Attached files
| file | filename |
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| 8-K - FORM 8-K - EXPRESS, INC. | q32011earningsrelease8-k.htm |
Company Contact:
D. Paul Dascoli
Senior Vice President &
Chief Financial Officer
(614) 474-4300
Media Contact:
Barbara Coleman
Corporate Communications
(614) 474-4083
bcoleman@express.com
Investor Contacts:
ICR, Inc.
Allison Malkin / Anne Rakunas
(203) 682-8200 / (310) 954-1113
EXPRESS, INC. REPORTS A 24% INCREASE IN THIRD QUARTER NET INCOME AND DILUTED EPS OF $0.37, EXCEEDING GUIDANCE
• | Net sales rise 8% and comparable sales increase 5% |
• | Operating margin expands 90 basis points to 12.5% |
• | Raises full year 2011 guidance to $1.61 to $1.65 per share |
Columbus, Ohio - November 30, 2011 - Express, Inc. (NYSE: EXPR), a specialty retail apparel chain operating 607 stores, today announced its third quarter financial results for the thirteen and thirty-nine week periods ended October 29, 2011, which compares to the same periods ended October 30, 2010.
Michael Weiss, Express, Inc.'s Chairman, Chief Executive Officer, and President commented: “We are pleased to continue our positive momentum from the first half of the year and report better-than-expected third quarter earnings. We believe this is a testament to the increasing awareness and strength of our brand as a leading fashion authority for our customers. During the quarter, we advanced each of our growth pillars. Increased sales productivity and profitability were driven by balanced growth across genders and categories resulting in a 5% increase in comparable sales. We grew our e-commerce channel by 41%, and our new stores performed ahead of our expectations. In addition, we continue to be pleased with our new store design and plan to expand this format to our new and remodeled stores beginning in late Spring 2012. Our international expansion continued successfully with the launch of two new
stores in Canada. Our confidence is further validated by a great start to the season with record Black Friday sales. We continue to expect the combination of our data-driven strategies and brand-building initiatives to lead to another quarter of strong results and continued accomplishments toward our long term goals and objectives.”
Third Quarter Operating Results:
• | Net sales increased 8% to $486.8 million from $450.6 million in the third quarter of 2010; |
• | Comparable sales increased 5% following a 5% increase in comparable sales in the third quarter of 2010; |
• | Gross margin decreased 30 bps to approximately 36.2% of net sales compared to 36.5% in the third quarter of 2010. During the third quarter, the anticipated 50 basis point impact of fabric cancellation costs and increased product sourcing costs were partially offset by gross margin expansion related to the on-going benefit realized from the Company's Go-to-Market strategy and 20 bps of buying and occupancy leverage; |
• | Selling, general, and administrative (SG&A) expenses totaled $115.1 million, or 23.6% of net sales. This compares to SG&A expenses of $111.3 million, or 24.7% of net sales, in the third quarter of 2010, which included $0.2 million of non-core operating costs related to the secondary offering completed on December 9, 2010; |
• | Operating income increased 16.6% to $60.9 million, or 12.5% of net sales, compared to $52.2 million, or 11.6% of net sales, in the third quarter of 2010; |
• | Interest expense totaled $6.3 million compared to interest expense of $7.6 million in the third quarter of 2010; |
• | Income tax expense was $22.0 million, at an effective tax rate of approximately 40.3%, compared to tax expense of $18.4 million, at an effective tax rate of approximately 41.2%, in the third quarter of 2010; and |
• | Net income was $32.7 million, or $0.37 per diluted share on 88.9 million weighted average shares outstanding. This compares to net income of $26.3 million, or $0.30 per diluted share on 88.7 million weighted average shares outstanding, in the third quarter of 2010, which included $0.1 million of after-tax non-core operating costs associated with the Company's secondary offering completed on December 9, 2010. |
Thirty-Nine Week Operating Results:
• | Net sales increased 9% to $1,400.2 million from $1,284.3 million in the prior year period, and year-to-date comparable sales increased 6%. This follows a 9% increase in comparable sales in the prior year period; |
• | Gross margin increased 80 bps to 36.0% of net sales compared to 35.2% of net sales in the prior year period; |
• | SG&A expenses totaled $342.2 million, or 24.4% of net sales, and included $0.6 million of non-core operating costs related to the secondary offering completed on April 6, 2011. This compares to SG&A expenses of $325.2 million, or 25.3% of net sales, in the prior year period, which included $2.9 million of non-core operating costs related to the Senior Notes offering completed on March 5, 2010, initial public offering completed on May 18, 2010, and secondary offering completed on December 9, 2010; |
• | Other operating income, net was $0.2 million. This compares to other operating expense, net of $17.8 million, or 1.4% of net sales, in the prior year period, which included a $13.3 million one-time fee paid to Golden Gate Capital and Limited Brands related to the termination of the advisory arrangements with them in connection with the initial public offering; |
• | Operating income increased approximately 49.3% to $162.0 million, or 11.6% of net sales, compared to $108.5 million, or 8.5% of net sales, in the prior year period; |
• | Interest expense totaled $27.8 million and included a $7.2 million loss on extinguishment of debt related to the repurchases of $49.2 million of Senior Notes and the Opco Revolving Credit Facility amendment. This compares to interest expense of $51.7 million in the prior year period, which included a $20.8 million loss on extinguishment of debt related to the prepayment of debt in connection with the Senior Notes offering and initial public offering; |
• | Income tax expense was $54.1 million, at an effective tax rate of approximately 40.2%, compared to a tax benefit of $20.1 million in the prior year period. The change in tax expense is a result of the Company's conversion to a corporation, effective for tax purposes May 2, 2010, in connection with its initial public offering in the second quarter of last year; |
• | Net income was $80.3 million, or $0.90 per diluted share on 88.8 million weighted average shares outstanding, and included the following non-core operating costs after tax: (i) $0.3 million, or $0.01 per diluted share, of costs related to the 2011 secondary offering; and (ii) $4.3 million, or $0.04 per diluted share, loss on extinguishment related to the repurchases of $49.2 million of Senior Notes and Opco Revolving Credit Facility amendment. This compares to net income of $79.0 million, or $0.93 per diluted share on 85.2 million weighted average shares outstanding, in the prior year period, which included the following non-core operating costs after tax: (i) $2.4 million, or $0.03 per diluted share, of costs related to the Senior Notes offering, initial public offering, and 2010 secondary offering; (ii) $8.0 million, or $0.09 per diluted share, of fees paid to Golden Gate Capital and Limited Brands related to the termination of advisory arrangements with them in connection with the initial public offering; and (iii) $15.3 million, or $0.18 per diluted share, loss on extinguishment of debt related to the prepayment of debt in connection with the Senior Notes offering and initial public offering. These costs were more than offset by a one-time tax benefit of $31.8 million, or $0.37 per diluted share, recognized in connection with the Company's conversion to a corporation; and |
• | Net income, adjusted for non-core operating costs noted above primarily related to the repurchases of Senior Notes and the 2011 secondary offering (see Schedule 4 for discussion of non-GAAP measures), was $85.0 million, or $0.96 per diluted share. This compares to net income, adjusted for non-core operating costs noted above related to the Senior Notes offering, initial public offering, and 2010 secondary offering (see Schedule 4 for discussion of non-GAAP measures), of $72.9 million, or $0.86 per diluted share. |
Third Quarter Balance Sheet Highlights:
• | Cash and cash equivalents totaled $145.0 million compared to $81.8 million at the end of the third quarter 2010; |
• | Inventories were $278.5 million, an increase of 15.9%, compared to $240.3 million at the end of the third quarter of 2010. The increase in inventory compared to the third quarter of last year reflects earlier receipt of holiday merchandise to capitalize on the season and an increase in new spring deliveries versus last year to support testing, which is consistent with our go-to-market strategy. In addition, end of quarter inventory also reflects funding for continued e-commerce growth, new stores, and new category growth, as well as to support our fourth quarter sales plans. Inventory per square foot increased approximately 5.4% compared to the third quarter of 2010; |
• | Debt declined by $49.4 million to $318.2 compared to $367.6 million at the end of the third quarter of 2010 driven by the repurchases of $49.2 million of Senior Notes during the first and second quarters of 2011. |
Store Expansion:
During the third quarter of 2011, the Company opened 8 new stores, including 6 stores in the United States and 2 stores in Canada, marking the Company's initial entry into the Canadian market. At quarter end, the Company operated 607 stores and had approximately 5.3 million gross square feet in operation.
2011 Guidance:
Tax Rate:
The Company estimates that its effective tax rate for the fourth quarter and full year 2011 will be approximately 40.3%. This compares to an effective tax rate of approximately 41.6% and 10.1% for the fourth quarter of 2010 and full year 2010, respectively. The expected increase in the effective tax rate for the full year 2011 compared to the prior year period reflects the Company's conversion to a corporation in connection with its initial public offering in the second quarter of 2010.
Fourth Quarter:
The Company currently expects fourth quarter 2011 comparable sales to increase mid single digits compared to an increase of 12% in the fourth quarter of 2010. Net income is expected in the range of $59 million to $62 million, or $0.66 to $0.70 per diluted share on 89.1 million shares outstanding. This compares to adjusted net income of $48.9 million, or $0.55 per diluted share on 88.7 million shares outstanding, in the fourth quarter of 2010 (see Schedule 4 for discussion of non-GAAP measures). The Company expects to open 6 new stores in the fourth quarter, including 2 in the United States and 4 in Canada, and close 4 stores in the United States to end the year with 609 stores and approximately 5.3 million gross square feet in operation.
Full Year:
The Company is increasing its full year 2011 guidance. The Company currently expects full year comparable sales to increase at the upper end of its previously indicated mid single digit guidance compared to an increase of 10% for full year 2010. Adjusted earnings are expected in the range of $1.61 to $1.65 per diluted share on 88.9 million shares outstanding (see Schedule 4 for discussion of non-GAAP measures), which is increased from its previous guidance of adjusted earnings in the range of $1.57 to $1.63 per diluted share. This compares to adjusted earnings of $1.42 per diluted share on 86.1 million shares outstanding in 2010 (see Schedule 4 for discussion of non-GAAP measures). This guidance implies adjusted operating income growth between 24% and 27% over adjusted operating income for full year 2010 (see Schedule 4 for discussion non-GAAP measures). The Company plans to open 27 new stores in the United States and Canada and close 9 existing locations in the United States, ending the year with 609 locations and approximately 5.3 million gross square feet in operation.
Conference Call Information:
A conference call to discuss third quarter results is scheduled for today, November 30, 2011, at 4:30 p.m. Eastern Standard Time. Investors and analysts interested in participating in the call are invited to dial (877) 705-6003 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at: http://www.express.com/investor and remain available for 90 days. A telephone replay of this call will be available at 7:30 p.m. EST on November 30, 2011 until 11:59 p.m. EST on December 7, 2011 and can be accessed by dialing (877) 870-5176 and entering replay pin number 382543.
About Express, Inc.:
Express is a specialty apparel and accessories retailer of women's and men's merchandise, targeting the 20 to 30 year old customer. The Company has over 30 years of experience offering a distinct combination of fashion and quality for multiple lifestyle occasions at an attractive value addressing fashion needs across work, casual, jeanswear, and going-out occasions. The Company currently operates 607 retail stores, located primarily in high-traffic shopping malls, lifestyle centers, and street locations across the United States, in Canada and in Puerto Rico and also distributes its products through the Company's e-commerce website, express.com.
Forward-Looking Statements:
Certain statements are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement that does not directly relate to any historical or current fact and may herein include, but are not limited to, statements regarding expected net income, comparable store sales, earnings per diluted share, effective tax rates, and store expansion and closures. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are (1) changes in consumer spending and general economic conditions; (2) our ability to identify and respond to new and changing fashion trends, customer preferences and other related factors; (3) fluctuations in our sales and results of operations on a seasonal basis and due to store events, promotions and a variety of other factors; (4) increased competition from other retailers; (5) the success of the malls and shopping centers in which our stores are located; (6) our dependence upon independent third parties to manufacture all of our merchandise; (7) our growth strategy, including our international expansion plan; (8) our dependence on a strong brand image; (9) our dependence upon key executive management; (10) our reliance on Limited Brands to provide us with certain key services for our business; (11) our substantial indebtedness and lease obligations; and (12) increased costs as a result of being a public company. Additional information concerning these and other factors can be found in Express, Inc.'s filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Schedule 1
Express, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
October 29, 2011 | January 29, 2011 | October 30, 2010 | |||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 144,982 | $ | 187,762 | $ | 81,780 | |||||
Receivables, net | 7,869 | 9,908 | 7,104 | ||||||||
Inventories | 278,540 | 185,209 | 240,333 | ||||||||
Prepaid minimum rent | 22,792 | 22,284 | 21,696 | ||||||||
Other | 34,571 | 22,130 | 17,139 | ||||||||
Total current assets | 488,754 | 427,293 | 368,052 | ||||||||
PROPERTY AND EQUIPMENT | 504,542 | 448,109 | 438,093 | ||||||||
Less: accumulated depreciation | (280,759 | ) | (236,790 | ) | (222,203 | ) | |||||
Property and equipment, net | 223,783 | 211,319 | 215,890 | ||||||||
TRADENAME/DOMAIN NAME | 197,474 | 197,414 | 197,414 | ||||||||
DEFERRED TAX ASSETS | 3,933 | 5,513 | 29,143 | ||||||||
OTHER ASSETS | 16,205 | 21,210 | 22,711 | ||||||||
Total assets | $ | 930,149 | $ | 862,749 | $ | 833,210 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Accounts payable | $ | 187,973 | $ | 85,843 | $ | 76,178 | |||||
Deferred revenue | 18,335 | 25,067 | 15,829 | ||||||||
Accrued bonus | 6,523 | 14,268 | 3,864 | ||||||||
Accrued expenses | 92,745 | 91,792 | 82,538 | ||||||||
Accounts payable and accrued expenses – related parties | 3,057 | 79,865 | 96,513 | ||||||||
Total current liabilities | 308,633 | 296,835 | 274,922 | ||||||||
LONG-TERM DEBT | 316,906 | 366,157 | 366,389 | ||||||||
OTHER LONG-TERM LIABILITIES | 86,531 | 69,595 | 61,520 | ||||||||
Total liabilities | 712,070 | 732,587 | 702,831 | ||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
Total stockholders’ equity | 218,079 | 130,162 | 130,379 | ||||||||
Total liabilities and stockholders’ equity | $ | 930,149 | $ | 862,749 | $ | 833,210 | |||||
Schedule 2
Express, Inc.
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
October 29, 2011 | October 30, 2010 | October 29, 2011 | October 30, 2010 | ||||||||||||
NET SALES | $ | 486,784 | $ | 450,577 | $ | 1,400,202 | $ | 1,284,316 | |||||||
COST OF GOODS SOLD, BUYING, AND OCCUPANCY COSTS | 310,816 | 286,254 | 896,088 | 832,770 | |||||||||||
Gross profit | 175,968 | 164,323 | 504,114 | 451,546 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Selling, general, and administrative expenses (a) | 115,061 | 111,309 | 342,236 | 325,155 | |||||||||||
Other operating expense (income), net (b) | 34 | 799 | (166 | ) | 17,844 | ||||||||||
Total operating expenses | 115,095 | 112,108 | 342,070 | 342,999 | |||||||||||
OPERATING INCOME | 60,873 | 52,215 | 162,044 | 108,547 | |||||||||||
INTEREST EXPENSE (c) | 6,328 | 7,570 | 27,843 | 51,699 | |||||||||||
INTEREST INCOME | (2 | ) | (1 | ) | (7 | ) | (12 | ) | |||||||
OTHER INCOME, NET | (148 | ) | (62 | ) | (148 | ) | (1,968 | ) | |||||||
INCOME BEFORE INCOME TAXES | 54,695 | 44,708 | 134,356 | 58,828 | |||||||||||
INCOME TAX EXPENSE (BENEFIT) | 22,025 | 18,407 | 54,053 | (20,148 | ) | ||||||||||
NET INCOME | $ | 32,670 | $ | 26,301 | $ | 80,303 | $ | 78,976 | |||||||
OTHER COMPREHENSIVE INCOME: | |||||||||||||||
Foreign currency translation | 2 | — | — | — | |||||||||||
COMPREHENSIVE INCOME | $ | 32,672 | $ | 26,301 | $ | 80,303 | $ | 78,976 | |||||||
EARNINGS PER SHARE: | |||||||||||||||
Basic | $ | 0.37 | $ | 0.30 | $ | 0.91 | $ | 0.94 | |||||||
Diluted | $ | 0.37 | $ | 0.30 | $ | 0.90 | $ | 0.93 | |||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | |||||||||||||||
Basic | 88,643 | 88,340 | 88,573 | 84,352 | |||||||||||
Diluted | 88,903 | 88,680 | 88,838 | 85,173 | |||||||||||
(a) Includes $0.6 million expense related to the 2011 secondary offering during the thirty-nine weeks ended October 29, 2011 and $0.2 million and $2.9 million expense related to the Senior Notes offering, initial public offering, and 2010 secondary offering for the thirteen and thirty-nine weeks ended October 30, 2010, respectively.
(b) Includes $13.3 million expense related to fees paid to Golden Gate Capital and Limited Brands for terminating advisory arrangements with them in connection with the initial public offering for the thirty-nine weeks ended October 30, 2010.
(c) Includes $7.2 million loss on extinguishment of debt related to the repurchases of $49.2 million of Senior Notes and the Opco Revolving Credit Facility amendment for the thirty-nine weeks ended October 30, 2011, and $20.8 milllion loss on extinguishment of debt related to the early repayment of the Topco Credit Facility for the thirty-nine weeks ended October 30, 2010.
Schedule 3
Express, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Thirty-Nine Weeks Ended | |||||||
October 29, 2011 | October 30, 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 80,303 | $ | 78,976 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 51,198 | 51,483 | |||||
Loss on disposal of property and equipment | 89 | 1,453 | |||||
Change in fair value of interest rate swap | — | (1,968 | ) | ||||
Share-based compensation | 7,483 | 4,411 | |||||
Non-cash loss on extinguishment of debt | 2,744 | 8,781 | |||||
Deferred taxes | (2,764 | ) | (32,527 | ) | |||
Changes in operating assets and liabilities: | |||||||
Receivables, net | 2,043 | (2,288 | ) | ||||
Inventories | (93,325 | ) | (68,629 | ) | |||
Accounts payable, deferred revenue, and accrued expenses | 10,158 | (716 | ) | ||||
Accounts payable and accrued expenses – related parties | 10 | 6,682 | |||||
Other assets and liabilities | 6,404 | 5,199 | |||||
Net cash provided by operating activities | 64,343 | 50,857 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures | (55,915 | ) | (41,950 | ) | |||
Purchase of intangible assets | (60 | ) | — | ||||
Net cash used in investing activities | (55,975 | ) | (41,950 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under Senior Notes | — | 246,498 | |||||
Net proceeds from equity offering | — | 166,898 | |||||
Repayments of long-term debt arrangements | (50,087 | ) | (300,938 | ) | |||
Costs incurred in connection with debt arrangements and Senior Notes | (1,192 | ) | (12,124 | ) | |||
Costs incurred in connection with equity offering | — | (6,498 | ) | ||||
Proceeds from share-based compensation | 234 | — | |||||
Repurchase of common stock | (103 | ) | — | ||||
Repayment of notes receivable | — | 5,633 | |||||
Distributions | — | (261,000 | ) | ||||
Net cash used in financing activities | (51,148 | ) | (161,531 | ) | |||
EFFECT OF EXCHANGE RATES ON CASH | — | — | |||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (42,780 | ) | (152,624 | ) | |||
CASH AND CASH EQUIVALENTS, Beginning of period | 187,762 | 234,404 | |||||
CASH AND CASH EQUIVALENTS, End of period | $ | 144,982 | $ | 81,780 | |||
Schedule 4
Supplemental Information - Consolidated Statements of Income
Reconciliation of GAAP to Non-GAAP Financial Measures
The Company supplements the reporting of their financial information determined under United States generally accepted accounting principles (GAAP) with certain non-GAAP financial measures: adjusted operating income, adjusted net income, and adjusted earnings per diluted share. The Company believes that these non-GAAP measures provide meaningful information to assist stockholders in understanding its financial results and assessing its prospects for future performance. Management believes adjusted operating income, adjusted net income, and adjusted earnings per diluted share are important indicators of their operations because they exclude items that may not be indicative of, or are unrelated to, their core operating results and provide a better baseline for analyzing trends in their underlying business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for operating income, net income, and earnings per diluted share. These non-GAAP financial measures reflect an additional way of viewing an aspect of the Company's operations that, when viewed with the GAAP results and reconciliations to the corresponding GAAP financial measures below, provide a more complete understanding of the Company's business. Management strongly encourages investors and stockholders to review their financial statements and publicly-filed reports in their entirety and to not rely on any single financial measure.
Schedule 4 (Continued)
Adjusted Operating Income, Adjusted Net Income, and Adjusted Earnings Per Diluted Share
(In thousands, except per share amounts)
(Unaudited)
The tables below reconcile the non-GAAP financial measures, actual and projected adjusted operating income, adjusted net income, and adjusted earnings per diluted share, with the most directly comparable GAAP financial measures, actual and projected operating income, net income, and earnings per diluted share.
Thirty-Nine Weeks Ended October 29, 2011 | ||||||||||||||
Operating Income | Net Income | Earnings per Diluted Share | Weighted Average Diluted Shares Outstanding | |||||||||||
Reported GAAP measure | $ | 162,044 | $ | 80,303 | $ | 0.90 | 88,838 | |||||||
Transaction costs (a) | 572 | 348 | * | 0.01 | ||||||||||
Interest expense (b) | — | 4,346 | * | 0.04 | ||||||||||
Adjusted non-GAAP measure | $ | 162,616 | $ | 84,997 | $ | 0.96 | ||||||||
(a) | Includes transaction costs related to the 2011 secondary offering. |
(b) | Includes premium paid and accelerated amortization of debt issuance costs and debt discount related to the repurchases of $49.2 million of Senior Notes and the Opco Revolving Credit Facility amendment. |
* Items were tax affected at the Company's statutory rate of 39% for the thirty-nine weeks ended October 29, 2011.
Fifty-Two Weeks Ended January 28, 2012 | ||||||||||||||
Projected Operating Income | Projected Net Income | Projected Earnings per Diluted Share | Projected Weighted Average Diluted Shares Outstanding | |||||||||||
Projected GAAP measure | $ | 269,728 | $ | 140,606 | $ | 1.58 | 88,905 | |||||||
Transaction costs (a) | 572 | 348 | * | 0.01 | ||||||||||
Interest expense (b) | — | 4,346 | * | 0.04 | ||||||||||
Projected Adjusted non-GAAP measure ** | $ | 270,300 | $ | 145,300 | $ | 1.63 | ||||||||
(a) | Includes transaction costs related to the 2011 secondary offering. |
(b) | Includes premium paid and accelerated amortization of debt issuance costs and debt discount related to the repurchases of $49.2 million of Senior Notes and Opco Revolving Credit Facility amendment. |
* Items were tax affected at the Company's statutory rate of 39% for the fifty-two weeks ended January 28, 2012.
** Represents mid-point of guidance range.
Schedule 4 (Continued)
Adjusted Operating Income, Adjusted Net Income, and Adjusted Earnings Per Diluted Share
(In thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended October 30, 2010 | ||||||||||||||
Operating Income | Net Income | Earnings per Diluted Share | Weighted Average Diluted Shares Outstanding | |||||||||||
Reported GAAP measure | $ | 52,215 | $ | 26,301 | $ | 0.30 | 88,680 | |||||||
Transaction Costs (a) | 170 | $ | 102 | * | $ | — | ||||||||
Adjusted non-GAAP measure | $ | 52,385 | $ | 26,403 | $ | 0.30 | ||||||||
(a) | Includes transaction costs related to the 2010 secondary offering. |
* Items were tax affected at the Company's statutory rate of 39.9% for the thirteen weeks ended October 30, 2010.
Thirty-Nine Weeks Ended October 30, 2010 | ||||||||||||||
Operating Income | Net Income | Earnings per Diluted Share | Weighted Average Diluted Shares Outstanding | |||||||||||
Reported GAAP measure | $ | 108,547 | $ | 78,976 | $ | 0.93 | 85,173 | |||||||
Transaction costs (a) | 2,901 | 2,446 | * | 0.03 | ||||||||||
Advisory/LLC fees (b) | 13,333 | 8,013 | * | 0.09 | ||||||||||
Interest expense (c) | — | 15,259 | * | 0.18 | ||||||||||
Non-cash tax benefit (d) | — | (31,807 | ) | (0.37 | ) | |||||||||
Adjusted non-GAAP measure | $ | 124,781 | $ | 72,887 | $ | 0.86 | ||||||||
(a) | Includes transaction costs related to the Senior Notes offering, initial public offering, and 2010 secondary offering. |
(b) | Includes fees paid to Golden Gate Capital and Limited Brands for terminating advisory arrangements with them. |
(c) | Includes prepayment penalty and acceleration of amortization of debt issuance costs and debt discount related to early repayment of the Term C Loan and Term B Loan. |
(d) | Represents one-time, non-cash tax benefit in connection with the Company's conversion to a corporation. |
* Items were tax affected at 1.2% for the thirteen weeks ended May 1, 2010 and at the Company's statutory rate of 39.9% for the thirteen weeks ended July 31, 2010 and October 30, 2010.
Schedule 4 (Continued)
Adjusted Operating Income, Adjusted Net Income, and Adjusted Earnings Per Diluted Share
(In thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended January 29, 2011 | ||||||||||||||
Operating Income | Net Income | Earnings per Diluted Share | Weighted Average Diluted Shares Outstanding | |||||||||||
Reported GAAP measure | $ | 90,704 | $ | 48,412 | $ | 0.55 | 88,683 | |||||||
Transaction costs (a) | 432 | 272 | ** | — | ||||||||||
Advisory/LLC fees (b) | — | 108 | ** | — | ||||||||||
Interest expense (c) | — | 111 | ** | — | ||||||||||
Adjusted non-GAAP measure | $ | 91,136 | $ | 48,903 | $ | 0.55 | ||||||||
(a) | Includes transaction costs related to the Senior Notes offering, initial public offering, and 2010 secondary offering. |
(b) | Includes fees paid to Golden Gate Capital and Limited Brands for terminating advisory arrangements with them. |
(c) | Includes prepayment penalty and acceleration of amortization of debt issuance costs and debt discount related to early repayment of the Term B Loan and Term C Loan. |
** Includes true up tax adjustment to reflect the Company's statutory rate of 39.1% for adjustments related to the thirteen weeks ended July 31, 2010 and October 31, 2010, which were previously tax affected at 39.9%.
Fifty-Two Weeks Ended January 29, 2011 | ||||||||||||||
Operating Income | Net Income | Earnings per Diluted Share | Weighted Average Diluted Shares Outstanding | |||||||||||
Reported GAAP measure | $ | 199,251 | $ | 127,388 | $ | 1.48 | 86,050 | |||||||
Transaction costs (a) | 3,333 | 2,718 | * | 0.03 | ||||||||||
Advisory/LLC fees (b) | 13,333 | 8,121 | * | 0.10 | ||||||||||
Interest expense (c) | — | 15,370 | * | 0.18 | ||||||||||
Non-cash tax benefit (d) | — | (31,807 | ) | (0.37 | ) | |||||||||
Adjusted non-GAAP measure | $ | 215,917 | $ | 121,790 | $ | 1.42 | ||||||||
(a) | Includes transaction costs related to the Senior Notes offering, initial public offering, and 2010 secondary offering. |
(b) | Includes fees paid to Golden Gate Capital and Limited Brands for terminating advisory arrangements with them. |
(c) | Includes prepayment penalty and acceleration of amortization of debt issuance costs and debt discount related to early repayment of the Term B Loan and Term C Loan. |
(d) | Represents one-time, non-cash tax benefit in connection with the Company's conversion to a corporation. |
* Items were tax affected at 1.2% for the thirteen weeks ended May 1, 2010 and at the Company's statutory rate of 39.1% for the thirteen weeks ended July 31, 2010, October 31, 2010, and January 29, 2011.