Fourth quarter net sales increased 40.6% to $86.7 million
Fourth quarter comparable boutique sales increased 9.2%
Fourth quarter diluted earnings per share increased 73.7% to
$0.33
Francesca's Holdings Corporation (Nasdaq:FRAN) today reported a
73.7% increase in earnings per diluted share of $0.33 for the
fourth quarter ended February 2, 2013 compared to $0.19 per diluted
share for the same quarter last year. Net sales in the fourth
quarter were $86.7 million, an increase of 40.6% compared with net
sales of $61.7 million during the same period in fiscal 2011. Net
earnings of $14.9 million increased 78.0% compared to net earnings
of $8.4 million for the same quarter last year.
Neill Davis, Chief Executive Officer, commented, "We delivered
another quarter of strong growth and profitability as the company's
differentiated shopping experience continues to resonate with new
and existing customers. We are well positioned with the teams and
capabilities to continue expansion of our boutique base, increase
boutique productivity and further develop our direct-to-customer
presence. Looking ahead, we continue our growth trajectory with 80
openings for fiscal 2013, reaching the milestone of over 400
locations by the end of the first quarter."
Francesca's follows the NRF reporting calendar, which included
an extra week in the fourth quarter of fiscal 2012 (the 53rd week).
In the 53rd week, the Company had net sales of approximately $3.9
million, representing an approximate $0.03 increase to earnings per
diluted share for both the quarter and fiscal year. The 53rd week
is not included in comparable boutique sales calculations.
FOURTH QUARTER SUMMARY
Net sales for the fourteen weeks increased 40.6% to $86.7
million. Net sales increases were driven by a 9.2% comparable
boutique sales increase following a 14.7% increase in the prior
year period and 77 new boutique openings since the end of the prior
year quarter. The comparable sales increase was driven primarily by
increased transactions. In addition, the increase in net sales was
driven by strong growth in our clothing and jewelry categories.
Gross profit, as a percentage of net sales, increased 92 basis
points to 53.37%. The increase was attributable to leverage of
occupancy costs on increased sales.
Selling, general and administrative (SG&A) expenses
increased 20.8% to $21.6 million. As a percentage of net sales,
SG&A decreased 408 basis points to 24.91%, primarily
attributable to leverage on increased sales.
Income from operations for the quarter increased 70.6% to $24.7
million and as a percentage of net sales, increased 500 basis
points to 28.45%.
FULL YEAR RESULTS
Net sales increased 45.2% to $296.4 million. Net sales increases
were driven by a 14.9% comparable boutique sales increase and 77
new boutique openings since the end of the prior year. The
comparable sales increase was driven primarily by increased
transactions.
Net income for 53 weeks ending February 2, 2013 was $47.1
million or $1.05 per diluted share compared to net income for 52
weeks ending January 28, 2012 of $22.5 million, or $0.52 per
diluted share. Adjusted net income for 53 weeks ending February 2,
2013 was $47.7 million, or $1.06 per diluted share, after excluding
$479,000 pretax charges ($291,000 net of tax) related to a
secondary equity offering, $264,000 pretax charges ($160,000 net of
tax) related to stock option acceleration expenses and $342,000
pretax charges ($208,000 net of tax) related to the relocation of
our headquarters and distribution facilities. Adjusted net income
for 52 weeks full year 2011 was $25.2 million, or $0.58 per diluted
share, after excluding charges of $1.6 million pretax ($958,000 net
of tax) related to the early termination of the company's prior
senior secured credit facility, $2.3 million pretax ($1.4 million
net of tax) of option acceleration costs, and $611,000 pretax
($368,000 net of tax) related to a secondary equity offering.
BALANCE SHEET SUMMARY
Total inventories at the end of the quarter increased by $4.6
million to $19.0 million, a 32% increase versus the prior
comparable period. Inventory per boutique increased 4%.
Total cash and cash equivalents at quarter end were $29.9
million at the quarter and year-end compared to $14.0 million in
the prior year period.
FIRST QUARTER AND FULL YEAR 2013 GUIDANCE
For the first quarter ending May 4, 2013, net sales are expected
to be between $79.5 million and $80.5 million assuming a 4%-5%
comparable boutique sales increase on top of the prior year
increase of 15.5% and the opening of approximately 50 additional
new boutiques. Earnings per diluted share are expected to be in the
range of $0.25 to $0.26 an increase of 25.0% to 30.0% over the
prior year diluted earnings per share of $0.20.
For the full fiscal year ending February 1, 2014, net sales are
expected to be in the range of $365.0 million to $370.0 million
assuming a 4% to 5% comparable boutique sales increase and the
opening of 80 new boutiques. Earnings per diluted share are
expected to be in the range of $1.27 to $1.30 and increase of 23.3%
to 26.2% over the 52-week prior year adjusted diluted earnings per
share.
The number of diluted average shares outstanding is expected to
be 44.9 million for both the first quarter and full year. The
effective tax rate is estimated to be 39.3% for both the first
quarter and full year. Capital expenditures are planned in a range
of $22.0 to $25.0 million.
Conference Call Information
A conference call to discuss fourth quarter and fiscal year 2012
results is scheduled for March 19, 2013, at 4:30 p.m. EDT. A live
web cast of the conference call will be available in the investor
relations section of the Company's website, www.francescas.com. In
addition, a replay of the call will be available after the call and
remain available until April 19, 2013. To access the telephone
replay, listeners should dial (877) 870-5176. The access code for
the replay is 5021814. A replay of the web cast will also be
available shortly after the call and will remain on the website for
ninety days.
SEC Regulation G — Non-GAAP Information
This press release includes non-GAAP adjusted net income and
adjusted diluted earnings per share, each a non-GAAP financial
measure. We have reconciled these non-GAAP financial measures with
the most directly comparable GAAP financial measures in the text
above. We believe that these non-GAAP financial measures not only
provide our management with comparable financial data for internal
financial analysis but also provide meaningful supplemental
information to investors. Specifically, these non-GAAP financial
measures allow investors to better understand the performance of
our business and facilitate a meaningful evaluation of our
quarterly and fiscal year 2012 diluted earnings per share and
actual results on a comparable basis with our quarterly and fiscal
year 2011 results. These non-GAAP measures should be considered a
supplement to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP.
Forward-Looking Statements
Certain statements in this release are "forward-looking
statements" made pursuant to the safe-harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements reflect the Company's current
expectations or beliefs concerning future events and are subject to
various risks and uncertainties that may cause actual results to
differ materially from those that we expected. For a discussion of
these and other risks and uncertainties that could cause actual
results to differ materially from those contained in our
forward-looking statements, please refer to "Risk Factors" in our
Annual Report on Form 10-K and our most recent Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission on
March 21, 2012 and December 7, 2012, respectively. We undertake no
obligation to publicly update or revise any forward-looking
statement. Financial schedules are attached to this release.
About Francesca's Holdings Corporation
francesca's® is a growing specialty retailer with retail
locations designed and merchandised to feel like independently
owned, upscale boutiques providing customers a fun and
differentiated shopping experience. The merchandise assortment is a
diverse and balanced mix of apparel, jewelry, accessories and
gifts. francesca's® appeals to the 18-35 year-old, fashion
conscious, female customers, although the Company finds that women
of all ages are attracted to the eclectic and sophisticated
merchandise selection and boutique setting. francesca's® boutiques
carry a broad selection but limited quantities of individual styles
and new merchandise is introduced five days a week. For additional
information on francesca's®, please visit www.francescas.com
The Francesca's Collections logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=15831
| Francesca's Holdings
Corporation |
| Consolidated Statements
of Operations |
| |
|
|
|
|
|
|
|
| |
For the Fourteen
Weeks Ended February 2, 2013 |
For the Thirteen
Weeks Ended January 28, 2012 |
Variance |
| |
In Dollars |
As a % of Net
Sales(1) |
In Dollars |
As a % of Net
Sales(1) |
In Dollars |
% |
As a % of Net
Sales(1) |
| |
(in thousands, except
percentages) |
| Net sales |
$86,700 |
100.00% |
$61,652 |
100.00% |
$25,048 |
40.6% |
0.00% |
| Cost of goods sold and occupancy costs |
40,430 |
46.63% |
29,317 |
47.55% |
11,113 |
37.9% |
(0.92)% |
| Gross profit |
46,270 |
53.37% |
32,335 |
52.45% |
13,935 |
43.1% |
0.92% |
| Selling, general and administrative
expenses |
21,600 |
24.91% |
17,875 |
28.99% |
3,725 |
20.8% |
(4.08)% |
| Income from operations |
24,670 |
28.45% |
14,460 |
23.45% |
10,210 |
70.6% |
5.00% |
| Interest income (expense) |
(125) |
(0.14)% |
(339) |
(0.55)% |
214 |
(63.1)% |
0.41% |
| Other income (expense) |
(27) |
(0.03)% |
36 |
0.06% |
(63) |
(175.0)% |
(0.09)% |
| Income before income tax expense |
24,518 |
28.28% |
14,157 |
22.96% |
10,361 |
73.2% |
5.32% |
| Income tax expense |
9,648 |
11.13% |
5,804 |
9.41% |
3,844 |
66.2% |
1.72% |
| Net income |
$14,870 |
17.15% |
$8,353 |
13.55% |
$6,517 |
78.0% |
3.60% |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Diluted earnings per common share |
$0.33 |
|
$0.19 |
|
|
|
|
| Weighted average diluted shares
outstanding |
44,858 |
|
44,547 |
|
|
|
|
| |
| Comparable boutique sales increase |
9.2% |
|
14.7% |
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Fiscal Year
Ended |
|
|
|
| |
February 2,
2013 |
January 28,
2012 |
Variance |
| |
In Dollars |
As a % of Net
Sales(1) |
In Dollars |
As a % of Net
Sales(1) |
In Dollars |
% |
As a % of Net
Sales(1) |
| |
(in thousands, except
percentages) |
| Net sales |
$296,373 |
100.00% |
$204,158 |
100.00% |
$92,215 |
45.2% |
0.00% |
| Cost of goods sold and occupancy costs |
137,873 |
46.52% |
97,365 |
47.69% |
40,508 |
41.6% |
(1.17)% |
| Gross profit |
158,500 |
53.48% |
106,793 |
52.31% |
51,707 |
48.4% |
1.17% |
| Selling, general and administrative
expenses |
80,560 |
27.18% |
63,262 |
30.99% |
17,298 |
27.3% |
(3.81)% |
| Income from operations |
77,940 |
26.30% |
43,531 |
21.32% |
34,409 |
79.0% |
4.98% |
| Interest income (expense) |
(672) |
(0.23)% |
(4,868) |
(2.38)% |
4,196 |
(86.2)% |
2.15% |
| Loss on early extinguishment of debt |
-- |
0.00% |
(1,591) |
(0.78)% |
1,591 |
(100.0)% |
0.78% |
| Other income (expense) |
230 |
0.08% |
284 |
0.14% |
(54) |
(19.0)% |
(0.06)% |
| Income before income tax expense |
77,498 |
26.15% |
37,356 |
18.30% |
40,142 |
107.5% |
7.85% |
| Income tax expense |
30,437 |
10.27% |
14,855 |
7.28% |
15,582 |
104.9% |
2.99% |
| Net income |
$47,061 |
15.88% |
$22,501 |
11.02% |
$24,560 |
109.2% |
4.86% |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Diluted earnings per share |
$1.05 |
|
$0.52 |
|
|
|
|
| Weighted average diluted shares
outstanding |
44,807 |
|
42,948 |
|
|
|
|
| |
| Comparable boutique sales increase |
14.9% |
|
10.4% |
|
|
|
|
| |
|
|
|
|
|
|
|
| (1) Percentage totals
in the above tables may not equal the sum of the components due to
rounding. |
| |
| Francesca's Holdings
Corporation |
| Consolidated Balance
Sheets |
| (In
thousands) |
| |
|
|
| |
February 2,
2013 |
January 28,
2012 |
| ASSETS |
|
|
| Current assets: |
|
|
| Cash and cash equivalents |
$29,877 |
$14,046 |
| Accounts receivable |
1,925 |
2,156 |
| Inventories |
19,049 |
14,462 |
| Deferred income taxes |
3,506 |
2,352 |
| Prepaid expenses and other
current assets |
4,749 |
3,025 |
| Total current assets |
59,106 |
36,041 |
| Property and equipment, net |
49,559 |
33,199 |
| Deferred income taxes |
2,357 |
952 |
| Other assets, net |
1,573 |
2,120 |
| TOTAL ASSETS |
$112,595 |
$72,312 |
| |
|
|
| LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
| Current liabilities: |
|
|
| Accounts payable |
$7,779 |
$8,627 |
| Accrued liabilities |
10,667 |
9,893 |
| Total current liabilities |
18,446 |
18,520 |
| Deferred and accrued rents |
22,092 |
14,890 |
| Long-term debt |
-- |
22,000 |
| Total liabilities |
40,538 |
55,410 |
| Commitments and contingencies |
|
|
| Shareholders' equity (deficit): |
|
|
| Common stock-$.01 par value,
80.0 million shares authorized, 43.9 million, and
43.5 million shares issued and outstanding at February 2, 2013
and January 28, 2012, respectively |
439 |
435 |
| Additional paid-in capital |
85,161 |
77,071 |
| Accumulated deficit |
(13,543) |
(60,604) |
| Total shareholders' equity |
72,057 |
16,902 |
| TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY |
$112,595 |
$72,312 |
| |
| Francesca's Holdings
Corporation |
| Consolidated Statements
of Cash flows |
| (In
thousands) |
| |
|
|
|
| |
For the Fiscal
Year Ended |
| |
February 2,
2013 |
January 28,
2012 |
January 29,
2011 |
| Cash Flows Provided by Operating
Activities: |
|
|
|
| Net income |
$47,061 |
$22,501 |
$16,895 |
| Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
| Depreciation and
amortization |
7,151 |
4,936 |
2,377 |
| Stock-based compensation
expense |
3,599 |
4,671 |
2,400 |
| Excess tax benefit from
stock-based compensation |
(2,296) |
(449) |
(1,757) |
| Loss on sale of assets |
188 |
23 |
25 |
| Loss on early extinguishment of
debt |
-- |
1,591 |
-- |
| Amortization of debt issuance
costs |
299 |
537 |
158 |
| Deferred income taxes |
(2,559) |
721 |
(2,685) |
| Changes in assets and
liabilities: |
|
|
|
| Accounts receivables |
231 |
1,898 |
(3,557) |
| Inventories |
(4,587) |
(2,593) |
(5,631) |
| Prepaid expenses and other
assets |
(1,512) |
(445) |
(1,499) |
| Accounts payable |
(848) |
2,481 |
3,443 |
| Accrued liabilities |
3,069 |
3,932 |
4,852 |
| Deferred and accrued rents |
7,203 |
6,667 |
5,999 |
| Net cash provided by operating
activities |
56,999 |
46,471 |
21,020 |
| Cash Flows Used in Investing Activities: |
|
|
|
| Purchase of property and
equipment |
(23,663) |
(16,894) |
(16,208) |
| Other |
-- |
36 |
-- |
| Net cash used in investing activities |
(23,663) |
(16,858) |
(16,208) |
| Cash Flows Used in Financing Activities: |
|
|
|
| Proceeds from issuance of stock
in initial public offering, net of costs |
-- |
44,245 |
-- |
| Proceeds from borrowings under
the revolving credit facility |
-- |
41,000 |
-- |
| Proceeds from borrowings under
the senior secured credit facility |
-- |
-- |
95,000 |
| Repayment of borrowings under
the revolving credit facility |
(22,000) |
(19,000) |
-- |
| Repayment of borrowings under
the senior secured credit facility |
-- |
(93,813) |
(1,187) |
| Dividends |
-- |
-- |
(100,000) |
| Payment of debt issuance
costs |
-- |
(1,468) |
(2,137) |
| Proceeds from the exercise of
stock options |
2,199 |
504 |
504 |
| Excess tax benefit from
stock-based compensation |
2,296 |
449 |
1,757 |
| Net cash used in financing activities |
(17,505) |
(28,083) |
(6,063) |
| |
|
|
|
| Net increase (decrease) in cash and cash
equivalents |
15,831 |
1,530 |
(1,251) |
| Cash and cash equivalents, beginning of
year |
14,046 |
12,516 |
13,767 |
| Cash and cash equivalents, end of
year |
$29,877 |
$14,046 |
$12,516 |
| Supplemental Disclosures of Cash Flow
Information: |
|
|
|
| Cash paid for income taxes |
$32,405 |
$8,971 |
$13,509 |
| Interest paid |
448 |
5,569 |
163 |
CONTACT: Investors
ICR, Inc.
Jean Fontana
646-277-1214
Company
Randi Sonenshein, Vice President, Finance and Investor Relations
832-494-2250
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