CLAIRES STORES INC - FORM 8-K - EX-99.1

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8-K - 8-K - CLAIRES STORES INC	d413364d8k.htm

EXHIBIT 99.1

CLAIRE’S STORES, INC. AND SUBSIDIARIES

(EXCLUDING UNRESTRICTED SUBSIDIARIES)

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(in thousands)


	October 28, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	25,319
Inventories		157,827
Prepaid expenses		16,755
Other current assets		27,237

Total current assets		227,138

Property and equipment:
Furniture, fixtures and equipment		225,356
Leasehold improvements		302,042

		527,398
Accumulated depreciation and amortization		(406,557	)

		120,841

Leased property under capital lease:
Land and building		18,055
Accumulated depreciation and amortization		(6,990	)

		11,065

Goodwill		1,132,575
Intangible assets, net of accumulated amortization		304,681
Other assets		42,345

		1,479,601

Total assets	$	1,838,645

LIABILITIES AND STOCKHOLDER’S DEFICIT
Current liabilities:
Trade accounts payable	$	80,887
Income taxes payable		5,761
Accrued interest payable		24,079
Accrued expenses and other current liabilities		85,494

Total current liabilities		196,221

Intercompany payables		78,529
Long-term debt, net		1,969,032
Revolving credit facility, net		69,607
Obligation under capital lease		16,082
Deferred tax liability		99,134
Deferred rent expense		33,977
Unfavorable lease obligations and other long-term liabilities		9,306

		2,275,667

Commitments and contingencies

Stockholder’s deficit:
Common stock		—
Additional paid-in capital		546,052
Accumulated other comprehensive loss, net of tax		(40,567	)
Accumulated deficit		(1,138,728	)

		(633,243	)

Total liabilities and stockholder’s deficit	$	1,838,645

CLAIRE’S STORES, INC. AND SUBSIDIARIES

(EXCLUDING UNRESTRICTED SUBSIDIARIES)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT

OF OPERATIONS

(in thousands)


	Three Months Ended October 28, 2017			Nine Months Ended October 28, 2017
Net sales	$	314,584		$	930,842
Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below)		162,092			475,463

Gross profit		152,492			455,379

Other expenses:
Selling, general and administrative		115,336			338,622
Depreciation and amortization		10,755			32,848
Severance and transaction-related costs		335			867
Other income, net		(3,376	)		(8,248	)

		123,050			364,089

Operating income		29,442			91,290
Interest expense, net		43,229			130,203

Loss before income tax expense		(13,787	)		(38,913	)
Income tax expense		1,758			3,878

Net loss	$	(15,545	)	$	(42,791	)

CLAIRE’S STORES, INC. AND SUBSIDIARIES

(EXCLUDING UNRESTRICTED SUBSIDIARIES)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands)


	Nine Months Ended October 28, 2017
Cash flows from operating activities:
Net loss	$	(42,791	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		32,848
Amortization of lease rights and other assets		3,177
Amortization of debt issuance costs		6,462
Accretion of debt premium		(2,209	)
Non-cash pay-in-kind interest expense		1,200
Net unfavorable accretion of lease obligations		(47	)
Loss on sale/retirement of property and equipment, net		161
Stock-based compensation expense		190
(Increase) decrease in:
Inventories		(23,105	)
Prepaid expenses		(114	)
Other assets		(1,444	)
Increase (decrease) in:
Trade accounts payable		9,500
Income taxes payable		153
Accrued interest payable		(29,186	)
Accrued expenses and other liabilities		(4,781	)
Deferred income taxes		(1,108	)
Deferred rent expense		(1,074	)

Net cash used in operating activities		(52,168	)

Cash flows from investing activities:
Acquisition of property and equipment		(13,014	)
Acquisition of intangible assets/lease rights		(48	)

Net cash used in investing activities		(13,062	)

Cash flows from financing activities:
Proceeds from revolving credit facilities		118,000
Payments on revolving credit facilities		(53,200	)
Payments on short-term debt		(18,420	)
Payments of unamortized interest related to long-term debt		(4,133	)
Payment of debt issuance costs		(742	)
Principal payments of capital lease		(236	)
Intercompany activity, net		(5,873	)

Net cash provided by financing activities		35,396

Effect of foreign currency exchange rate changes on cash and cash equivalents		(639	)

Net decrease in cash and cash equivalents		(30,473	)
Cash and cash equivalents, at beginning of period		55,792

Cash and cash equivalents, at end of period	$	25,319

Claire’s (Gibraltar) Holdings Limited

Unaudited Condensed Consolidated Balance Sheet

(in thousands)


	October 28, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	16,719
Inventories		64,850
Prepaid expenses		14,358
Other current assets		10,992

Total current assets		106,919

Property and equipment:
Furniture, fixtures and equipment		71,516
Leasehold improvements		102,657

		174,173
Accumulated depreciation and amortization		(128,654	)

		45,519

Intercompany receivables		167,457
Goodwill		145,058
Intangible assets, net		201,052
Other assets		36,063

		549,630

Total assets	$	702,068

LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Trade accounts payable	$	54,866
Income taxes payable		5,640
Accrued interest payable		236
Accrued expenses and other current liabilities		38,005

Total current liabilities		98,747

Long-term debt, net		156,308
Deferred tax liability		5,580
Deferred rent expense		9,677

		171,565

Stockholder’s equity:
Common stock		2
Additional paid in capital		770,858
Accumulated other comprehensive loss, net of tax		(41,374	)
Accumulated deficit		(297,730	)

		431,756

Total liabilities and stockholder’s equity	$	702,068

Claire’s (Gibraltar) Holdings Limited

Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income

(in thousands)


	Three Months			Nine Months
	Ended			Ended
	October 28, 2017			October 28, 2017
Net sales	$	119,879		$	344,144
Cost of sales, occupancy and buying expenses (exclusive of depreciation and amortization shown separately below)		62,564			176,732

Gross profit		57,315			167,412

Other expenses:
Selling, general and administrative		46,745			133,730
Depreciation and amortization		4,087			12,067
Severance and transaction-related costs		347			570
Other income, net		(1,028	)		(7,446	)

		50,151			138,921

Operating income		7,164			28,491
Interest expense, net		2,720			8,293

Income before income tax expense		4,444			20,198
Income tax expense		1,323			4,455

Net income		3,121			15,743
Foreign currency translation adjustments		(123	)		3,723
Net (loss) gain on intra-entity foreign currency transactions, net of tax		(868	)		7,264

Other comprehensive (loss) income		(991	)		10,987

Comprehensive income	$	2,130		$	26,730

CLSIP Holdings LLC

Unaudited Condensed Statement of Cash Flows

(in thousands)


	Nine Months
	Ended
	October 28, 2017
Net cash provided by operating activities	$	—
Net cash provided by investing activities		—
Net cash provided by financing activities		—

Net increase in cash and cash equivalents		—
Cash and cash equivalents, at beginning of period		—

Cash and cash equivalents, at end of period	$	—

CLSIP LLC

Unaudited Condensed Statement of Cash Flows

(in thousands)


	Nine Months
	Ended
	October 28, 2017
Net cash provided by operating activities	$	—
Net cash provided by investing activities		—
Payments of unamortized interest related to long-term debt		(5,373	)
Intercompany activity, net		5,873

Net cash provided by financing activities		500

Net increase in cash and cash equivalents		500
Cash and cash equivalents, at beginning of period		—

Cash and cash equivalents, at end of period	$	500

CLAIRES STORES INC - FORM 8-K - EX-99.1 - December 8, 2017

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CLAIRES STORES INC Reports