May 22, 2014 |
Kirkland's Reports First Quarter 2014 Results |
Announces $30 Million Share Repurchase Authorization
Kirkland's, Inc. (NASDAQ: KIRK) today reported financial results for the
13-week period ended May 3, 2014.
Net sales for the 13 weeks ended May 3, 2014, increased 6.9% to $108.3
million compared with $101.2 million for the 13 weeks ended May 4, 2013.
Comparable store sales for the first quarter of fiscal 2014, including
e-commerce sales, increased 5.0% compared with a decrease of 2.3% in the
prior-year quarter. Kirkland's opened 7 stores and closed 7 during the
first quarter, leaving the total number of stores at 324 at quarter end.
The Company reported net income of $2.1 million, or $0.12 per diluted
share, for the 13 weeks ended May 3, 2014, compared with net income of
$1.8 million, or $0.10 per diluted share, for the 13 weeks ended May 4,
2013.
Robert Alderson, Kirkland's President and Chief Executive Officer, said,
"We are pleased with the sales momentum during the quarter in our stores
and online after the slower start related to adverse weather events.
Despite a somewhat more promotional environment late in the quarter,
sales remained strong leading to earnings performance at the high end of
our guidance. The year thus far is proceeding according to our plan, and
we continue to expect benefits for the balance of the year from our
investments in store growth, merchandise systems, e-commerce and
branding initiatives."
Stock Repurchase Authorization of $30 Million
The Company also announced that its Board of Directors authorized a
stock repurchase plan providing for the purchase in the aggregate of up
to $30 million of the Company's outstanding common stock over the next
24 months. The shares may be repurchased from time to time in open
market or negotiated transactions, and the amount and timing of those
purchases will be based on a variety of factors, including stock
acquisition price, regulatory limitations and other market and economic
factors. The stock repurchase program does not require the Company to
repurchase any specific number of shares, and the Company may terminate
the repurchase program at any time. As of May 21, 2014, the Company had
17.3 million common shares outstanding.
Mr. Alderson added, "We maintain a strong balance sheet, and our unique
store model continues to suggest future cash flow generation. As we
opportunistically increase the growth rate of the business, the Board's
decision to authorize another round of share repurchases signals our
confidence in the future of Kirkland's."
Fiscal 2014 Outlook |
|
| | Store Growth: | | |
For the 52-week period ending January 31, 2015 ("fiscal 2014"), the
Company expects to achieve approximately 10% square footage growth
with 35 to 40 new store openings and 10 to 15 store closings. New
store openings will be weighted more toward the second half of the
year, and store closings will be weighted more toward the first half
of the year.
| | | |
| Sales: | | |
Total sales for fiscal 2014 are expected to increase approximately
8% to 10% compared with fiscal 2013. This level of sales performance
would imply a comparable store sales increase of approximately 3% to
5% for fiscal 2014.
| | | |
| Margin & Expenses: | | |
The Company expects year-over-year improvement in merchandise and
gross profit margins that is expected to result from a lower
markdown rate, lower inbound freight costs, and sales leverage.
Operating expenses are expected to increase on a dollar basis due to
the increase in stores and incremental investments in corporate
headcount to support our growth initiatives. The Company is also
anticipating approximately $0.03 to $0.04 per diluted share in
additional costs associated with its second half lease expiration
and transition to replacement corporate headquarters space.
| | | |
| Earnings: | | |
Based on the above assumptions, without regard to share repurchase
activity, the Company expects fiscal 2014 earnings per share to be
in the range of $0.90 to $1.00. The Company expects its full year
tax rate to be approximately 39%.
| | | |
| Cash Flow: | | |
Capital expenditures in fiscal 2014 are estimated to range between
$33 million and $36 million. Based on the above assumptions, the
Company expects to generate positive cash flow in fiscal 2014,
excluding potential share repurchases.
| | | |
|
Second Quarter Fiscal 2014 Outlook
The Company issued guidance for the second quarter ending August 2,
2014, of a net loss of $0.03 to $0.06 per diluted share. Net sales are
expected to be in the range of $104 million to $105 million with a
comparable store sales increase in the range of 3% to 4%. The Company
expects to open approximately 8 stores and close approximately 2 stores
during the quarter.
Investor Conference Call and Web Simulcast
Kirkland's will issue its earnings release for the first quarter before
the market opens on Thursday, May 22, 2014, and will host a conference
call on the same day at 11:00 a.m. ET. The number to call for the
interactive teleconference is (212) 231-2918. A replay of the conference
call will be available through Thursday, May 29, 2014, by dialing (402)
977-9140 and entering the confirmation number, 21706373.
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=99176
on May 22, 2014, beginning at 11:00 a.m. ET. 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 326 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 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.
| KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME | (In thousands, except per share data) | |
|
| |
|
| | | | | | | |
| | | | 13-Week Period Ended | | | 13-Week Period Ended | | | | May 3, | | | May 4, | | | | 2014 | | | 2013 |
Net sales
| | |
$
|
108,255
| | | |
$
|
101,233
|
Cost of sales
| | |
|
65,653
|
| | |
|
61,827
|
Gross profit
| | | |
42,602
| | | | |
39,406
| | | | | | |
|
Operating expenses:
| | | | | | |
Operating expenses
| | | |
34,943
| | | | |
32,779
|
Depreciation
| | |
|
4,300
|
| | |
|
3,791
|
Operating income
| | | |
3,359
| | | | |
2,836
| | | | | | |
|
Other (income) expense, net
| | |
|
(13
|
)
| | |
|
6
|
Income before income taxes
| | | |
3,372
| | | | |
2,830
|
Income tax expense
| | |
|
1,317
|
| | |
|
1,057
|
Net income
| | |
$
|
2,055
|
| | |
$
|
1,773
| | | | | | |
|
Earnings per share:
| | | | | | |
Basic
| | |
$
|
0.12
|
| | |
$
|
0.10
|
Diluted
| | |
$
|
0.12
|
| | |
$
|
0.10
| | | | | | |
|
Shares used to calculate earnings per share:
| | | | | | |
Basic
| | |
|
17,308
|
| | |
|
17,083
|
Diluted
| | |
|
17,825
|
| | |
|
17,433
|
|
|
|
| |
|
| |
|
| | KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS | (In thousands) | | | | | | | | | | |
| | | | | | | | | | |
| | | | | May 3, | | | February 1, | | | May 4, | | | | | 2014 | | | 2014 | | | 2013 | ASSETS | | | | | | | | | | | | | | | | | | | | |
|
Current assets:
| | | | | | | | | | |
Cash and cash equivalents
| | | |
$
|
82,418
| | |
$
|
89,050
| | |
$
|
74,111
|
Inventories, net
| | | | |
50,702
| | | |
52,637
| | | |
47,889
|
Deferred income taxes
| | | | |
2,857
| | | |
2,777
| | | |
1,638
|
Other current assets
| | | |
|
8,595
| | |
|
8,817
| | |
|
7,591
|
Total current assets
| | | | |
144,572
| | | |
153,281
| | | |
131,229
| | | | | | | | | | |
|
Property and equipment, net
| | | | |
82,768
| | | |
80,329
| | | |
76,964
|
Other assets
| | | |
|
2,028
| | |
|
1,838
| | |
|
1,680
| | | | | | | | | | |
|
Total assets
| | | |
$
|
229,368
| | |
$
|
235,448
| | |
$
|
209,873
| | | | | | | | | | |
| | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | |
|
Current liabilities:
| | | | | | | | | | |
Accounts payable
| | | |
$
|
19,465
| | |
$
|
23,102
| | |
$
|
20,933
|
Income taxes payable
| | | | |
866
| | | |
5,875
| | | |
-
|
Other current liabilities
| | | |
|
22,870
| | |
|
23,670
| | |
|
21,719
|
Total current liabilities
| | | | |
43,201
| | | |
52,647
| | | |
42,652
| | | | | | | | | | |
|
Non-current deferred income taxes
| | | | |
3,239
| | | |
3,337
| | | |
3,057
|
Deferred rent and other long-term liabilities
| | | |
|
44,930
| | |
|
44,235
| | |
|
43,778
|
Total liabilities
| | | |
|
91,370
| | |
|
100,219
| | |
|
89,487
| | | | | | | | | | |
|
Net shareholders' equity
| | | |
|
137,998
| | |
|
135,229
| | |
|
120,386
| | | | | | | | | | |
|
Total liabilities and shareholders' equity
| | | |
$
|
229,368
| | |
$
|
235,448
| | |
$
|
209,873
|
|
|
| |
|
| | KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | (In thousands) |
| | | | | | | | | | | | 13-Week Period Ended | | | 13-Week Period Ended | | | | | May 3, | | | May 4, | | | | | 2014 | | | 2013 | Net cash provided by (used in): | | | | | | | | | | | | | |
| |
Operating activities
| | |
$
|
221
| | | |
$
|
8,561
| | |
Investing activities
| | | |
(6,930
|
)
| | | |
(2,322
|
)
| |
Financing activities
| | |
| 77 |
| | |
| 75 |
| | | | | | | |
| Cash and cash equivalents: | | | | | | | |
Net increase (decrease)
| | | |
(6,632
|
)
| | | |
6,314
| | |
Beginning of the period
| | |
| 89,050 |
| | |
| 67,797 |
| |
End of the period
| | | $ | 82,418 |
| | | $ | 74,111 |
|
Kirkland's, Inc. W. Michael Madden, 615-872-4800 Senior Vice
President & CFO or Corporate Communications, Inc. Tripp
Sullivan, 615-324-7335
|
|