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8-K - 8-K - CHRISTOPHER & BANKS CORP | a11-32235_18k.htm |
Exhibit 99.1
2400 Xenium Lane North, Plymouth, MN 55441 · (763) 551-5000 · www.christopherandbanks.com |
FOR: |
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Christopher & Banks Corporation |
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COMPANY CONTACT: |
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Michael Lyftogt |
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Senior Vice President, |
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Chief Financial Officer |
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(763) 551-5000 |
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INVESTOR RELATIONS CONTACT: |
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Jean Fontana |
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ICR, Inc. |
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(203) 682-8200 |
CHRISTOPHER & BANKS CORPORATION REPORTS
THIRD QUARTER FISCAL 2012 RESULTS
Minneapolis, MN, December 22, 2011 Christopher & Banks Corporation (NYSE: CBK), a specialty womens apparel retailer, today reported results for the third fiscal quarter and nine month period ended November 26, 2011.
Results for the Three Months Ended November 26, 2011
· Net sales for the third quarter were $123.9 million, as compared to $120.9 million for the third quarter of fiscal 2011. Same store sales were essentially flat for the quarter.
· Gross profit was $26.8 million, as compared to $43.4 million in the third quarter of fiscal 2011. Gross profit margin was 21.7% for the third quarter of fiscal 2012, as compared to 35.9% in the third quarter of fiscal 2011.
· Asset impairment charges estimated at $11.4 million for the third quarter of fiscal 2012 include non-cash asset impairment charges related to approximately 100 stores planned to close by January 2012 and non-cash asset impairment charges for stores the Company plans to continue to operate. The Company also recorded $0.8 million of severance charges related to closing stores and a reduction in force in October involving corporate office and field management personnel. No asset impairment or restructuring charges were recorded in the third quarter of fiscal 2011.
· Operating loss totaled $28.2 million which includes the asset impairment and restructuring charges referred to above. This compares to an operating loss of $0.2 million in the third quarter of fiscal 2011, which included a pre-tax severance charge of approximately $1.0 million related to the separation of the Companys former Chief Executive Officer.
· Net loss totaled $28.2 million, or $0.79 per share, for the third quarter, which includes
$12.2 million, or $0.34 per share, of restructuring charges and the estimated asset impairment charges. This compares to a net loss of $9.2 million, or $0.26 per diluted share, for the third fiscal quarter of 2011, which included a non-cash charge resulting from recording a $12.9 million, or $0.36 per share, valuation allowance related to the Companys deferred tax assets and a pre-tax severance charge of approximately $1.0 million, or $0.02 per share.
Larry Barenbaum, Chief Executive Officer, commented, We were clearly disappointed in the results for the quarter. In response to the slow sell-through, we aggressively promoted merchandise to drive customer purchasing and move through seasonal inventory, which resulted in significant erosion of our gross margins. We expect that these challenges and merchandise margin pressures will continue in the fourth quarter given that we still need to work through current product. Looking ahead, we remain focused on completing our previously announced store closing plan, disciplined inventory management and expense controls, and improved product execution.
Mr. Barenbaum continued, We announced last week that Joel Waller, a retail veteran with a strong industry background, joined us as President. While I am confident he will add value in all aspects of our business, his primary focus will be on product development, sourcing and merchandising. Joel and I are committed to revitalizing the business and getting the Company back on track to profitability.
Results for the Nine Months Ended November 26, 2011
· Net sales were $344.0 million, as compared to $348.5 million for the nine months ended November 27, 2011. Same store sales declined 3% in the first nine months of fiscal 2012.
· Operating loss totaled $39.2 million, or 11.4% of net sales. This compares to operating income of $6.0 million, or 1.7% of net sales, for the comparable nine month period last year. Operating loss for the first nine months of fiscal 2012 includes the aforementioned asset impairment and restructuring charges.
· Net loss totaled $39.3 million, or $1.11 per share, which includes $12.2 million, or $0.34 per share, of restructuring and estimated asset impairment charges. This compares to a net
loss of $5.4 million, or $0.15 per diluted share, for the first nine months of fiscal 2011, which included severance charges of approximately $0.03 per share and a non-cash charge of $0.36 per share related to the valuation allowance on deferred tax assets referenced above.
Asset Impairment and Restructuring Charges
On November 11, 2011, the Company announced its plans to close approximately 100 stores, most of which are underperforming. A majority of the stores are planned to close by January 2012. In the third quarter, the Company recorded an estimated non-cash asset impairment charge of $11.4 million related to the closing stores and to stores it plans to continue to operate and which are targeted for rent renegotiation. The Company also recorded approximately $0.8 million of severance charges in the third quarter related to closing stores and an October reduction in force.
Third Quarter Balance Sheet Highlights
The Company ended the third quarter of fiscal 2012 with total cash, cash-equivalents and investments of $74.7 million, as compared to $102.3 million at the end of last years third fiscal quarter. The Company had no outstanding borrowings under its revolving credit facility during the quarter. Inventory totaled $58.2 million at the end of the third quarter of fiscal 2012, as compared to $46.0 million at the end of the third quarter of fiscal 2011. The increase in inventory was largely due to higher e-commerce inventory and a shift in payment terms made by the Company in February 2011, which became effective in the second quarter of fiscal 2011. Inventory per store, excluding e-commerce and in-transit inventory, increased 8% as compared to last years third quarter.
Capital Expenditures
The Company funded approximately $11.1 million of capital expenditures during the first nine months of fiscal 2012. Total capital expenditures for the year are expected to be approximately $13.5 million, down from the earlier estimate of $16.0 million.
Conference Call Information
The Company will discuss its third quarter results in a conference call scheduled for today, December 22, 2011, at 4:30 p.m. Eastern time. The conference call will be
simultaneously broadcast live over the Internet at http://www.christopherandbanks.com. An online archive of the broadcast will be available within one hour of the completion of the call and will be accessible at http://www.christopherandbanks.com until December 29, 2011. In addition, an audio replay of the call will be available shortly after its conclusion and will be archived until December 29, 2011. This call may be accessed by dialing (877) 870-5176 and using passcode 2965448.
About Christopher & Banks
Christopher & Banks Corporation is a Minneapolis-based specialty retailer of womens clothing. As of December 22, 2010, the Company operates 774 stores in 45 states consisting of 471 Christopher & Banks stores, 237 stores in their plus size clothing division CJ Banks, 43 dual-concept stores and 23 outlet stores. The Company also operates the www.ChristopherandBanks.com and www.CJBanks.com e-Commerce websites.
Keywords: Christopher & Banks, CJ Banks, Womens Clothing, Plus Size Clothing, Petites, Extended Sizes, Outfits.
Forward-Looking Statements
Certain statements in this press release are forward-looking statements, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements may use the words expect, anticipate, plan, intend, project, believe and similar expressions and include statements (i) that the Company expects the current challenges and merchandise margin pressures to continue in the fourth quarter; (ii) that Mr. Waller will add value in all aspects of the Companys business and that he and Mr. Barenbaum are committed to revitalizing the business and getting the Company back on track to profitability; (iii) that the Company will remain focused on its previously announced store closing plan, disciplined inventory management and expense controls, and improved product execution; and (iv) that total capital expenditures for the year are expected to be approximately $13.5 million, down from the Companys earlier estimate of $16.0 million.
Readers are cautioned not to place undue reliance on these forward-looking statements which are based on current expectations and speak only as of the date of this release. The
Company does not assume any obligation to update or revise any forward-looking statement at any time for any reason.
Certain other factors that may cause actual results to differ from such forward-looking statements are included in the Companys periodic reports filed with the Securities and Exchange Commission and available on the Companys website under Investor Relations and you are urged to carefully consider all such factors.
###
CHRISTOPHER & BANKS CORPORATION
UNAUDITED COMPARATIVE BALANCE SHEET
(in thousands)
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November 26, |
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November 27, |
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2011 |
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2010 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
34,495 |
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$ |
30,578 |
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Short-term investments |
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22,242 |
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53,482 |
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Merchandise inventories |
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58,173 |
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45,973 |
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Other current assets |
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12,534 |
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13,001 |
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Total current assets |
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127,444 |
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143,034 |
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Property, equipment and improvements, net |
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59,085 |
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83,955 |
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Other assets: |
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Long-term investments |
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17,987 |
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18,200 |
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Other |
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278 |
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314 |
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Total other assets |
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18,265 |
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18,514 |
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Total assets |
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$ |
204,794 |
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$ |
245,503 |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
32,143 |
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$ |
7,803 |
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Accrued liabilities |
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28,543 |
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26,525 |
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Total current liabilities |
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60,686 |
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34,328 |
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Other liabilities: |
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Deferred lease incentives |
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14,115 |
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16,518 |
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Other |
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9,370 |
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11,319 |
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Total other liabilities |
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23,485 |
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27,837 |
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Stockholders equity: |
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Common stock |
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456 |
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454 |
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Additional paid-in capital |
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116,928 |
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115,095 |
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Retained earnings |
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115,886 |
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180,521 |
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Common stock held in treasury |
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(112,711 |
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(112,711 |
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Accumulated other comprehensive income (loss) |
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64 |
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(21 |
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Total stockholders equity |
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120,623 |
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183,338 |
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Total liabilities and stockholders equity |
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$ |
204,794 |
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$ |
245,503 |
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CHRISTOPHER & BANKS CORPORATION
UNAUDITED COMPARATIVE INCOME STATEMENT
FOR THE QUARTERS AND NINE MONTHS ENDED
NOVEMBER 26, 2011 AND NOVEMBER 27, 2010
(in thousands, except per share data)
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Quarter Ended |
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Nine Months Ended |
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November 26, |
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November 27, |
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November 26, |
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November 27, |
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2011 |
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2010 |
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2011 |
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2010 |
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Net sales |
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$ |
123,896 |
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$ |
120,947 |
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$ |
343,957 |
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$ |
348,521 |
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Costs and expenses: |
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Merchandise, buying and occupancy |
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97,056 |
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77,549 |
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246,285 |
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215,941 |
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Selling, general and administrative |
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37,552 |
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37,585 |
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107,487 |
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107,579 |
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Depreciation and amortization |
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5,314 |
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6,010 |
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17,164 |
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18,974 |
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Impairment and restructuring |
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12,199 |
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12,199 |
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Total costs and expenses |
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152,121 |
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121,144 |
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383,135 |
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342,494 |
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Operating income (loss) |
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(28,225 |
) |
(197 |
) |
(39,178 |
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6,027 |
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Other income |
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104 |
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120 |
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259 |
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363 |
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Income (loss) before income taxes |
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(28,121 |
) |
(77 |
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(38,919 |
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6,390 |
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Income tax provision |
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118 |
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9,149 |
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412 |
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11,813 |
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Net loss |
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$ |
(28,239 |
) |
$ |
(9,226 |
) |
$ |
(39,331 |
) |
$ |
(5,423 |
) |
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Basic loss per share: |
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Net loss |
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$ |
(0.79 |
) |
$ |
(0.26 |
) |
$ |
(1.11 |
) |
$ |
(0.15 |
) |
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Basic shares outstanding |
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35,585 |
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35,379 |
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35,542 |
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35,360 |
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Diluted loss per share: |
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Net loss |
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$ |
(0.79 |
) |
$ |
(0.26 |
) |
$ |
(1.11 |
) |
$ |
(0.15 |
) |
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Diluted shares outstanding |
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35,585 |
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35,379 |
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35,542 |
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35,360 |
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Dividends per share |
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$ |
0.06 |
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$ |
0.06 |
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$ |
0.18 |
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$ |
0.18 |
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CHRISTOPHER & BANKS CORPORATION
UNAUDITED COMPARATIVE STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED
NOVEMBER 26, 2011 AND NOVEMBER 27, 2010
(in thousands)
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Nine Months Ended |
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November 26, |
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November 27, |
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2011 |
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2010 |
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Cash flows from operating activities: |
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Net loss |
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$ |
(39,331 |
) |
$ |
(5,423 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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17,164 |
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19,312 |
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Impairment of store assets |
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11,445 |
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Deferred income taxes |
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11,180 |
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Stock-based compensation expense |
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2,158 |
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1,513 |
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Other |
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51 |
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(93 |
) | ||
Changes in operating assets and liabilities: |
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Increase in accounts receivable |
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(3,533 |
) |
(1,878 |
) | ||
Increase in merchandise inventories |
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(18,961 |
) |
(7,477 |
) | ||
(Increase) decrease in other current assets |
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3,393 |
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(4,542 |
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(Increase) decrease in other assets |
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36 |
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(30 |
) | ||
Increase (decrease) in accounts payable |
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17,060 |
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(5,699 |
) | ||
Decrease in accrued liabilities |
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(854 |
) |
(1,600 |
) | ||
Decrease in deferred lease incentives |
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(867 |
) |
(3,060 |
) | ||
Decrease in other liabilities |
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(1,035 |
) |
(1,379 |
) | ||
Net cash provided by (used in) operating activities |
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(13,274 |
) |
824 |
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Cash flows from investing activities: |
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Purchases of property, equipment and improvements |
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(11,113 |
) |
(7,260 |
) | ||
Purchases of investments |
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(81,271 |
) |
(57,183 |
) | ||
Sales of investments |
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103,005 |
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63,058 |
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Net cash provided by (used in) investing activities |
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10,621 |
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(1,385 |
) | ||
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Cash flows from financing activities: |
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Exercise of stock options |
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|
183 |
| ||
Dividends paid |
|
(6,426 |
) |
(6,417 |
) | ||
Other |
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(138 |
) |
300 |
| ||
Net cash used in financing activities |
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(6,564 |
) |
(5,934 |
) | ||
|
|
|
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Net decrease in cash and cash equivalents |
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(9,217 |
) |
(6,495 |
) | ||
|
|
|
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Cash and cash equivalents at beginning of period |
|
43,712 |
|
37,073 |
| ||
|
|
|
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Cash and cash equivalents at end of period |
|
$ |
34,495 |
|
$ |
30,578 |
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