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EX-99.2 - EX-99.2 - TALBOTS INC | b87999exv99w2.htm |
8-K - FORM 8-K - TALBOTS INC | b87999e8vk.htm |
Exhibit 99.1
TALBOTS REPORTS SECOND QUARTER FISCAL 2011 RESULTS
HINGHAM, MA, September 7, 2011 The Talbots, Inc. (NYSE:TLB) today reported results for the
quarter ended July 30, 2011 and commented on key initiatives and actions as well as third quarter
2011.
Second quarter loss from continuing operations was $37.4 million, or $0.54 per share, compared
to last years income from continuing operations of $0.5 million or $0.01 per share.
Adjusted second quarter loss from continuing operations was $35.5 million, or $0.51 per share,
excluding special items of $1.9 million, or $0.03 per share, compared to last years adjusted
income from continuing operations of $9.8 million, or $0.14 per share. A full reconciliation of
GAAP to non-GAAP (adjusted) results is included with this release.
Trudy F. Sullivan, Talbots President and Chief Executive Officer, commented, As expected, our
second quarter results reflect high levels of promotional and markdown activity. While we remain
confident in our long-term strategic direction, in the near-term we are focused on delivering a
more compelling, balanced merchandise assortment and driving improved top-line sales. We announced
separately this morning that we have made a change in our leadership team with respect to the
oversight of creative and design which we believe will facilitate improvements to the direction of
our merchandise and our overall brand positioning.
Second Quarter 2011 Operating Results:
| Operating loss was approximately $34.0 million, compared to prior years operating income of $8.7 million. | ||
| Adjusted operating loss, excluding special items of $1.9 million, was $32.1 million, a decrease of $44.6 million, compared to prior years adjusted operating income of $12.5 million. | ||
| Net sales decreased 9.9% to $271.1 million, compared to $300.7 million in the same period last year. | ||
| Consolidated comparable sales decreased 10.4%, which includes Internet, catalog and red-line sales. Consolidated comparable sales exclude stores scheduled to close under the Companys store rationalization plan. | ||
| Store sales decreased 9.1% to $228.0 million, compared to $250.8 million in the same period last year. Comparable store sales decreased 11.1% in the second quarter of 2011, excluding stores scheduled to close under the Companys store rationalization plan. | ||
| Direct marketing sales, including Internet, catalog and red-line, decreased 13.6% in the quarter to $43.1 million, compared to $49.9 million in the same period last year. |
| Cost of sales, buying and occupancy as a percent of net sales increased 1,150 basis points to 76.6% compared to 65.1% last year. This increase was due to a 950 basis point deterioration in merchandise margin, resulting from higher levels of markdown and promotional activity, as well as a 200 basis point deterioration in buying and occupancy costs as a percent of net sales. | ||
| Selling, general & administrative (SG&A) expenses as a percent of net sales increased 460 basis points to 35.6%, reflecting a $3.3 million increase in SG&A expenses over the prior year period. This dollar increase was due primarily to an increase in marketing spend over last year and a decrease in finance charge income from Talbots credit card compared to the prior year period. | ||
| Total inventory increased 25.8% to $163.9 million, compared to $130.3 million in the same period last year, due mainly to lower than anticipated sales volume and the earlier timing of fall receipts compared to a year ago. | ||
| Total outstanding debt was $83.9 million, an increase of $46.5 million compared to $37.4 million in the same period last year. | ||
| In the second quarter, the Company opened 7 Talbots upscale outlets, closed 9 Talbots stores and ended the period with 566 stores, including 39 Talbots upscale outlet stores. |
First Half of Fiscal 2011 Operating Results:
| Loss from continuing operations for the twenty-six weeks ended July 30, 2011 was $36.4 million, or $0.53 per share, compared to last years loss from continuing operations of $6.6 million, or $0.10 per share. | ||
| Adjusted loss from continuing operations for the twenty-six week period ended July 30, 2011, excluding special items of $6.3 million, or $0.09 per share, was $30.1 million, or $0.44 per share, compared to last years adjusted income from continuing operations of $31.5 million, or $0.50 per share. | ||
| Operating loss was $30.9 million, a decrease of $42.5 million, compared to prior years operating income of $11.6 million. | ||
| Adjusted operating loss, excluding special items of $6.3 million, was $24.5 million, a decrease of $68.7 million, compared to prior years adjusted operating income of $44.1 million. | ||
| For the twenty-six week period, total net sales decreased 7.9% to $572.4 million, compared to $621.4 million in the same period last year. | ||
| Consolidated comparable sales decreased 8.9%, which includes Internet, catalog and red-line sales. Consolidated comparable sales exclude stores scheduled to close under the Companys store rationalization plan. | ||
| Store sales decreased 7.8% to $468.8 million, compared to $508.4 million in the same period last year. Comparable store sales decreased 9.6% for the twenty-six week period. |
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| Direct marketing sales decreased 8.2% for the twenty-six week period to $103.6 million, compared to last years sales of $113.0 million. |
Key Initiatives Update:
Store Rationalization Plan
The Company closed 9 stores during the second quarter and has closed 15 in the first six
months of the fiscal year as part of its accelerated store rationalization plan. The Company
expects to close approximately 110 stores in total, including 15 to 20 consolidations, through
fiscal 2013. Approximately 83 stores are expected to close in fiscal 2011, approximately 25 stores
are planned for closure in fiscal 2012 and approximately two stores are planned to close in fiscal
2013.
The 110 stores that have closed or are planned for closure contributed approximately $24.2
million in sales and $1.4 million in operating loss in the second quarter of 2011, including $1.0
million in restructuring charges. This compares to last years second quarter contribution of
approximately $22.8 million in sales and approximately $1.6 million in operating income. There were
no restructuring charges attributable to these stores in the second quarter of 2010.
Capital and Expense Management
As an extension of the existing strategic partnership with Li & Fung, the Companys exclusive
global apparel sourcing agent, Talbots has entered into an arrangement under which the Company will
have the ability to extend payment terms for an additional 30 days for merchandise purchases
sourced by Li & Fung up to $50 million at any time. Beginning September 1, 2011, this arrangement
is expected to remain in effect through February 2012, with an option to renew for an additional
six months, subject to the approval of both parties. In connection with this exclusive sourcing
arrangement, Li & Fung will also open letters of credit on behalf of Talbots for certain of its
future merchandise purchases.
Additionally, the Company has reduced its expected capital expenditures for fiscal 2011 to
approximately $47 million, versus its previously planned $60 million. Talbots will also maintain
close scrutiny of operating costs and will continue to pursue opportunities to lower expenses.
These actions have been implemented as part of the Companys actions to enhance its working
capital, improve its cost structure and increase its financial flexibility.
Third Quarter 2011 Comments
Third quarter-to-date sales and customer traffic continue to trend negative, with top-line
sales to date down approximately 8% compared to the same period last year. The Company expects high
levels of promotional and markdown activity to continue throughout the third quarter, resulting in
an expected increase in cost of sales, buying and occupancy as a percent of net sales of
approximately 600 to 800 basis points compared to the same period last year. Selling, general and
administrative expenses on a dollar basis are expected to decrease slightly compared
3
to the prior year third quarter, including planned incremental marketing investments offset by
cost reductions in other areas.
Ms. Sullivan concluded, While sales quarter-to-date remain under pressure, thus far in
September our sales trends have meaningfully improved versus August and we are seeing better
performance in those key merchandise categories where we focused on making adjustments to the
product design. Looking ahead to the back half of the year, we anticipate challenging market
conditions may persist given the uncertain economic environment and inflationary pressures.
However, we continue to be focused on our key strategic initiatives and are taking aggressive
action to execute against our long-term plan.
The above outlook is based on the Companys internal assumptions and estimates, is subject to
its accompanying forward-looking statement and is not a guarantee of future performance or
financial condition.
Conference Call Details
As previously announced, Talbots will host a conference call today September 7, 2011, at 10:00
a.m. local time to discuss second quarter 2011 results. To listen to the live call, please dial
(866) 336-2423, passcode TLB or log on to www.thetalbotsinc.com/ir/ir.asp. The call will be
archived on its web site www.thetalbotsinc.com for a period of twelve months. In addition, an
audio replay of the call will be available shortly after its conclusion and archived through
September 9, 2011. This archived call may be accessed by dialing (855) 859-2056; passcode
90524899.
The Talbots, Inc. is a leading specialty retailer and direct marketer of womens apparel,
shoes and accessories. At the end of the second quarter 2011, the Company operated 566 Talbots
stores in 46 states and Canada. Talbots brand on-line shopping site is located at www.talbots.com.
CONTACT:
|
The Talbots, Inc. | |
Julie Lorigan | ||
Senior Vice President, Investor and Media Relations | ||
(781) 741-7775 | ||
FD | ||
Leigh Parrish, Evan Goetz | ||
Investor and Media Relations | ||
(212) 850-5651, (212) 850-5639 |
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Forward-looking Information
This Press Release contains forward-looking information within the meaning of The Private
Securities Litigation Reform Act of 1995. These statements may be identified by such
forward-looking terminology as expect, achieve, plan, look, projected, believe,
anticipate, outlook, will, would, should, intend, potential or similar statements or
variations of such terms. All of the information concerning our future liquidity, future net sales,
margins and other future financial performance and results, achievement of operating plan or
forecasts for future periods, sources and availability of credit and liquidity, future cash flows
and cash needs, success and results of strategic initiatives and other future financial performance
or financial position, as well as our assumptions underlying such information, constitute
forward-looking information. Our forward-looking statements are based on a series of expectations,
assumptions, estimates and projections about the Company, are not guarantees of future results or
performance and involve substantial risks and uncertainty, including assumptions and projections
concerning our internal operating plan, regular-price, promotional and markdown selling, operating
cash flows, liquidity and sources and availability of credit for all forward periods. Our business
and our forward-looking statements involve substantial known and unknown risks and uncertainties,
including the following risks and uncertainties:
| the ability to successfully increase our customer traffic and the success and customer acceptance of our merchandise offerings in our stores, on our website and in our catalogs; | |
| the risks associated with our efforts to successfully implement, adjust as appropriate and achieve the benefits of our current strategic initiatives including store segmentation, store re-imaging, store rationalization, enhanced marketing, information technology reinvestments, upscale outlet expansion and any other future initiatives that we may undertake; | |
| the ability to achieve our operating plan and strategic plan for operating results, working capital and cash flows; | |
| the ability to access on satisfactory terms, or at all, adequate financing and other sources of liquidity, as and when necessary, to fund our continuing operations, working capital needs, strategic initiatives and other cash needs, and to obtain further increases in our Credit Facility or obtain other or additional credit facilities or other internal or external liquidity sources if cash flows from operations or other capital resources are not sufficient for our cash requirements at any time or times; | |
| the satisfaction of all borrowing conditions under our Credit Facility including accuracy of all representations and warranties, no defaults or events of default, absence of material adverse effect or change and all other borrowing conditions; | |
| the risks associated with our efforts to maintain our traditional customer and expand to attract new customers; | |
| the risks associated with competitive pricing pressures and the current increased promotional environment; |
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| the risks associated with our on-going efforts to adequately manage the increase in various input costs, including increases in the price of raw materials, higher labor costs in countries of manufacture and any significant increases in the price of fuel, which impacts our freight costs; | |
| the continuing material impact of the U.S. economic environment on our business, continuing operations, liquidity and financial results, including any negative impact on consumer discretionary spending, substantial loss of household wealth and savings and continued high unemployment levels; | |
| the ability to continue to purchase merchandise on open account purchase terms at existing or future expected levels and with acceptable payment terms and the risk that suppliers could require earlier or immediate payment or other security due to any payment concerns; | |
| the ability to attract and retain talented and experienced executives that are necessary to execute our strategic initiatives; | |
| the ability to accurately estimate and forecast future regular-price, promotional and markdown selling and other future financial results and financial position; | |
| the risks associated with our appointment of an exclusive global merchandise buying agent, including that the anticipated benefits and cost savings from this arrangement may not be realized or may take longer to realize than expected and the risk that upon any cessation of the relationship, for any reason, we would be unable to successfully transition to an internal or other external sourcing function; | |
| the risks and uncertainties in connection with any need to source merchandise from alternate vendors; | |
| any impact to or disruption in our supply of merchandise; | |
| the ability to successfully execute, fund and achieve the expected benefits of our supply chain initiatives; | |
| any significant interruption or disruption in the operation of our distribution facility or the domestic and international transportation infrastructure; | |
| the risk that estimated or anticipated costs, charges and liabilities to settle and complete the transition and exit from and disposal of the J. Jill business, including both retained obligations and contingent risk for assigned obligations, may materially differ from or be materially greater than anticipated; | |
| any future store closings and the success of and necessary funding for closing underperforming stores; | |
| the ability to reduce spending as needed; | |
| any negative publicity concerning the specialty retail business in general or our business in particular; | |
| the risk of impairment of goodwill and other intangible or long-lived assets; |
| the risk associated with our efforts in transforming our information technology systems to meet our changing business systems and operations; |
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| the risks associated with any further decline in our stock price, including satisfaction of NYSE continued listing criteria which requires the average closing price of our common stock to be greater than $1.00 over 30 consecutive trading days and minimum levels of market capitalization; and |
| the risks and uncertainties associated with the outcome of current and future litigation, claims, tax audits and tax and other proceedings and the risk that actual liabilities, assessments or other financial impact will exceed any estimated, accrued or expected amounts or outcomes. |
All of our forward-looking statements are as of the date of this Press Release only. In each
case, actual results may differ materially from such forward-looking information. We can give no
assurance that such expectations or forward-looking statements will prove to be correct. An
occurrence of or any material adverse change in one or more of the risk factors or risks and
uncertainties referred to in this Press Release or included in our other public disclosures or our
other periodic reports or other documents or filings filed with or furnished to the SEC could
materially and adversely affect our continuing operations and our future financial results, cash
flows, available credit, prospects and liquidity. Except as required by law, we do not undertake or
plan to update or revise any such forward-looking statements to reflect actual results, changes in
plans, assumptions, estimates or projections or other circumstances affecting such forward-looking
statements occurring after the date of this Press Release, even if such results, changes or
circumstances make it clear that any forward-looking information will not be realized. Any public
statements or disclosures by us following this Press Release which modify or impact any of the
forward-looking statements contained in this Press Release will be deemed to modify or supersede
such statements in this Press Release.
In addition to the information set forth in this Press Release, you should carefully consider
the risk factors and risks and uncertainties included in our Annual Report on Form 10-K for the
fiscal year ended January 29, 2011 and other periodic reports filed with the SEC.
7
THE TALBOTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Amounts in thousands except per share data
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Amounts in thousands except per share data
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
July 30, | July 31, | July 30, | July 31, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net sales |
$ | 271,092 | $ | 300,742 | $ | 572,402 | $ | 621,403 | ||||||||
Costs and expenses |
||||||||||||||||
Cost of sales, buying and occupancy |
207,702 | 195,777 | 401,667 | 376,622 | ||||||||||||
Selling, general and administrative |
96,411 | 93,075 | 196,222 | 201,214 | ||||||||||||
Restructuring charges |
1,005 | 112 | 3,270 | 5,071 | ||||||||||||
Impairment of store assets |
| | 1,217 | 6 | ||||||||||||
Merger-related costs |
| 3,050 | 885 | 26,863 | ||||||||||||
Operating (loss) income |
(34,026 | ) | 8,728 | (30,859 | ) | 11,627 | ||||||||||
Interest |
||||||||||||||||
Interest expense |
2,571 | 6,370 | 4,615 | 14,805 | ||||||||||||
Interest income |
19 | 21 | 35 | 42 | ||||||||||||
Interest expense, net |
2,552 | 6,349 | 4,580 | 14,763 | ||||||||||||
(Loss) income before taxes |
(36,578 | ) | 2,379 | (35,439 | ) | (3,136 | ) | |||||||||
Income tax expense |
776 | 1,858 | 1,007 | 3,439 | ||||||||||||
(Loss) income from continuing operations |
(37,354 | ) | 521 | (36,446 | ) | (6,575 | ) | |||||||||
Income (loss) from discontinued operations, net of taxes |
21 | 420 | (148 | ) | 3,148 | |||||||||||
Net (loss) income |
$ | (37,333 | ) | $ | 941 | $ | (36,594 | ) | $ | (3,427 | ) | |||||
Basic (loss) earnings per share: |
||||||||||||||||
Continuing operations |
$ | (0.54 | ) | $ | 0.01 | $ | (0.53 | ) | $ | (0.10 | ) | |||||
Discontinued operations |
| | | 0.05 | ||||||||||||
Net (loss) earnings |
$ | (0.54 | ) | $ | 0.01 | $ | (0.53 | ) | $ | (0.05 | ) | |||||
Diluted (loss) earnings per share: |
||||||||||||||||
Continuing operations |
$ | (0.54 | ) | $ | 0.01 | $ | (0.53 | ) | $ | (0.10 | ) | |||||
Discontinued operations |
| | | 0.05 | ||||||||||||
Net (loss) earnings |
$ | (0.54 | ) | $ | 0.01 | $ | (0.53 | ) | $ | (0.05 | ) | |||||
Weighted average shares outstanding: |
||||||||||||||||
Basic |
69,074 | 68,338 | 68,891 | 63,105 | ||||||||||||
Diluted |
69,074 | 69,520 | 68,891 | 63,105 | ||||||||||||
THE TALBOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Amounts in thousands
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Amounts in thousands
July 30, | January 29, | July 31, | ||||||||||
2011 | 2011 | 2010 | ||||||||||
Cash and cash equivalents |
$ | 7,128 | $ | 10,181 | $ | 4,650 | ||||||
Customer accounts receivable, net |
136,732 | 145,472 | 155,606 | |||||||||
Merchandise inventories |
163,922 | 158,040 | 130,344 | |||||||||
Other current assets |
54,721 | 37,419 | 57,474 | |||||||||
Total current assets |
362,503 | 351,112 | 348,074 | |||||||||
Property and equipment, net |
180,561 | 186,658 | 195,004 | |||||||||
Goodwill |
35,513 | 35,513 | 35,513 | |||||||||
Trademarks |
75,884 | 75,884 | 75,884 | |||||||||
Other assets |
18,292 | 19,349 | 19,527 | |||||||||
Total Assets |
$ | 672,753 | $ | 668,516 | $ | 674,002 | ||||||
Accounts payable |
$ | 112,535 | $ | 91,855 | $ | 80,153 | ||||||
Accrued liabilities |
117,388 | 137,824 | 147,487 | |||||||||
Revolving credit facility |
83,898 | 25,516 | 37,365 | |||||||||
Total current liabilities |
313,821 | 255,195 | 265,005 | |||||||||
Deferred rent under lease commitments |
84,863 | 93,440 | 103,588 | |||||||||
Deferred income taxes |
28,456 | 28,456 | 28,456 | |||||||||
Other liabilities |
94,414 | 107,839 | 112,810 | |||||||||
Stockholders equity |
151,199 | 183,586 | 164,143 | |||||||||
Total Liabilities and Stockholders Equity |
$ | 672,753 | $ | 668,516 | $ | 674,002 | ||||||
THE TALBOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Amounts in thousands
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Amounts in thousands
Twenty-Six Weeks Ended | ||||||||
July 30, | July 31, | |||||||
2011 | 2010 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net loss |
$ | (36,594 | ) | $ | (3,427 | ) | ||
(Loss) income from discontinued operations |
(148 | ) | 3,148 | |||||
Loss from continuing operations |
(36,446 | ) | (6,575 | ) | ||||
Depreciation and amortization |
28,021 | 31,490 | ||||||
Stock-based compensation |
5,149 | 7,755 | ||||||
Amortization of debt issuance costs |
1,100 | 1,996 | ||||||
Impairment of store assets |
1,217 | 6 | ||||||
Gift card breakage income |
(295 | ) | | |||||
Deferred and other items |
(7,411 | ) | (3,198 | ) | ||||
Changes in: |
||||||||
Customer accounts receivable |
8,789 | 8,013 | ||||||
Merchandise inventories |
(5,717 | ) | 12,442 | |||||
Accounts payable |
16,755 | (24,184 | ) | |||||
Accrued liabilities |
(19,036 | ) | 4,075 | |||||
All other working capital |
(31,189 | ) | (21,255 | ) | ||||
Net cash (used in) provided by operating activities |
(39,063 | ) | 10,565 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Additions to property and equipment |
(19,162 | ) | (5,935 | ) | ||||
Proceeds from disposal of property and equipment |
24 | 15 | ||||||
Cash acquired in merger with BPW Acquisition Corp. |
| 332,999 | ||||||
Net cash (used in) provided by investing activities |
(19,138 | ) | 327,079 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Borrowings on revolving credit facility |
938,100 | 684,338 | ||||||
Payments on revolving credit facility |
(879,718 | ) | (646,973 | ) | ||||
Payments on related party borrowings |
| (486,494 | ) | |||||
Payment of debt issuance costs |
| (5,993 | ) | |||||
Payment of equity issuance costs |
| (3,594 | ) | |||||
Proceeds from warrants exercised |
| 19,042 | ||||||
Proceeds from options exercised |
1 | 414 | ||||||
Purchase of treasury stock |
(2,267 | ) | (1,800 | ) | ||||
Net cash provided by (used in) financing activities |
56,116 | (441,060 | ) | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
378 | 333 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS |
(1,346 | ) | (5,042 | ) | ||||
NET DECREASE IN CASH AND CASH EQUIVALENTS |
(3,053 | ) | (108,125 | ) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
10,181 | 112,775 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | 7,128 | $ | 4,650 | ||||
SEC Regulation G
THE TALBOTS, INC. AND SUBSIDIARIES
Reconciliation of GAAP (loss) income from continuing operations to
non-GAAP (adjusted) (loss) income from continuing operations (unaudited)
Amounts in thousands except per share amounts
non-GAAP (adjusted) (loss) income from continuing operations (unaudited)
Amounts in thousands except per share amounts
For the 13 weeks ended | For the 13 weeks ended | |||||||||||||||
July 30, 2011 | July 31, 2010 | |||||||||||||||
(Loss) income from continuing operations |
$ | (37,354 | ) | $ | (0.54 | ) | $ | 521 | $ | 0.01 | ||||||
Restructuring charges |
1,005 | 0.02 | 112 | | ||||||||||||
Merger-related costs |
| | 3,050 | 0.04 | ||||||||||||
Store re-image initiative (a) |
886 | 0.01 | 577 | 0.01 | ||||||||||||
Change in tax estimate (b) |
| | 5,546 | 0.08 | ||||||||||||
Adjusted (loss) income from continuing operations |
$ | (35,463 | ) | $ | (0.51 | ) | $ | 9,806 | $ | 0.14 | ||||||
For the 26 weeks ended | For the 26 weeks ended | |||||||||||||||
July 30, 2011 | July 31, 2010 | |||||||||||||||
Loss from continuing operations |
$ | (36,446 | ) | $ | (0.53 | ) | $ | (6,575 | ) | $ | (0.10 | ) | ||||
Restructuring charges |
3,270 | 0.05 | 5,071 | 0.08 | ||||||||||||
Impairment of store assets |
1,217 | 0.02 | 6 | | ||||||||||||
Merger-related costs |
885 | 0.01 | 26,863 | 0.42 | ||||||||||||
Store re-image initiative (a) |
959 | 0.01 | 577 | 0.01 | ||||||||||||
Change in tax estimate (b) |
| | 5,546 | 0.09 | ||||||||||||
Adjusted (loss) income from continuing operations |
$ | (30,115 | ) | $ | (0.44 | ) | $ | 31,488 | $ | 0.50 | ||||||
Reconciliation of GAAP operating (loss) income to non-GAAP (adjusted) operating (loss) income (unaudited)
Amounts in thousands
Amounts in thousands
For the 13 weeks ended | For the 13 weeks ended | |||||||
July 30, 2011 | July 31, 2010 | |||||||
Operating (loss) income |
$ | (34,026 | ) | $ | 8,728 | |||
Restructuring charges |
1,005 | 112 | ||||||
Merger-related costs |
| 3,050 | ||||||
Store re-image initiative (a) |
886 | 577 | ||||||
Adjusted operating (loss) income |
$ | (32,135 | ) | $ | 12,467 | |||
For the 26 weeks ended | For the 26 weeks ended | |||||||
July 30, 2011 | July 31, 2010 | |||||||
Operating (loss) income |
$ | (30,859 | ) | $ | 11,627 | |||
Restructuring charges |
3,270 | 5,071 | ||||||
Impairment of store assets |
1,217 | 6 | ||||||
Merger-related costs |
885 | 26,863 | ||||||
Store re-image initiative (a) |
959 | 577 | ||||||
Adjusted operating (loss) income |
$ | (24,528 | ) | $ | 44,144 | |||
(a) | Costs incurred related to the store re-image initiative include accelerated depreciation of leasehold improvements and other costs associated with property disposed of under the program. | |
(b) | In the second quarter of 2010, the Company changed its estimate related to certain previously existing uncertain tax positions (FIN 48 liabilities), based on new information. The tax and interest expense recorded represents the Companys best estimate of potential exposure. |
THE TALBOTS, INC. AND SUBSIDIARIES
Additional Store Metrics
Additional Store Metrics
Store Count (unaudited)
July 31, | ||||||||||||||||||||||||||||||||
2010 | Openings | Closings | January 29, 2011 | Openings | Closings | Conversions | July 30, 2011 | |||||||||||||||||||||||||
Retail |
537 | | (16 | ) | 521 | | (15 | ) | | 506 | ||||||||||||||||||||||
Upscale Outlets |
22 | 7 | (1 | ) | 28 | 13 | | (2 | ) | 39 | ||||||||||||||||||||||
Surplus Outlets |
21 | | (2 | ) | 19 | | | 2 | 21 | |||||||||||||||||||||||
Total |
580 | 7 | (19 | ) | 568 | 13 | (15 | ) | | 566 |
Total Store Selling Square Footage (unaudited)
Amounts in thousands
Amounts in thousands
July 31, | January 29, | July 30, | ||||||||||||||
2010 | 2011 | 2011 | ||||||||||||||
Retail |
2,951 | 2,870 | 2,818 | |||||||||||||
Upscale Outlets |
81 | 101 | 133 | |||||||||||||
Surplus Outlets |
165 | 149 | 157 | |||||||||||||
Total |
3,197 | 3,120 | 3,108 |