Back to GetFilings.com



Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
Form 10-Q
 
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Fiscal Quarter Ended November 30, 2002
 
OR
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission File Number 0-21915
 

 
COLDWATER CREEK INC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
82-0419266
(State of other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
ONE COLDWATER CREEK DRIVE, SANDPOINT, IDAHO 83864
(Address of principal executive offices)
 
(208) 263-2266
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  YES  x    NO  ¨
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  YES  x    NO  ¨
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
 
Class

    
Shares outstanding as of January 6, 2003

Common Stock ($.01 par value)
    
15,975,674
 


Table of Contents
INDEX TO FORM 10-Q
 
 
         
Page

  
3
Item 1.
     
3
       
3
       
4
       
5
       
6
Item 2.
     
15
Item 3.
     
31
Item 4.
     
31
  
32
Item 1.
     
32
Item 2.
     
32
Item 3.
     
32
Item 4.
     
32
Item 5.
     
32
Item 6.
     
32

2


Table of Contents
PART I.    FINANCIAL INFORMATION
 
ITEM 1.
  
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
 
COLDWATER CREEK INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except for share data)
 
    
November 30,
2002

    
March 2,
2002

 
ASSETS
                 
Current assets:
                 
Cash and cash equivalents
  
$
19,247
 
  
$
4,989
 
Receivables
  
 
10,859
 
  
 
4,927
 
Inventories
  
 
80,038
 
  
 
64,295
 
Prepaid and other
  
 
4,090
 
  
 
5,923
 
Prepaid and deferred catalog costs
  
 
14,314
 
  
 
7,770
 
Deferred income taxes
  
 
2,250
 
  
 
2,250
 
    


  


Total current assets
  
 
130,798
 
  
 
90,154
 
Property and equipment, net
  
 
81,753
 
  
 
78,282
 
Executive Loans
  
 
548
 
  
 
811
 
    


  


Total assets
  
$
213,099
 
  
$
169,247
 
    


  


LIABILITIES AND STOCKHOLDERS’ EQUITY
                 
Current liabilities:
                 
Accounts payable
  
$
69,188
 
  
$
46,514
 
Accrued liabilities
  
 
23,584
 
  
 
16,961
 
Income taxes payable
  
 
2,720
 
  
 
—  
 
    


  


Total current liabilities
  
 
95,492
 
  
 
63,475
 
Deferred income taxes
  
 
1,794
 
  
 
3,794
 
Deferred rents
  
 
11,632
 
  
 
7,050
 
    


  


Total liabilities
  
 
108,918
 
  
 
74,319
 
    


  


Commitments and contingencies
                 
Stockholders’ equity:
                 
Preferred stock, $.01 par value, 1,000,000 shares authorized, none issued and outstanding
  
 
—  
 
  
 
—  
 
Common stock, $.01 par value, 60,000,000 shares authorized, 16,161,449 and 16,047,873 shares issued, respectively (1)
  
 
162
 
  
 
160
 
Additional paid-in capital
  
 
51,017
 
  
 
49,609
 
Treasury shares, at cost, 209,100 shares
  
 
(4,715
)
  
 
(4,715
)
Retained earnings (1)
  
 
57,717
 
  
 
49,874
 
    


  


Total stockholders’ equity
  
 
104,181
 
  
 
94,928
 
    


  


Total liabilities and stockholders’ equity
  
$
213,099
 
  
$
169,247
 
    


  



(1)
 
The above common stock issued and retained earnings amounts have been adjusted to reflect a 50% stock dividend in the form of a 3-for-2 stock split declared by the Board of Directors on December 19, 2002. Please refer to Note 11—“Post Balance Sheet Event—Stock Dividend” and Note 7—“Net Income Per Share” for further details.
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

3


Table of Contents
COLDWATER CREEK INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except for per share data)
 
    
Three Months Ended

  
Nine Months Ended

    
November 30,
2002

  
December 1,
2001

  
November 30,
2002

  
December 1,
2001

Statements of Operations:
                           
Net sales
  
$
153,802
  
$
141,707
  
$
358,623
  
$
347,423
Cost of sales
  
 
88,414
  
 
79,245
  
 
208,179
  
 
196,247
    

  

  

  

Gross profit
  
 
65,388
  
 
62,462
  
 
150,444
  
 
151,176
Selling, general and administrative expenses
  
 
55,987
  
 
59,991
  
 
137,394
  
 
144,581
    

  

  

  

Income from operations
  
 
9,401
  
 
2,471
  
 
13,050
  
 
6,595
Interest, net, and other
  
 
57
  
 
106
  
 
83
  
 
343
    

  

  

  

Income before income taxes
  
 
9,458
  
 
2,577
  
 
13,133
  
 
6,938
Income tax provision
  
 
3,735
  
 
999
  
 
5,288
  
 
2,687
    

  

  

  

Net income
  
$
5,723
  
$
1,578
  
$
7,845
  
$
4,251
    

  

  

  

Net income per share—Basic (1)
  
$
0.36
  
$
0.10
  
$
0.49
  
$
0.27
    

  

  

  

Weighted average shares outstanding—Basic (1)
  
 
15,953
  
 
15,786
  
 
15,923
  
 
15,915
Net income per share—Diluted (1)
  
$
0.36
  
$
0.10
  
$
0.49
  
$
0.26
    

  

  

  

Weighted average shares outstanding—Diluted (1)
  
 
16,001
  
 
16,125
  
 
16,067
  
 
16,287

(1)
 
The above weighted average shares outstanding and net income per share amounts have been adjusted to reflect a 50% stock dividend in the form of a 3-for-2 stock split declared by the Board of Directors on December 19, 2002. Please refer to Note 11—“Post Balance Sheet Event—Stock Dividend” and Note 7—“Net Income Per Share” for further details.
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

4


Table of Contents
COLDWATER CREEK INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
    
Nine Months Ended

 
    
November 30, 2002

    
December 1, 2001

 
OPERATING ACTIVITIES:
                 
Net income
  
$
7,845
 
  
$
4,251
 
Non cash items:
                 
Depreciation and amortization
  
 
11,448
 
  
 
8,897
 
Deferred rents
  
 
(271
)
  
 
(39
)
Contributed services
  
 
227
 
  
 
—  
 
Deferred income taxes
  
 
(2,000
)
  
 
—  
 
Other
  
 
353
 
  
 
—  
 
Net change in current assets and liabilities:
                 
Receivables
  
 
(488
)
  
 
(3,153
)
Inventories
  
 
(15,743
)
  
 
(5,604
)
Prepaid and other
  
 
2,127
 
  
 
(830
)
Prepaid and deferred catalog costs
  
 
(6,544
)
  
 
661
 
Accounts payable
  
 
22,674
 
  
 
26,555
 
Accrued liabilities
  
 
6,147
 
  
 
2,517
 
Current income tax liabilities
  
 
2,720
 
  
 
—  
 
    


  


Net cash provided by operating activities
  
 
28,495
 
  
 
33,255
 
    


  


INVESTING ACTIVITIES:
                 
Purchase of property and equipment
  
 
(15,347
)
  
 
(28,031
)
Executive loan repayments
  
 
263
 
  
 
251
 
    


  


Net cash used in investing activities
  
 
(15,084
)
  
 
(27,780
)
    


  


FINANCING ACTIVITIES:
                 
Net proceeds from exercises of stock options
  
 
900
 
  
 
804
 
Common shares repurchased for treasury
  
 
—  
 
  
 
(4,715
)
Other financing costs
  
 
(53
)
  
 
(53
)
    


  


Net cash provided by (used in) financing activities
  
 
847
 
  
 
(3,964
)
    


  


Net increase in cash and cash equivalents
  
 
14,258
 
  
 
1,511
 
Cash and cash equivalents, beginning
  
 
4,989
 
  
 
4,600
 
    


  


Cash and cash equivalents, ending
  
$
19,247
 
  
$
6,111
 
    


  


SUPPLEMENTAL CASH FLOW DATA:
                 
Cash paid for interest
  
$
2
 
  
$
14
 
Cash paid for income taxes
  
 
1,137
 
  
 
2,337
 
Tax benefit from exercises of stock options
  
 
281
 
  
 
207
 
Deferred rent
  
 
5,444
 
  
 
5,434
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5


Table of Contents
COLDWATER CREEK INC. AND SUBSIDIARIES
 
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<