Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - KIRKLAND'S, INC | g27972e8vk.htm |
| EX-99.2 - EX-99.2 - KIRKLAND'S, INC | g27972exv99w2.htm |
| EX-10.2 - EX-10.2 - KIRKLAND'S, INC | g27972exv10w2.htm |
| EX-10.1 - EX-10.1 - KIRKLAND'S, INC | g27972exv10w1.htm |
Exhibit 99.1
News Release
Contact:
|
W. Michael Madden | Tripp Sullivan | ||
| Senior Vice President & CFO | Corporate Communications, Inc. | |||
| (615) 872-4800 | (615) 324-7335 |
KIRKLAND’S REPORTS SECOND QUARTER RESULTS
Announces $40 Million Stock Repurchase Authorization
Announces $40 Million Stock Repurchase Authorization
NASHVILLE, Tenn. (August 19, 2011) — Kirkland’s, Inc. (NASDAQ: KIRK) today reported financial
results for the 13-week and 26-week periods ended July 30, 2011.
Net sales for the 13-week period ended July 30, 2011, were $89.7 million compared with $89.5
million for the 13-week period ended July 31, 2010. Comparable store sales for the second quarter
of fiscal 2011 decreased 8.0% compared with a 1.0% increase in the prior-year quarter. The Company
opened 7 stores and closed 6 stores during the second quarter of 2011, bringing the total number of
stores to 294 as of quarter’s end.
Net sales for the 26-week period ended July 30, 2011, were $184.1 million compared with $183.0
million for the 26-week period ended July 31, 2010. Comparable store sales for the 26 weeks ended
July 30, 2011, decreased 8.2% compared with an increase of 6.6% in the prior-year period. The
Company opened 10 stores and closed 16 stores during the 26-week period.
The Company reported a net loss of $0.5 million, or $0.02 per diluted share, for the second quarter
of fiscal 2011 compared with net income of $3.3 million, or $0.16 per diluted share, for the second
quarter of fiscal 2010.
For the 26-week period ended July 30, 2011, the Company reported net income of $2.7 million, or
$0.13 per diluted share, compared with net income of $9.8 million, or $0.47 per diluted share, for
the 26-week period ended July 31, 2010.
Robert Alderson, Kirkland’s President and Chief Executive Officer, said, “Our second quarter sales
and margin results were less than we had expected. A more aggressive than planned markdown cadence
was necessary throughout the quarter to keep our inventories well-positioned as we entered the
second half of the year. We continue to focus on new merchandise initiatives, but expect the
third quarter to look much like the second quarter should current trends continue.
“Recent economic tumult may further impact consumer sentiment and spending in the back half, but we
are financially well-positioned to continue our controlled growth and weather an uncertain economic
environment. Our Board’s decision to commence a stock repurchase program and the agreement to
renew our $50 million credit facility signal our confidence in the future of Kirkland’s.”
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2501 McGavock Pike, Suite 1000 Nashville, Tennessee 37214 (615) 872-4800
KIRK Reports Second Quarter Results
Page 2
August 19, 2011
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August 19, 2011
Stock Repurchase Authorization of $40 Million
The Board of Directors has authorized a stock repurchase plan providing for the purchase in the
aggregate of up to $40 million of the Company’s outstanding common stock over the next 18 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 July 30, 2011, the Company had 20.2 million common shares
outstanding.
$50 Million Senior Secured Credit Facility
The Company also announced that it has agreed to renew its $50 million senior secured credit
facility led by Bank of America, N.A., as administrative agent. The facility will mature in August
2016 and will bear interest at an annual rate equal to LIBOR plus a margin ranging from 175 to 225
basis points with no LIBOR floor and no financial maintenance covenants.
Fiscal 2011 Outlook
At quarter end, the Company had 294 stores compared with 300 at the beginning of 2011 and 286 at
the end of the prior-year period. For fiscal 2011, the Company now expects to open approximately
15-20 net new stores, representing square footage growth of 9% to 12%. New store opening activity
will be heavily weighted toward the second half of the year. Store closings will typically
coincide with replacement store openings.
The Company expects to fully fund its new store growth and technology improvements through cash
generated from operations. Capital expenditures are estimated to range between $24 million and $27
million for fiscal 2011. Cash and cash equivalents as of July 30, 2011 amounted to $75.1 million.
Without taking into account any potential share repurchase activity, the Company expects to have
approximately $90 million to $100 million in cash and cash equivalents at year-end fiscal 2011.
For the third quarter ending October 29, 2011, the Company expects sales and earnings results to be
similar to those reported for the second quarter of fiscal 2011. Total sales and merchandise
margin are expected to be sequentially higher, but should be offset by the impact from higher
occupancy and operating expenses associated with a large number of store openings in the third
quarter.
For the second half of fiscal 2011, the Company expects to continue with new store and square
footage growth plans, deliver strong new store performance and generate significant cash flow.
However, given the current trends in the business and the uncertain economic outlook in the U.S.,
the all-important fourth quarter holiday shopping season is difficult to predict at this time. As a
result, the Company will provide details on its outlook for the fourth quarter when it announces
its results for the third quarter in November 2011.
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 second quarter of fiscal 2011. The number to call for the interactive teleconference is
(212) 231-2900. A replay of the conference call will be available through Friday, August 26, 2011,
by dialing (402) 977-9140 and entering the confirmation number, 21533188.
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=81493 on August 26, 2011, beginning at 11:00 a.m. ET. The
online replay will follow shortly after the call and continue for one year.
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KIRK Reports Second Quarter Results
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August 19, 2011
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August 19, 2011
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 294 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.
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.
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KIRK Reports Second Quarter Results
Page 4
August 19, 2011
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August 19, 2011
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(numbers in thousands, except per share amounts)
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(numbers in thousands, except per share amounts)
| 13 Week Period Ended | ||||||||
| July 30, | July 31, | |||||||
| 2011 | 2010 | |||||||
Net sales |
$ | 89,701 | $ | 89,504 | ||||
Cost of sales |
58,856 | 54,682 | ||||||
Gross profit |
30,845 | 34,822 | ||||||
Operating expenses: |
||||||||
Operating expenses |
28,752 | 26,637 | ||||||
Depreciation |
2,733 | 3,121 | ||||||
Operating income (loss) |
(640 | ) | 5,064 | |||||
Other income, net |
(42 | ) | (95 | ) | ||||
Income (loss) before income taxes |
(598 | ) | 5,159 | |||||
Income tax provision (benefit) |
(118 | ) | 1,907 | |||||
Net income (loss) |
$ | (480 | ) | $ | 3,252 | |||
Earnings (loss) per share: |
||||||||
Basic |
$ | (0.02 | ) | $ | 0.16 | |||
Diluted |
$ | (0.02 | ) | $ | 0.16 | |||
Shares used to calculate earnings (loss) per
share: |
||||||||
Basic |
19,957 | 19,852 | ||||||
Diluted |
19,957 | 20,636 | ||||||
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KIRK Reports Second Quarter Results
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August 19, 2011
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August 19, 2011
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(numbers in thousands, except per share amounts)
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(numbers in thousands, except per share amounts)
| 26 Week Period Ended | ||||||||
| July 30, | July 31, | |||||||
| 2011 | 2010 | |||||||
Net sales |
$ | 184,104 | $ | 182,969 | ||||
Cost of sales |
115,171 | 107,511 | ||||||
Gross profit |
68,933 | 75,458 | ||||||
Operating expenses: |
||||||||
Operating expenses |
58,433 | 53,293 | ||||||
Depreciation |
5,974 | 6,148 | ||||||
Operating income |
4,526 | 16,017 | ||||||
Other income, net |
(5 | ) | (119 | ) | ||||
Income before income taxes |
4,531 | 16,136 | ||||||
Income tax provision |
1,841 | 6,366 | ||||||
Net income |
$ | 2,690 | $ | 9,770 | ||||
Earnings per share: |
||||||||
Basic |
$ | 0.13 | $ | 0.49 | ||||
Diluted |
$ | 0.13 | $ | 0.47 | ||||
Shares used to calculate earnings per share: |
||||||||
Basic |
19,936 | 19,814 | ||||||
Diluted |
20,645 | 20,622 | ||||||
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KIRK Reports Second Quarter Results
Page 6
August 19, 2011
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August 19, 2011
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in thousands)
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in thousands)
| July 30, 2011 | January 29, 2011 | July 31, 2010 | ||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
$ | 75,106 | $ | 91,222 | $ | 65,688 | ||||||
Inventories, net |
47,656 | 44,452 | 43,413 | |||||||||
Income taxes receivable |
3,880 | — | 3,478 | |||||||||
Deferred income taxes |
3,274 | 3,528 | 3,309 | |||||||||
Other current assets |
9,283 | 7,468 | 7,310 | |||||||||
Total current assets |
139,199 | 146,670 | 123,198 | |||||||||
Property and equipment, net |
51,940 | 46,231 | 39,660 | |||||||||
Non-current deferred income taxes |
1,394 | 1,440 | 4,314 | |||||||||
Other assets |
847 | 736 | 634 | |||||||||
Total assets |
$ | 193,380 | $ | 195,077 | $ | 167,806 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
$ | 17,011 | $ | 20,236 | $ | 18,419 | ||||||
Income taxes payable |
— | 1,289 | — | |||||||||
Other current liabilities |
21,527 | 24,364 | 21,878 | |||||||||
Total current liabilities |
38,538 | 45,889 | 40,297 | |||||||||
Deferred rent and other long-term
liabilities |
31,997 | 30,899 | 27,723 | |||||||||
Total liabilities |
70,535 | 76,788 | 68,020 | |||||||||
Net shareholders’ equity |
122,845 | 118,289 | 99,786 | |||||||||
Total liabilities and shareholders’ equity |
$ | 193,380 | $ | 195,077 | $ | 167,806 | ||||||
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KIRK Reports Second Quarter Results
Page 7
August 19, 2011
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August 19, 2011
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(dollars in thousands)
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(dollars in thousands)
| 26 Week Period Ended | ||||||||
| July 30, 2011 | July 31, 2010 | |||||||
Net cash provided by (used in): |
||||||||
Operating activities |
$ | (5,606 | ) | $ | (2,056 | ) | ||
Investing activities |
(11,811 | ) | (9,147 | ) | ||||
Financing activities |
1,301 | 479 | ||||||
Cash and cash equivalents: |
||||||||
Net decrease |
(16,116 | ) | (10,724 | ) | ||||
Beginning of period |
91,222 | 76,412 | ||||||
End of period |
$ | 75,106 | $ | 65,688 | ||||
-END-