Attached files
| file | filename |
|---|---|
| 8-K - LIVE FILING - KIRKLAND'S, INC | htm_51468.htm |
| EX-99.2 - EX-99.2 - KIRKLAND'S, INC | exhibit2.htm |
News Release
| Contact: | Kirkland’s | SCR Partners |
||
| Adam Holland | Jeff Black: (615) 760-3679 |
|||
| (615) 872-4996 | Tripp Sullivan: (615) 760-1104 |
|||
IR@Kirklands.com |
KIRKLAND’S REPORTS FOURTH QUARTER AND FISCAL 2014 RESULTS
NASHVILLE, Tenn. (March 12, 2015) — Kirkland’s, Inc. (NASDAQ: KIRK) today reported financial results for the 13-week and 52-week periods ended January 31, 2015.
Net sales for the 13 weeks ended January 31, 2015, increased 14.5% to $178.7 million compared with $156.1 million for the 13 weeks ended February 1, 2014. Comparable store sales for the fourth quarter of fiscal 2014, including e-commerce sales, increased 8.2% compared with flat comparable store sales in the prior-year quarter. Kirkland’s opened 11 stores and closed 4 during the fourth quarter, bringing the total number of stores to 344 at quarter end.
Net sales for the 52 weeks ended January 31, 2015, increased 10.2% to $507.6 million compared with $460.6 million for the 52 weeks ended February 1, 2014. Comparable store sales for fiscal 2014, including e-commerce sales, increased 6.1% compared with a 0.5% increase in fiscal 2013. The Company opened 34 stores and closed 14 during fiscal 2014.
Net income for the 13 weeks ended January 31, 2015, increased 26.2% to $15.6 million, or $0.87 per diluted share, compared with net income of $12.3 million, or $0.69 per diluted share, for the 13 weeks ended February 1, 2014.
Net income for the 52 weeks ended January 31, 2015, increased 22.6% to $17.8 million, or $1.00 per diluted share, compared with net income of $14.5 million, or $0.82 per diluted share, for the 52 weeks ended February 1, 2014.
Mike Madden, Kirkland’s President and Chief Executive Officer, said, “Earnings for the quarter and year came in at the top of our recently increased guidance. Traffic and conversion were both strong, and our profit margin improved for the second year in a row. Underlying business trends are encouraging thus far in 2015, despite the impact from difficult winter weather. We are confident that we can build on recent gains as we continue to leverage investments in people and technology.
“As we look to the longer term, our goal is to grow sales at a double-digit rate and return our operating margin to the high-single-digit range. To achieve these targets and deliver the returns we expect for our shareholders, we will be executing initiatives over the coming quarters to increase in-store productivity, optimize real estate growth, improve our e-commerce channel and tighten the focus on capital allocation.”
-MORE-
KIRK Reports Fourth Quarter and Fiscal 2014 Results
Page 2
March 12, 2015
Fiscal 2015 Outlook
| Store Growth: | For the 52-week period ending January 30, 2016 (“fiscal 2015”), the Company expects to achieve approximately 8% to 10% square footage growth with 35 to 40 new store openings and 10 to 15 store closings. New store openings are expected to be weighted toward the second and third quarters of the year, and store closings are expected to be spread evenly throughout the year. |
|||||
| Sales: | Total sales for fiscal 2015 are expected to increase approximately 10% to 12% compared with fiscal 2014. This level of sales performance would imply a comparable store sales increase of approximately 3% to 5% for fiscal 2015. |
|||||
| Margin & Expenses: | The Company expects gross profit margin to remain relatively flat year-over-year as a slight improvement in the merchandise margin is offset by increases in e-commerce outbound transportation and distribution center costs. Operating expenses are expected to decrease as a percent of sales. |
|||||
| Earnings: | Based on the above assumptions, the Company expects fiscal 2015 earnings per share to be in the range of $1.15 to $1.20, excluding a $0.02 per diluted share charge related to the retirement of the Company’s previous CEO. The Company expects its full year tax rate to be approximately 39%. |
|||||
| Cash Flow: | Capital expenditures in fiscal 2015 are estimated to range between $27 million and $29 million compared with $30 million in fiscal 2014. Based on the above assumptions, the Company expects to generate positive cash flow in fiscal 2015. |
|||||
First Quarter Fiscal 2015 Outlook
The Company issued guidance for the first quarter ending May 2, 2015, of net income of $0.09 to
$0.12 per diluted share, excluding a $0.02 per diluted share charge related to the retirement of
the Company’s previous CEO. Net sales are expected to be in the range of $117 million to $118
million with a comparable store sales increase in the range of 2% to 3%. To date in the first
quarter, the Company had 558 store days closed or shortened due to severe winter weather compared
with 315 store days in the prior year period. The Company expects to open 1 store and close
approximately 3 stores during the quarter.
Investor Conference Call and Web Simulcast
Kirkland’s will host a conference call today, March 12, 2015, at 11:00 a.m. ET. The number to call
for the interactive teleconference is (412) 317-0790. A replay of the conference call will be
available through Thursday, March 19, 2015, by dialing (412) 317-0088 and entering the confirmation
number, 10060347.
A live broadcast of Kirkland’s quarterly conference call will be available online at the Company’s website www.kirklands.com under Investor Relations or http://www.videonewswire.com/event.asp?id=101545 on March 12, 2015, beginning at 11:00 a.m. Eastern time. The online replay will follow shortly after the call and continue for one year.
About Kirkland’s, Inc.
Kirkland’s, Inc. was founded in 1966 and is a specialty retailer of home décor in the United
States. Although originally focused in the Southeast, the Company has grown beyond that region and
currently operates 344 stores in 35 states. The Company’s stores present a broad selection of
distinctive merchandise, including framed art, mirrors, candles, lamps, picture frames, accent
rugs, garden
-MORE-
KIRK Reports Fourth Quarter and Fiscal 2014 Results
Page 3
March 12, 2015
accessories and artificial floral products. The Company’s stores also offer an extensive assortment of gifts, as well as seasonal merchandise. More information can be found at www.kirklands.com.
Forward-Looking Statements
Except for historical information contained herein, the statements in this release are
forward-looking and made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. 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, the competitive environment in
the home décor industry in general and in Kirkland’s specific market areas, inflation, product
availability and growth opportunities, seasonal fluctuations, 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 April 17, 2014.
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.
-MORE-
KIRK Reports Fourth Quarter and Fiscal 2014 Results
Page 4
March 12, 2015
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands, except per share data)
| 13-Week | 13-Week | |||||||
| Period Ended | Period Ended | |||||||
| January 31, | February 1, | |||||||
| 2015 | 2014 | |||||||
Net sales |
$ | 178,683 | $ | 156,073 | ||||
Cost of sales |
102,013 | 91,441 | ||||||
Gross profit |
76,670 | 64,632 | ||||||
Operating expenses: |
||||||||
Operating expenses |
46,250 | 39,939 | ||||||
Depreciation |
5,238 | 4,157 | ||||||
Operating income |
25,182 | 20,536 | ||||||
Other income, net |
(8 | ) | (4 | ) | ||||
Income before income taxes |
25,190 | 20,540 | ||||||
Income tax expense |
9,636 | 8,214 | ||||||
Net income |
$ | 15,554 | $ | 12,326 | ||||
Earnings per share: |
||||||||
Basic |
$ | 0.91 | $ | 0.71 | ||||
Diluted |
$ | 0.87 | $ | 0.69 | ||||
Shares used to calculate earnings per share: |
||||||||
Basic |
17,146 | 17,297 | ||||||
Diluted |
17,778 | 17,903 | ||||||
-MORE-
KIRK Reports Fourth Quarter and Fiscal 2014 Results
Page 5
March 12, 2015
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands, except per share data)
| 52-Week | 52-Week | |||||||
| Period Ended | Period Ended | |||||||
| January 31, | February 1, | |||||||
| 2015 | 2014 | |||||||
Net sales |
$ | 507,621 | $ | 460,563 | ||||
Cost of sales |
304,724 | 279,747 | ||||||
Gross profit |
202,897 | 180,816 | ||||||
Operating expenses: |
||||||||
Operating expenses |
155,617 | 140,877 | ||||||
Depreciation |
18,639 | 15,947 | ||||||
Operating income |
28,641 | 23,992 | ||||||
Other (income) expense, net |
(179 | ) | 33 | |||||
Income before income taxes |
28,820 | 23,959 | ||||||
Income tax expense |
11,006 | 9,429 | ||||||
Net income |
$ | 17,814 | $ | 14,530 | ||||
Earnings per share: |
||||||||
Basic |
$ | 1.03 | $ | 0.84 | ||||
Diluted |
$ | 1.00 | $ | 0.82 | ||||
Shares used to calculate earnings per share: |
||||||||
Basic |
17,262 | 17,207 | ||||||
Diluted |
17,793 | 17,685 | ||||||
-MORE-
KIRK Reports Fourth Quarter and Fiscal 2014 Results
Page 6
March 12, 2015
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
| January 31, | February 1, | |||||||
| 2015 | 2014 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 99,138 | $ | 89,050 | ||||
Inventories, net |
55,775 | 52,637 | ||||||
Deferred income taxes |
3,538 | 2,777 | ||||||
Other current assets |
8,878 | 8,817 | ||||||
Total current assets |
167,329 | 153,281 | ||||||
Property and equipment, net |
90,992 | 80,329 | ||||||
Other assets |
2,166 | 1,838 | ||||||
Total assets |
$ | 260,487 | $ | 235,448 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 24,705 | $ | 23,102 | ||||
Income taxes payable |
5,648 | 5,875 | ||||||
Other current liabilities |
27,027 | 23,670 | ||||||
Total current liabilities |
57,380 | 52,647 | ||||||
Non-current deferred income taxes |
4,138 | 3,337 | ||||||
Deferred rent and other long-term liabilities |
47,907 | 44,235 | ||||||
Total liabilities |
109,425 | 100,219 | ||||||
Net shareholders’ equity |
151,062 | 135,229 | ||||||
Total liabilities and shareholders’ equity |
$ | 260,487 | $ | 235,448 | ||||
-MORE-
KIRK Reports Fourth Quarter and Fiscal 2014 Results
Page 7
March 12, 2015
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
| 52-Week | ||||||||
| 52-Week | Period Ended | |||||||
| Period Ended | February 1, | |||||||
| January 31, 2015 | 2014 | |||||||
Net cash provided by (used in): |
||||||||
Operating activities |
$ | 44,488 | $ | 39,213 | ||||
Investing activities |
(29,647 | ) | (17,954 | ) | ||||
Financing activities |
(4,753 | ) | (6 | ) | ||||
Cash and cash equivalents: |
||||||||
Net increase |
10,088 | 21,253 | ||||||
Beginning of the period |
89,050 | 67,797 | ||||||
End of the period |
$ | 99,138 | $ | 89,050 | ||||
-END-