Mar 08, 2012 |
Kirkland's Reports Fourth Quarter and Fiscal 2011 Results |
Kirkland's, Inc. (NASDAQ: KIRK) today reported financial results for the
13-week and 52-week periods ended January 28, 2012.
Net sales, including gift card breakage revenue, for the 13-week period
ended January 28, 2012, increased 6.8% to $149.1 million compared with
$139.6 million for the 13-week period ended January 29, 2011. Comparable
store sales for the fourth quarter of fiscal 2011 increased 1.4%
compared with a decrease of 7.9% in the prior-year quarter. E-commerce
sales entered the base of comparable stores during December 2011, and
contributed 80 basis points to the overall comparable store sales
increase for the fourth quarter. The Company opened 11 stores and closed
3 during the fourth quarter of 2011, bringing the total number of stores
to 309 as of quarter's end.
Net sales, including gift card breakage revenue, for the 52-week period
ended January 28, 2012, increased 3.6% to $430.3 million compared with
$415.3 million for the 52-week period ended January 29, 2011. Comparable
store sales for fiscal 2011 decreased 4.0% compared with a 0.5% decrease
in fiscal 2010. The Company opened 34 stores and closed 25 during fiscal
2011.
The Company reported net income of $15.2 million, or $0.78 per diluted
share, for the fourth quarter of fiscal 2011 compared with net income of
$14.4 million, or $0.70 per diluted share, for the fourth quarter of
fiscal 2010. For fiscal 2011, the Company reported net income of $19.1
million, or $0.95 per diluted share, compared with net income of $26.4
million, or $1.28 per diluted share, in the prior-year period.
During the fourth quarter of fiscal 2011, the Company recorded a pre-tax
gain in the amount of $1.2 million related to a change in the estimate
of its loyalty program accrual due to the termination of the agreement
with its private-label credit card service provider. This gain is
included within cost of sales on the consolidated condensed statements
of income. During the fourth quarter of fiscal 2010, the Company's
income tax expense included a net benefit of $0.8 million related to an
adjustment to the Company's prior-year income tax provision partially
offset by an adjustment to the state tax rate applied to the Company's
deferred tax assets.
Robert Alderson, Kirkland's President and Chief Executive Officer, said,
"Consistent with our pre-announcement in early February, we finished the
fourth quarter on an encouraging note. We returned to positive
comparable store sales and eclipsed our original earnings estimates,
while making strong progress on our share repurchase plan. The positive
sales trends experienced during the fourth quarter continued through
February and, combined with our store growth plans and continued
acceleration in e-commerce sales, suggest moderate but steady
improvement in our business for fiscal 2012."
Stock Repurchase Plan
During the fourth quarter of fiscal 2011, the Company repurchased
1,194,992 shares of common stock for a total of $15.4 million, or an
average price of $12.90 per share. Since the inception of the repurchase
plan, the Company has repurchased 2,117,066 shares of common stock for a
total of $24.6 million, or an average price of $11.61 per share. The
Company has $15.4 million remaining under its repurchase authorization.
As of January 28, 2012, the Company had 18.4 million shares of common
stock outstanding.
Fiscal 2012 Performance Goals Store Growth: |
|
|
For the 53-week period ending February 2, 2013 ("fiscal 2012"), the
Company expects to open 35 to 45 new stores and close approximately
25 stores. This expected unit growth of approximately 3% to 6% would
represent an increase in square footage of approximately 9% to 13%.
New store openings will be weighted more toward the second half of
the year, while closings will be weighted more toward the first half.
| | | | | |
| Sales: | | |
The Company expects total sales for fiscal 2012 to increase in the
range of 10% to 12% compared with fiscal 2011. This expectation for
total sales growth reflects the additional week in the retail
calendar for Fiscal 2012. This level of sales growth would imply
comparable store sales of flat to slightly positive for the fiscal
year, excluding the impact of the additional week of sales.
| | | | | |
| Margins: | | |
Based on the current outlook, the Company expects operating margin
in fiscal 2012 to be approximately equal to that of fiscal 2011
with continued benefits from lower inbound freight costs –
particularly in the first half of the year – and improved
merchandise performance, offset slightly by an expected increase
in fuel costs impacting outbound transportation, a planned
increase in marketing expenses, as well as investments in
additional personnel in key areas of the business to support the
Company's growth plans and technology investments.
|
| | | | |
| Earnings: | | |
Based on the above assumptions, the Company expects earnings per
share for fiscal 2012 to be in the range of $1.10 to $1.15. The
Company expects its effective tax rate for fiscal 2012 to range
between 38% and 38.5%.
| | | | | |
| Cash Flow: | | |
Excluding activity under the Company's share repurchase program, the
Company expects to again generate positive cash flow in fiscal 2012.
Capital expenditures in fiscal 2012 are estimated to range between
$29 million and $32 million.
| | | | | |
|
First Quarter Fiscal 2012 Outlook
The Company issued guidance for the first quarter ending April 28, 2012,
of net income of $0.11 to $0.14 per diluted share. Net sales are
expected to be $98 million to $100 million, with comparable store sales
flat to slightly positive. The Company expects to open approximately 5
stores and close approximately 15 stores during the quarter.
Investor Conference Call and Web Simulcast
Kirkland's will host a conference call today, at 11:00 a.m. ET to
discuss its results of operations for the fourth quarter of fiscal 2011.
The number to call for the interactive teleconference is (212) 231-2919.
A replay of the conference call will be available through Thursday,
March 15, 2012, by dialing (402) 977-9140 and entering the confirmation
number, 21575913.
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=84811
on March 8, 2012, 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 299 stores in 30 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 14, 2011.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 | (dollars in thousands, except per share amounts) | |
| |
|
|
| | | | 13-Week Period Ended | | | January 28, | | | | January 29, | | | 2012 | | | | 2011 | | | | | | |
|
Net sales
| |
$
|
149,110
| | | |
$
|
139,606
|
Cost of sales
| |
|
84,982
| | | |
|
80,521
|
Gross profit
| | |
64,128
| | | | |
59,085
| | | | | | |
|
Operating expenses:
| | | | | | |
Operating expenses
| | |
36,551
| | | | |
33,371
|
Depreciation
| |
|
3,522
| | | |
|
3,523
|
Operating income
| | |
24,055
| | | | |
22,191
| | | | | | |
|
Other income, net
| |
|
64
| | | |
|
46
|
Income before income taxes
| | |
24,119
| | | | |
22,237
|
Income tax expense
| |
|
8,941
| | | |
|
7,855
|
Net income
| |
$
|
15,178
| | | |
$
|
14,382
| | | | | | |
|
Earnings per share:
| | | | | | |
Basic
| |
$
|
0.80
| | | |
$
|
0.72
|
Diluted
| |
$
|
0.78
| | | |
$
|
0.70
| | | | | | |
|
Shares used to calculate earnings per share:
| | | | | | |
Basic
| |
|
19,037
| | | |
|
19,902
|
Diluted
| |
|
19,413
| | | |
|
20,549
|
|
| KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME | (dollars in thousands, except per share amounts) | |
| |
|
|
| | | | 52-Week Period Ended | | | January 28, | | | | January 29, | | | 2012 | | | | 2011 | | | | | | |
|
Net sales
| |
$
|
430,285
| | | |
$
|
415,300
|
Cost of sales
| |
|
261,091
| | | |
|
244,764
|
Gross profit
| | |
169,194
| | | | |
170,536
| | | | | | |
|
Operating expenses:
| | | | | | |
Operating expenses
| | |
126,279
| | | | |
115,745
|
Depreciation
| |
|
12,410
| | | |
|
12,817
|
Operating income
| | |
30,505
| | | | |
41,974
| | | | | | |
|
Other income, net
| |
|
65
| | | |
|
194
|
Income before income taxes
| | |
30,570
| | | | |
42,168
|
Income tax expense
| |
|
11,455
| | | |
|
15,737
|
Net income
| |
$
|
19,115
| | | |
$
|
26,431
| | | | | | |
|
Earnings per share:
| | | | | | |
Basic
| |
$
|
0.97
| | | |
$
|
1.33
|
Diluted
| |
$
|
0.95
| | | |
$
|
1.28
| | | | | | |
|
Shares used to calculate earnings per share:
| | | | | | |
Basic
| |
|
19,707
| | | |
|
19,855
|
Diluted
| |
|
20,227
| | | |
|
20,578
|
|
| KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS | (dollars in thousands) | | | | | |
| |
|
|
| | | | | | | | | | | |
| | | | | | | January 28, | | | | January 29, | | | | | | | 2012 | | | | 2011 | ASSETS | | | | | | | | | | | | | | | | | | | | |
|
Current assets:
| | | | | | | | | |
Cash and cash equivalents
| | | |
$
|
83,123
| | | |
$
|
91,222
|
Inventories, net
| | | | | |
47,306
| | | | |
44,452
|
Deferred income taxes
| | | | |
1,657
| | | | |
3,528
|
Other current assets
| | | |
|
7,784
| | | |
|
7,468
|
Total current assets
| | | | |
139,870
| | | | |
146,670
| | | | | | | | | | |
|
Property and equipment, net
| | | | |
60,315
| | | | |
46,231
|
Non-current deferred income taxes
| | | |
1,108
| | | | |
1,440
|
Other assets
| | | | |
|
1,296
| | | |
|
736
| | | | | | | | | | |
|
Total assets
| | | | |
$
|
202,589
| | | |
$
|
195,077
| | | | | | | | | | |
| | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | | |
|
Current liabilities:
| | | | | | | | | |
Accounts payable
| |
$
|
21,592
| | | |
$
|
20,236
|
Income taxes payable
| | | | |
3,146
| | | | |
1,289
|
Other current liabilities
| | | |
|
21,805
| | | |
|
24,364
|
Total current liabilities
| | | | |
46,543
| | | | |
45,889
| | | | | | | | | | |
|
Deferred rent and other long-term liabilities
| |
|
38,384
| | | |
|
30,899
|
Total liabilities
| | | | |
|
84,927
| | | |
|
76,788
| | | | | | | | | | |
|
Net shareholders' equity
| | | |
|
117,662
| | | |
|
118,289
| | | | | | | | | | |
|
Total liabilities and shareholders' equity
| |
$
|
202,589
| | | |
$
|
195,077
| | | | | | | | |
|
| KIRKLAND'S, INC. | UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | (dollars in thousands) |
| |
| |
|
|
| | | | | 52-Week Period Ended | | | | January 28, | | | | January 29, | | | | 2012 | | | | 2011 | Net cash provided by (used in): | | | | | | | | | | | | | |
| |
Operating activities
| |
$
|
41,765
| | | | |
$
|
36,700
| | |
Investing activities
| | |
(26,652
|
)
| | | | |
(22,596
|
)
| |
Financing activities
| |
| (23,212 | ) | | | |
| 706 |
| | | | | | | |
| Cash and cash equivalents: | | | | | | | |
Net increase (decrease)
| | |
(8,099
|
)
| | | | |
14,810
| | |
Beginning of the period
| |
| 91,222 |
| | | |
| 76,412 |
| |
End of the period
| | $ | 83,123 |
| | | | $ | 91,222 |
|
|
Kirkland's, Inc. W. Michael Madden, 615-872-4800 Senior Vice
President & CFO or Corporate Communications, Inc. Tripp
Sullivan, 615-324-7335
|
|