borrowings under its revolving credit facility.

Outlook for the 2016 Fourth Quarter and Full Fiscal Year

For the fourth quarter of fiscal 2016, the Company currently expects:

  • Total net sales of between $93.0 million and $97.0 million, with a comparable sales increase of 1.0% to 5.0%, as compared to net sales of $94.6 million and a comparable sales decrease of 3.4% in last year’s fourth quarter;
  • A net loss of $4.1 million to $5.9 million or a net loss of $0.11 to $0.16 per share, as compared to a net loss of $46.6 Million or a net loss of $1.26 per share in last year’s fourth quarter, including $37.5 million or a net loss of $1.02 per share to record a valuation allowance for deferred tax assets;
  • Adjusted EBITDA, a non-GAAP measure, is expected to be between approximately a negative $0.6 million and a negative $2.4 million**;
  • Depreciation and amortization to be approximately $3.4 million as compared to $3.3 million in last year’s fourth quarter;
  • On-hand inventory, at cost, at the end of the quarter to decline by low single digits, as compared to the end of last year’s fourth quarter;
  • To close six Missy, Petite, Women (“MPW”) stores, and close 24 CB and CJ stores and convert them into 12 MPW stores; and
  • Average square footage to be down 5.0%, as compared to last year’s fourth quarter.

For the 2016 fiscal year, the Company currently expects:

  • Capital expenditures to be approximately $12.0 million to $12.5 million, compared to the Company’s previous expectations of capital expenditures of $12.5 million to $13.0 million;
  • Nominal taxes, representing minimal taxes and fees;
  • Average square footage for the year to be down approximately 1.6% as compared to fiscal 2015; and
  • To end the fiscal year with cash, cash equivalents and investments in the low to mid $30 million range, as compared to $34.5 million at the end of last year’s fourth quarter.

Conference Call Information

The Company will discuss its third quarter results in a conference call scheduled for today, December 1, 2016, at 8:30 a.m. Eastern Time. The conference call will be simultaneously broadcast live over the Internet at http://www.christopherandbanks.com. An online archive of the broadcast will be available within approximately one hour of the completion of the call and will be accessible at http://www.christopherandbanks.com until January 1, 2016. In addition, an audio replay of the call will be available shortly after its conclusion and will be archived until December 8, 2016. This call may be accessed by dialing 1-877-870-5176 and using the passcode 13650264.

Non-GAAP Measures

In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), this press release contains non-GAAP financial measures, including Adjusted EBITDA. The presentation of this non-GAAP measure is not in accordance with GAAP, and should not be considered superior to or as a substitute for net income or net loss, or any other measure of performance derived in accordance with GAAP. The Company believes the inclusion of this non-GAAP measure provides useful supplemental information to investors regarding the underlying performance of the Company’s business operations, especially when comparing such results to previous periods. This non-GAAP measure is not an alternative for measures of financial performance prepared in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies. Investors are encouraged to review the reconciliations of the non-GAAP financial measure to its most directly comparable GAAP measure as provided in the tables below.

* Adjusted EBITDA is a non-GAAP financial measure. Please see “Non-GAAP Measures” below and reconciliations of this non-GAAP measure to the comparable GAAP measure that follows in the tables below.

** Adjusted EBITDA is a non-GAAP financial measure. Please see “Non-GAAP Measures” below and reconciliation of this non-GAAP measure to the comparable GAAP measure that follows in the tables below.

About Christopher & Banks

Christopher & Banks Corporation is a Minneapolis-based national specialty retailer featuring exclusively designed privately branded women’s apparel and accessories. As of December 1, 2016, the Company operates 503 stores in 45 states consisting of 315 MPW stores, 82 Outlet stores, 54 Christopher & Banks stores, and 52 stores in its women’s plus size clothing division CJ Banks. The Company also operates the www.ChristopherandBanks.com eCommerce website.

Keywords: Christopher & Banks, CJ Banks, Women’s Clothing, Plus Size Clothing, Petites, Extended Sizes, Outfits.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements may use the words “expect”, “anticipate”, “plan”, “intend”, “project”, “believe”, “drive” “in order to” and similar expressions and include the statements (i) that as the Company looks ahead, it expects continued momentum as it further executes across its strategic initiatives in merchandising, marketing and technology to drive long term profitable growth; (ii) that our preliminary assessment suggests there is an opportunity for net savings in fiscal 2017 of approximately $5.0 million to $7.0 million, before giving effect to the costs the Company would incur in connection with potential growth in overall sales; and (iii) made in the “Outlook for the 2016 Fourth Quarter and Full Fiscal Year” section.

These statements are based on management’s current expectations and are subject to a number of uncertainties and risks, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause the Company’s actual results to differ materially from those expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, but are not limited to: (i) the inherent difficulty in forecasting consumer buying and retail traffic patterns which may be affected by factors beyond the Company’s control, such as a weakness in overall consumer demand; adverse weather, economic or political conditions; and shifts in consumer tastes or spending habits that result in reduced sales or gross margins; (ii) lack of acceptance of the Company’s fashions, including its seasonal fashions; (iii) the ability of the Company’s infrastructure and systems to adequately support its operations; (iv) the effectiveness of the Company’s brand awareness, marketing programs and efforts to enhance the in-store experience; (v) the possibility that, because of poor customer response to the Company’s merchandise, management may determine it is necessary to sell merchandise at lower than expected margins or at a loss; (vi) the failure to successfully implement the Company’s strategic and tactical plans and initiatives; (vii) general economic conditions could lead to a reduction in store traffic and in consumer spending on women’s apparel; (viii) fluctuations in the levels of the Company’s sales, expenses or earnings; and (ix) risks associated with the performance and operations of the Company’s Internet operations.

Readers are cautioned not to place undue reliance on these forward-looking statements which are based on current expectations and speak only as of the date of this release. The Company does not assume any obligation to update or revise any forward-looking statement at any time for any reason.

Certain other factors that may cause actual results to differ from such forward-looking statements are included in the Company’s periodic reports filed with the Securities and Exchange Commission and available on the Company’s website under “For Investors” and you are urged to carefully consider all such factors.

CHRISTOPHER & BANKS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited)       Thirteen Weeks Ended Thirty-Nine Weeks Ended October 29, October 31, October 29, October 31, 2016 2015 2016 2015 Net sales $ 106,668 $ 103,641 $ 296,625 $ 289,259 Merchandise, buying and occupancy costs   67,447     66,519     189,543     188,992   Gross profit 39,221 37,122 107,082 100,267 Other Operating Expenses: Selling, general and administrative 32,483 33,604 98,585 95,223 Depreciation and amortization 3,119 3,116 9,116 8,733 Impairment of store assets   —     67     476     182   Total other operating expenses   35,602     36,787     108,177     104,138   Operating income (loss) 3,619 335 (1,095 ) (3,871 ) Interest expense, net (44 ) (36 ) (126 ) (76 ) Other income   —     —     911     —   Income (Loss) before income taxes 3,575 299 (310 ) (3,947 ) Income tax provision (benefit)   82     614     249     (1,480 ) Net income (loss) $ 3,493   $ (315 ) $ (559 ) $ (2,467 )   Basic income (loss) per share: Net Income (loss) $ 0.09   $ (0.01 ) $ (0.02 ) $ (0.07 ) Basic shares outstanding   37,075     36,906     36,992     36,877     Diluted income (loss) per share: Net Income (loss) $ 0.09   $ (0.01 ) $ (0.02 ) $ (0.07 ) Diluted shares outstanding   37,153     36,906     36,992     36,877   CHRISTOPHER & BANKS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)     October 29, October 31, 2016 2015 ASSETS Current assets: Cash and cash equivalents $ 25,882 $ 24,369 Short-term investments — 5,009 Accounts receivable 3,742 4,978 Merchandise inventories 54,085 52,503 Prepaid expenses and other current assets 9,726 10,512 Deferred income taxes — 3,558 Income taxes receivable   601     503   Total current assets 94,036 101,432   Property, equipment and improvements, net 57,472 59,147   Other non-current assets: Deferred income taxes 375 36,075 Other assets   460     688   Total other non-current assets   835     36,763   Total assets $ 152,343   $ 197,342       LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 16,625 $ 16,652 Accrued salaries, wages and related expenses 6,754 5,501 Accrued liabilities and other current liabilities   23,478     22,278   Total current liabilities 46,857 44,431   Non-current liabilities: Deferred lease incentives 9,333 9,663 Deferred rent obligations 6,348 7,132 Other non-current liabilities   1,396     1,328   Total non-current liabilities 17,077 18,123   Stockholders' equity: Common stock 471 469 Additional paid-in capital 126,408 125,602 Retained earnings 74,241 121,427 Common stock held in treasury (112,711 ) (112,711 ) Accumulated other comprehensive income   —     1   Total stockholders' equity   88,409     134,788   Total liabilities and stockholders' equity $ 152,343   $ 197,342   CHRISTOPHER & BANKS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)   Thirty-Nine Weeks Ended October 29, October 31, 2016 2015 Cash flows from operating activities: Net loss $ (559 ) $ (2,467 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 9,116 8,733 Impairment of store assets 476 182 Deferred income taxes, net 18 (1,695 ) Gain on investments, net (911 ) (2 ) Amortization of premium on investments 10 34 Amortization of financing costs 47 47 Deferred lease-related liabilities (817 ) 2,923 Stock-based compensation expense 565 1,389 Loss on disposal of assets 1 —

Changes in operating assets and liabilities:

Accounts receivable 326 (978 ) Merchandise inventories (11,604 ) (7,185 ) Prepaid expenses and other assets (543 ) (3,708 ) Income taxes receivable (88 ) 342 Accounts payable 123 (1,703 ) Accrued liabilities 2,912 805 Other liabilities   164     67   Net cash used in operating activities (764 ) (3,216 )   Cash flows from investing activities: Purchases of property, equipment and improvements (8,770 ) (22,641 ) Proceeds from company-owned life insurance 911 — Maturities of available-for-sale investments   3,005     13,007   Net cash used in investing activities (4,854 ) (9,634 )   Cash flows from financing activities: Issuance of stock for stock option exercises, net of forfeitures 17 0 Shares redeemed for payroll taxes   (23 )   (26 ) Net cash used in financing activities   (6 )   (26 )   Net decrease in cash and cash equivalents (5,624 ) (12,876 ) Cash and cash equivalents at beginning of period   31,506     37,245   Cash and cash equivalents at end of period $ 25,882   $ 24,369     Supplemental cash flow information: Interest paid $ 143 $ 120 Income taxes paid (refunded) $ 102 $ (246 ) Accrued purchases of equipment and improvements $ 267 $ 1,055 CHRISTOPHER & BANKS CORPORATION AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION OF NET INCOME (LOSS) (in thousands) (unaudited)

The following table reconciles from Net income (loss) to Adjusted EBITDA for the thirteen week and thirty-nine week periods ended October 29, 2016 and October 31, 2015:

Thirteen Weeks Ended Thirty-Nine Weeks Ended October 29, October 31, October 29, October 31, 2016 2015 2016 2015 Net income (loss) $ 3,493 $ (315 ) $ (559 ) $ (2,467 ) Income tax provision (benefit) 82 614 249 (1,480 ) Other income — — (911 ) — Interest expense, net 44 36 126 76 Depreciation & amortization 3,119 3,116 9,116 8,733 Impairment of store assets — 67 476 182 Advisory fees in connection with shareholder activism — 318 1,549 687 eCommerce transition fees   —   —     684     —   Adjusted EBITDA $ 6,738 $ 3,836   $ 10,730   $ 5,731  

The following table reconciles from Net income (loss) to Adjusted EBITDA for the projected thirteen week periods ended January 28, 2017 and January 30, 2016:

Thirteen Weeks Ended January 28, 2017 January 30, Low High 2016 Net loss $ (5,900 ) $ (4,100 ) $ (46,627 ) Income tax provision 70 70 39,195 Interest expense, net 50 50 39 Depreciation & amortization 3,400 3,400 3,315 Impairment of store assets — — 99 Advisory fees in connection with shareholder activism   —     —     277   Adjusted EBITDA $ (2,380 ) $ (580 ) $ (3,702 )

COMPANY:Christopher & BanksPeter G. Michielutti, (763) 551-5000Executive Vice President, Chief Operating Officer and Chief Financial OfficerorINVESTOR RELATIONS:ICR, Inc.Jean Fontana, (646) 277-1214