NASHVILLE, Tenn., Sept. 2, 2021 /PRNewswire/ -- Kirkland's,
Inc. (Nasdaq: KIRK) ("Kirkland's" or the "Company"), a specialty
retailer of home décor and furnishings, announced financial results
for the 13 and 26-week periods ended July
31, 2021.
Second Quarter 2021 Financial Summary vs. Same Year-Ago
Quarter
- Net sales decreased 8.0% to $114.8
million, with 4.5% fewer stores
- Comparable sales decreased 5.2%, including an e-commerce
decrease of 12.6%
- Gross profit margin increased 600 basis points to 34.6%
- Earnings per diluted share increased to $0.04 compared to a loss per diluted share of
$0.66
- Adjusted loss per diluted share was $0.01 compared to an adjusted earnings per
diluted share of $0.02
- EBITDA increased significantly to $5.4
million compared to $0.6
million
- Adjusted EBITDA was $5.1 million,
compared to $6.8 million
- Operating income increased to $0.2
million compared to an operating loss of $5.3 million
- Cash balance of $45.2 million
with no outstanding debt; total liquidity of $110.3 million
- Share repurchases of $12.0
million in the quarter
- Store count at quarter end was 369 stores, with one store
closure
Management Commentary
"The second quarter proved to be another step forward in our
transformation efforts and achieving our long-term financial
targets," said Steve "Woody" Woodward, president and CEO of
Kirkland's. "Despite the expected challenges stemming from
continued constraints in the global supply chain, we made progress
in the areas that we could control and experienced an improvement
in sales during the last month of the quarter with year-over-year
margin gains as a result of our disciplined approach to our cost
structure. This included elevating our merchandising assortment to
drive higher average ticket, continuing to increase our levels of
direct sourcing and further negotiating rent reductions across our
store footprint. These enhancements drove a two-year comparable
same-store sales increase of approximately 5% compared to the same
period in pre-pandemic 2019. In addition, our positive operating
income and earnings during our seasonally softest quarter are a
testament to these accomplishments and others as we work towards
consistent profitability in all four quarters.
"Entering into our historically strongest seasons, harvest and
Christmas, our team will continue to closely monitor our inventory
position and do everything we can to meet customer demand. Although
we believe some level of supply chain constraints will persist, we
still expect to deliver strong same-store sales growth in the range
of mid-single-digits for the second half of the year. We also
remain steadfast in executing upon our overall transformation
strategy. We've been hard at work further optimizing our
merchandising assortment, stabilizing margins and driving
profitable growth with an overarching goal to become a
high-performance specialty home furnishing retailer with quality
products at affordable price points. With a strong financial
position and an efficient infrastructure in place, I have the
utmost confidence in our ability to achieve our goals and drive
shareholder value."
New Share Repurchase Authorization
Kirkland's also announced today that its board of directors has
authorized a new share repurchase plan providing for the purchase
in the aggregate of $20 million of
the Company's outstanding common stock. Repurchases of shares will
be made in accordance with applicable securities laws and may be
made from time to time in the open market or by negotiated
transactions. The amount and timing of repurchases will be based on
a variety of factors, including stock price, regulatory limitations
and other market and economic factors. The share repurchase plan
does not require the Company to repurchase any specific number of
shares, and the Company may terminate the repurchase plan at any
time.
Second Half of 2021 Outlook
For the second half of fiscal 2021, the Company expects to
achieve a mid-single-digit same-store sales increase, primarily
driven by better inventory positions in key categories and
continued growth in average ticket. In addition, the Company
anticipates year-over-year earnings growth despite absorbing
significant incremental freight costs.
Strategic Initiatives and Financial Targets
Kirkland's key strategic initiatives include:
- Accelerating product development to reinforce quality and
relevancy as the Company continues its transformation into a
specialty retailer where customers are able to furnish their entire
home on a budget;
- Bolstering its omni-channel strategy via website enhancements,
more focused marketing spend, an expanded online assortment, and an
improved in-store experience;
- Improving the customer experience with the Company's
re-launched loyalty program, extended credit options and broadened
delivery options; and
- Utilizing its leaner infrastructure to be nimbler to changes in
consumer preference and buying behaviors.
Kirkland's annual financial targets include:
- Comparable sales growth, driven by e-commerce, merchandise
improvements and brick-and-mortar store productivity. The
Company expects e-commerce to continue to grow as a percent of its
total business to over 50% of sales. The Company also intends to
focus on improving the contribution of its remaining store base,
which is an integral part of its omni-channel strategy and supports
improved profitability of its e-commerce sales.
- Increasing gross margin by continuing with the Company's
current discipline of limited promotional offers, expanding direct
sourcing, improving supply chain efficiency and reducing occupancy
costs. With improved merchandise quality and to support a
better customer experience, the Company will continue to move
towards more targeted promotions. Direct sourcing is expected to
increase from approximately 20% of purchases in 2020 to 70% by
2025. With these improvements, continued efficiencies in the
Company's supply chain and lower occupancy costs, Kirkland's goal
is to improve its annual gross profit margin to a mid-to-high 30%
range over the next one-to-two years.
- Improving profitability by leveraging the leaner
infrastructure with comparable sales growth. The Company
believes its ideal store count should be approximately 350 stores
with additional opportunities for more favorable rent terms during
ongoing lease renewals. With approximately $45 million in annualized operating expenses
eliminated from the business in 2020, the Company expects annual
EBITDA as a percent of sales to be in the low-to-mid double-digit
range in the next one-to-two years and annual operating income as a
percentage of sales to be in the high-single-digit range in the
next one-to-two years.
- Maintaining adequate liquidity and generating free cash flow
while continuing to invest in key strategic initiatives and
returning excess cash to Kirkland's shareholders.
The key strategic initiatives and financial targets are based on
current information as of September 2,
2021, and are dependent on, among other things, consumer
preferences, economic conditions and Kirkland's own successful
execution of these initiatives. The information on which these
initiatives and financial targets is based is subject to change,
and investors are cautioned that the Company may update the
initiatives and targets, or any portion thereof, at any time for
any reason.
Investor Conference Call and Web Simulcast
Kirkland's will hold its earnings call for the second quarter
later today at 9:00 a.m. ET. Participating on the call will be
Steve Woodward, president and CEO,
and Nicole Strain, CFO. The number
to call for the interactive teleconference is (412) 542-4163.
A replay of the conference call will be available through
Thursday, September 9, 2021 by
dialing (412) 317-0088 and entering the confirmation number
10159518.
A live webcast of Kirkland's quarterly conference call will be
available online here and on the Company's Investor Relations Page,
beginning at 9:00 a.m. ET. The online replay will follow
shortly after the call and continue for one year.
About Kirkland's, Inc.
Kirkland's, Inc. is a specialty retailer of home décor in
the United States, currently
operating 369 stores in 35 states as well as an e-commerce website,
www.kirklands.com. The Company's stores present a curated selection
of distinctive merchandise, including holiday décor, furniture,
textiles, wall décor, decorative accessories, art, mirrors,
fragrances, and other home decorating items. The Company's stores
offer an extensive assortment of holiday merchandise during
seasonal periods. The Company provides its customers an engaging
shopping experience characterized by affordable home décor and
inspirational design ideas. This combination of quality and stylish
merchandise, value pricing and a stimulating online and store
experience allow customers to furnish their home on a budget. More
information can be found at www.kirklands.com.
Forward-Looking Statements
Except for historical information contained herein, the
statements in this release, including all statements related to
future initiatives, financial goals and expectations or beliefs
regarding any future period, are forward-looking and made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and are subject to the finalization of the
Company's quarterly financial and accounting procedures.
Forward-looking statements involve known and unknown risks and
uncertainties, which may cause Kirkland's actual results to differ
materially from forecasted results. Those risks and uncertainties
include, among other things, risks associated with the Company's
progress and anticipated progress towards its long-term objective
and the success of its plans in response to the novel coronavirus
("COVID-19") pandemic, the spread of COVID-19 and its impact on the
Company's revenues and supply chain, risks associated with COVID-19
and the governments responses to it, the impact of store closures,
the effectiveness of the Company's marketing campaigns, risks
related to changes in U.S. policy related to imported merchandise,
particularly with regard to the impact of tariffs on goods imported
from China and strategies
undertaken to mitigate such impact, the Company's ability to retain
its senior management team, continued volatility in the price of
the Company's common stock, the competitive environment in the home
décor industry in general and in Kirkland's specific market areas,
inflation, fluctuations in cost and availability of inventory,
interruptions in supply chain and distribution systems, including
our e-commerce systems and channels, the ability to control
employment and other operating costs, availability of suitable
retail locations and other growth opportunities, disruptions in
information technology systems including the potential for security
breaches of Kirkland's or its customers' information, seasonal
fluctuations in consumer spending, and economic conditions in
general. Those and other risks are more fully described in
Kirkland's filings with the Securities and Exchange Commission,
including the Company's Annual Report on Form 10-K filed
on March 26, 2021 and subsequent
reports. Forward-looking statements included in this release are
made as of the date of this release. Any changes in assumptions or
factors on which such statements are based could produce materially
different results. Kirkland's disclaims any obligation to update
any such factors or to publicly announce results of any revisions
to any of the forward-looking statements contained herein to
reflect future events or developments.
Contact:
|
Kirkland's
|
Gateway Investor
Relations
|
|
Nicole
Strain
|
Cody Slach and Cody
Cree
|
|
(615)
872-4800
|
KIRK@gatewayir.com
|
|
|
(949)
574-3860
|
KIRKLAND'S,
INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS
OF OPERATIONS
(In thousands, except per share data)
|
|
|
|
13-Week Period
Ended
|
|
|
|
July
31,
|
|
|
August
1,
|
|
|
|
2021
|
|
|
2020
|
|
Net sales
|
|
$
|
114,790
|
|
|
$
|
124,722
|
|
Cost of
sales
|
|
|
75,092
|
|
|
|
89,002
|
|
Gross
profit
|
|
|
39,698
|
|
|
|
35,720
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
21,664
|
|
|
|
20,236
|
|
Other operating
expenses
|
|
|
16,181
|
|
|
|
13,594
|
|
Depreciation
(exclusive of depreciation included in cost of sales)
|
|
|
1,630
|
|
|
|
1,569
|
|
Asset
impairment
|
|
|
—
|
|
|
|
5,666
|
|
Total operating
expenses
|
|
|
39,475
|
|
|
|
41,065
|
|
Operating income
(loss)
|
|
|
223
|
|
|
|
(5,345)
|
|
Other expense,
net
|
|
|
1
|
|
|
|
103
|
|
Income (loss) before
income taxes
|
|
|
222
|
|
|
|
(5,448)
|
|
Income tax (benefit)
expense
|
|
|
(404)
|
|
|
|
3,915
|
|
Net income
(loss)
|
|
$
|
626
|
|
|
$
|
(9,363)
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.04
|
|
|
$
|
(0.66)
|
|
Diluted
|
|
$
|
0.04
|
|
|
$
|
(0.66)
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,163
|
|
|
|
14,123
|
|
Diluted
|
|
|
15,161
|
|
|
|
14,123
|
|
KIRKLAND'S,
INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS
OF OPERATIONS
(In thousands, except per share data)
|
|
|
|
26-Week Period
Ended
|
|
|
|
July
31,
|
|
|
August
1,
|
|
|
|
2021
|
|
|
2020
|
|
Net sales
|
|
$
|
238,359
|
|
|
$
|
201,969
|
|
Cost of
sales
|
|
|
158,406
|
|
|
|
156,013
|
|
Gross
profit
|
|
|
79,953
|
|
|
|
45,956
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
40,777
|
|
|
|
38,814
|
|
Other operating
expenses
|
|
|
33,346
|
|
|
|
28,161
|
|
Depreciation
(exclusive of depreciation included in cost of sales)
|
|
|
3,243
|
|
|
|
3,070
|
|
Asset
impairment
|
|
|
310
|
|
|
|
8,850
|
|
Total operating
expenses
|
|
|
77,676
|
|
|
|
78,895
|
|
Operating income
(loss)
|
|
|
2,277
|
|
|
|
(32,939)
|
|
Other expense,
net
|
|
|
6
|
|
|
|
203
|
|
Income (loss) before
income taxes
|
|
|
2,271
|
|
|
|
(33,142)
|
|
Income tax
benefit
|
|
|
(74)
|
|
|
|
(16,341)
|
|
Net income
(loss)
|
|
$
|
2,345
|
|
|
$
|
(16,801)
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.16
|
|
|
$
|
(1.20)
|
|
Diluted
|
|
$
|
0.15
|
|
|
$
|
(1.20)
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,229
|
|
|
|
14,057
|
|
Diluted
|
|
|
15,298
|
|
|
|
14,057
|
|
KIRKLAND'S,
INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
|
|
|
|
July
31,
|
|
|
January
30,
|
|
|
August
1,
|
|
|
|
2021
|
|
|
2021
|
|
|
2020
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
45,248
|
|
|
$
|
100,337
|
|
|
$
|
27,565
|
|
Inventories,
net
|
|
|
92,017
|
|
|
|
62,083
|
|
|
|
77,078
|
|
Income taxes
receivable
|
|
|
774
|
|
|
|
162
|
|
|
|
6,162
|
|
Prepaid expenses and
other current assets
|
|
|
8,005
|
|
|
|
8,116
|
|
|
|
8,467
|
|
Total current
assets
|
|
|
146,044
|
|
|
|
170,698
|
|
|
|
119,272
|
|
Property and
equipment, net
|
|
|
56,332
|
|
|
|
63,410
|
|
|
|
72,676
|
|
Operating lease
right-of-use assets
|
|
|
136,381
|
|
|
|
147,334
|
|
|
|
165,393
|
|
Other
assets
|
|
|
6,368
|
|
|
|
5,670
|
|
|
|
5,925
|
|
Total
assets
|
|
$
|
345,125
|
|
|
$
|
387,112
|
|
|
$
|
363,266
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
50,890
|
|
|
$
|
55,173
|
|
|
$
|
36,890
|
|
Accrued
expenses
|
|
|
30,895
|
|
|
|
37,454
|
|
|
|
29,056
|
|
Operating lease
liabilities
|
|
|
42,772
|
|
|
|
44,973
|
|
|
|
49,034
|
|
Total current
liabilities
|
|
|
124,557
|
|
|
|
137,600
|
|
|
|
114,980
|
|
Operating lease
liabilities
|
|
|
129,985
|
|
|
|
148,976
|
|
|
|
180,180
|
|
Other
liabilities
|
|
|
5,981
|
|
|
|
5,614
|
|
|
|
7,294
|
|
Total
liabilities
|
|
|
260,523
|
|
|
|
292,190
|
|
|
|
302,454
|
|
Net
shareholders' equity
|
|
|
84,602
|
|
|
|
94,922
|
|
|
|
60,812
|
|
Total liabilities and
shareholders' equity
|
|
$
|
345,125
|
|
|
$
|
387,112
|
|
|
$
|
363,266
|
|
KIRKLAND'S,
INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS
(In thousands)
|
|
|
|
26-Week Period
Ended
|
|
|
|
July
31,
|
|
|
August
1,
|
|
|
|
2021
|
|
|
2020
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
2,345
|
|
|
$
|
(16,801)
|
|
Adjustments to
reconcile net income (loss) to net cash (used in) provided by
operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization of property and equipment
|
|
|
10,486
|
|
|
|
11,986
|
|
Amortization of debt
issue costs
|
|
|
46
|
|
|
|
48
|
|
Asset
impairment
|
|
|
310
|
|
|
|
8,850
|
|
Loss (gain) on
disposal of property and equipment
|
|
|
5
|
|
|
|
(28)
|
|
Stock-based
compensation expense
|
|
|
883
|
|
|
|
636
|
|
Deferred income
taxes
|
|
|
—
|
|
|
|
1,525
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
Inventories,
net
|
|
|
(29,934)
|
|
|
|
17,596
|
|
Prepaid expenses and
other current assets
|
|
|
111
|
|
|
|
(2,005)
|
|
Accounts
payable
|
|
|
(4,619)
|
|
|
|
(21,608)
|
|
Accrued
expenses
|
|
|
(4,648)
|
|
|
|
315
|
|
Income taxes
receivable
|
|
|
(2,523)
|
|
|
|
(5,951)
|
|
Operating lease assets
and liabilities
|
|
|
(9,837)
|
|
|
|
8,683
|
|
Other assets and
liabilities
|
|
|
(779)
|
|
|
|
(414)
|
|
Net cash (used in)
provided by operating activities
|
|
|
(38,154)
|
|
|
|
2,832
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Proceeds from sale of
property and equipment
|
|
|
15
|
|
|
|
154
|
|
Capital
expenditures
|
|
|
(3,402)
|
|
|
|
(5,560)
|
|
Net cash used in
investing activities
|
|
|
(3,387)
|
|
|
|
(5,406)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Borrowings on
revolving line of credit
|
|
|
—
|
|
|
|
40,000
|
|
Repayments on
revolving line of credit
|
|
|
—
|
|
|
|
(40,000)
|
|
Refinancing
costs
|
|
|
—
|
|
|
|
(15)
|
|
Cash used in net
share settlement of stock options and restricted stock
|
|
|
(330)
|
|
|
|
(13)
|
|
Proceeds received
from employee stock option exercises
|
|
|
146
|
|
|
|
—
|
|
Employee stock
purchases
|
|
|
—
|
|
|
|
35
|
|
Repurchase and
retirement of common stock
|
|
|
(13,364)
|
|
|
|
—
|
|
Net cash (used in)
provided by financing activities
|
|
|
(13,548)
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
|
|
Net
decrease
|
|
|
(55,089)
|
|
|
|
(2,567)
|
|
Beginning of the
period
|
|
|
100,337
|
|
|
|
30,132
|
|
End of the
period
|
|
$
|
45,248
|
|
|
$
|
27,565
|
|
|
|
|
|
|
|
|
|
|
Supplemental
schedule of non-cash activities:
|
|
|
|
|
|
|
|
|
Non-cash accruals for
purchases of property and equipment
|
|
$
|
732
|
|
|
$
|
838
|
|
Non-GAAP Financial Measures
To supplement our unaudited consolidated condensed financial
statements presented in accordance with generally accepted
accounting principles ("GAAP"), this earnings release and the
related earnings conference call contain certain non-GAAP financial
measures, including EBITDA, adjusted EBITDA, adjusted operating
(loss) income, adjusted net (loss) income and adjusted diluted
(loss) earnings per share. These measures are not in accordance
with, and are not intended as alternatives to, GAAP financial
measures. The Company uses these non-GAAP financial measures
internally in analyzing our financial results and believes that
they provide useful information to analysts and investors, as a
supplement to GAAP financial measures, in evaluating our
operational performance.
The Company defines EBITDA as net income or loss before
interest, provision for income tax, and depreciation and
amortization, adjusted EBITDA as EBITDA with non-GAAP adjustments
and adjusted operating (loss) income as operating income (loss)
with non-GAAP adjustments. The Company defines adjusted net (loss)
income and adjusted diluted (loss) earnings per share by adjusting
the applicable GAAP financial measures for non-GAAP
adjustments.
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meanings prescribed
by GAAP. Use of these terms may differ from similar measures
reported by other companies. Each non-GAAP financial measure has
its limitations as an analytical tool, and you should not consider
them in isolation or as a substitute for analysis of the Company's
results as reported under GAAP.
The following table shows a reconciliation of operating income
(loss) to EBITDA, adjusted EBITDA and adjusted operating (loss)
income for the 13 week and 26 week periods ended July 31, 2021 and August
1, 2020 and a reconciliation of net income (loss) and
diluted earnings (loss) per share to adjusted net (loss) income and
adjusted diluted (loss) earnings per share for the 13 week and 26
week periods ended July 31, 2021 and
August 1, 2020:
KIRKLAND'S,
INC.
UNAUDITED NON-GAAP MEASURE RECONCILIATION
(In thousands, except per share data)
|
|
|
|
13-Week Period
Ended
|
|
|
26-Week Period
Ended
|
|
|
|
July 31,
2021
|
|
|
August 1,
2020
|
|
|
July 31,
2021
|
|
|
August 1,
2020
|
|
Operating income
(loss)
|
|
$
|
223
|
|
|
$
|
(5,345)
|
|
|
$
|
2,277
|
|
|
$
|
(32,939)
|
|
Depreciation and
amortization
|
|
|
5,214
|
|
|
|
5,933
|
|
|
|
10,486
|
|
|
|
11,986
|
|
EBITDA
|
|
|
5,437
|
|
|
|
588
|
|
|
|
12,763
|
|
|
|
(20,953)
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed store and lease
termination costs in cost of sales(1)
|
|
|
(1,017)
|
|
|
|
95
|
|
|
|
(1,506)
|
|
|
|
58
|
|
Asset
impairment(2)
|
|
|
—
|
|
|
|
5,666
|
|
|
|
310
|
|
|
|
8,850
|
|
Stock-based
compensation expense(3)
|
|
|
651
|
|
|
|
329
|
|
|
|
883
|
|
|
|
636
|
|
Severance
charges(4)
|
|
|
11
|
|
|
|
85
|
|
|
|
291
|
|
|
|
880
|
|
Other costs included
in operating expenses(5)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
134
|
|
Total adjustments in
operating expenses
|
|
|
662
|
|
|
|
6,080
|
|
|
|
1,484
|
|
|
|
10,500
|
|
Total non-GAAP
adjustments
|
|
|
(355)
|
|
|
|
6,175
|
|
|
|
(22)
|
|
|
|
10,558
|
|
Adjusted
EBITDA
|
|
|
5,082
|
|
|
|
6,763
|
|
|
|
12,741
|
|
|
|
(10,395)
|
|
Depreciation and
amortization
|
|
|
5,214
|
|
|
|
5,933
|
|
|
|
10,486
|
|
|
|
11,986
|
|
Adjusted operating
(loss) income
|
|
$
|
(132)
|
|
|
$
|
830
|
|
|
$
|
2,255
|
|
|
$
|
(22,381)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
626
|
|
|
$
|
(9,363)
|
|
|
$
|
2,345
|
|
|
$
|
(16,801)
|
|
Non-GAAP adjustments,
net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed store and lease
termination costs in cost of sales(1)
|
|
|
(771)
|
|
|
|
73
|
|
|
|
(1,139)
|
|
|
|
45
|
|
Asset
impairment(2)
|
|
|
—
|
|
|
|
4,378
|
|
|
|
234
|
|
|
|
6,805
|
|
Stock-based
compensation expense, including tax impact(3)
|
|
|
78
|
|
|
|
391
|
|
|
|
150
|
|
|
|
886
|
|
Severance
charges(4)
|
|
|
9
|
|
|
|
71
|
|
|
|
220
|
|
|
|
677
|
|
Other costs included
in operating expenses(5)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
103
|
|
Total adjustments in
operating expenses
|
|
|
87
|
|
|
|
4,840
|
|
|
|
604
|
|
|
|
8,471
|
|
Tax valuation
allowance(6)
|
|
|
(36)
|
|
|
|
3,274
|
|
|
|
(110)
|
|
|
|
5,470
|
|
CARES Act - net
operating loss carry back(7)
|
|
|
—
|
|
|
|
1,490
|
|
|
|
—
|
|
|
|
(14,596)
|
|
Total non-GAAP
adjustments, net of tax
|
|
|
(720)
|
|
|
|
9,677
|
|
|
|
(645)
|
|
|
|
(610)
|
|
Adjusted net (loss)
income
|
|
$
|
(94)
|
|
|
$
|
314
|
|
|
$
|
1,700
|
|
|
$
|
(17,411)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
$
|
0.04
|
|
|
$
|
(0.66)
|
|
|
$
|
0.15
|
|
|
$
|
(1.20)
|
|
Adjusted diluted
(loss) earnings per share
|
|
$
|
(0.01)
|
|
|
$
|
0.02
|
|
|
$
|
0.11
|
|
|
$
|
(1.24)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
|
|
15,161
|
|
|
|
14,123
|
|
|
|
15,298
|
|
|
|
14,057
|
|
Adjusted diluted
weighted average shares outstanding
|
|
|
14,163
|
|
|
|
14,741
|
|
|
|
15,298
|
|
|
|
14,057
|
|
|
|
(1)
|
Costs associated with
closed stores and lease termination costs, including gains on lease
terminations, amounts paid to third parties for rent reduction
negotiations and lease termination fees paid to landlords for store
closings.
|
(2)
|
Impairment charges
include both right-of-use asset and property and equipment
impairment charges.
|
(3)
|
Stock-based
compensation expense includes amounts expensed related to equity
incentive plans.
|
(4)
|
Severance charges
include expenses related to severance agreements. This also
includes permanent store closure compensation costs.
|
(5)
|
Other costs include
lease negotiation fees associated with corporate rent
reduction.
|
(6)
|
To remove the impact
of the change in the Company's valuation allowance against deferred
tax assets.
|
(7)
|
To remove the impact
of the income tax benefit recorded in fiscal 2020 related to the
carry back of fiscal 2019 and estimated fiscal 2020 federal net
operating losses to prior periods as permitted under the
Coronavirus Aid, Relief and Economic Security Act.
|
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SOURCE Kirkland's, Inc.