Attached files
| file | filename |
|---|---|
| 8-K - LIVE FILING - KIRKLAND'S, INC | htm_43603.htm |
| EX-99.2 - EX-99.2 - KIRKLAND'S, INC | exhibit2.htm |
News Release
| Contact: | W. Michael Madden Senior Vice President & CFO (615) 872-4800 |
Tripp Sullivan Corporate Communications, Inc. (615) 324-7335 |
KIRKLAND’S REPORTS THIRD QUARTER RESULTS
NASHVILLE, Tenn. (November 18, 2011) — Kirkland’s, Inc. (NASDAQ: KIRK) today reported financial results for the 13-week and 39-week periods ended October 29, 2011.
Net sales for the 13-week period ended October 29, 2011, were $97.1 million compared with $92.7 million for the 13-week period ended October 30, 2010. Comparable store sales for the third quarter of fiscal 2011 decreased 3.6% compared with a 2.4% decrease in the prior-year quarter. The Company opened 13 stores and closed 6 stores during the third quarter of 2011, bringing the total number of stores to 301 as of quarter’s end.
Net sales for the 39-week period ended October 29, 2011, were $281.2 million compared with $275.7 million for the 39-week period ended October 30, 2010. Comparable store sales for the 39 weeks ended October 29, 2011, decreased 6.7% compared with an increase of 3.5% in the prior-year period. The Company opened 23 stores and closed 22 stores during the 39-week period ended October 29, 2011.
The Company reported net income of $1.2 million, or $0.06 per diluted share, for the third quarter of fiscal 2011 compared with net income of $2.3 million, or $0.11 per diluted share, for the third quarter of fiscal 2010.
For the 39-week period ended October 29, 2011, the Company reported net income of $3.9 million, or $0.19 per diluted share, compared with net income of $12.0 million, or $0.59 per diluted share, for the 39-week period ended October 30, 2010.
Robert Alderson, Kirkland’s President and Chief Executive Officer, said, “We were pleased to realize improvement in our sales results for the third quarter, which were higher than originally anticipated due to better trends in the second half of the quarter. We experienced sequential improvement in our merchandise margin during the quarter, resulting in better-than-expected earnings results.
“During the quarter, we saw improvement in some of our important merchandising categories; however, we have more work to do. Inventories remain in good shape and well-balanced after successful execution in the third quarter. New store openings continue to produce strong initial sales results. Despite the delays that we have experienced in accessing space this year, we have a strong start to the 2012 store class. Our top priority is to enter fiscal 2012 with improving sales and earnings momentum, and thus far we are on track with that plan.”
Stock Repurchase Plan
During the third quarter of fiscal 2011, the Company repurchased 837,803 shares of common stock for
a total of $8.0 million, or an average price of $9.50 per share, and has repurchased an additional
80,548 shares since quarter end for a total of 918,351 shares. The Company has $31.1 million
remaining under its repurchase authorization.
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2501 McGavock Pike, Suite 1000 ¦ Nashville, Tennessee 37214 ¦ (615) 872-4800
KIRK Reports Third Quarter Results
Page 2
November 18, 2011
Fourth Quarter and Fiscal 2011 Outlook
| Store Growth: The Company expects to open approximately 8 net new stores in the fourth quarter of fiscal 2011, representing 9 net new stores for the year and square footage growth of approximately 10%. |
| Net Sales: | The Company expects net sales to be in the range of $142 million to $145 million in the fourth quarter of fiscal 2011, which would imply a comparable store sales decline of 2% to 5%. Total net sales for fiscal 2011 would range from $423 million to $426 million. |
|
| Earnings: | The Company expects to report earnings of $0.65 to $0.70 per diluted share in the fourth quarter of fiscal 2011, which would equate to earnings of $0.84 to $0.89 per diluted share for the full fiscal year 2011. |
|
| Cash Flow: | Capital expenditures are estimated to range between $25 million and $27 million for fiscal 2011. Cash and cash equivalents as of October 29, 2011 amounted to $60.3 million. Excluding the impact of potential share repurchase activity in the fourth quarter, the Company expects to have approximately $85 million to $90 million in cash and cash equivalents at year-end fiscal 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 third quarter of fiscal 2011. The number to call for the interactive teleconference is
(212) 231-2905. A replay of the conference call will be available through Friday, November 25,
2011, by dialing (402) 977-9140 and entering the confirmation number, 21543983.
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=83337 on November 18, 2011, 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 306 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. Although Kirkland’s believes that the Forward-looking statements in
this release involve reasonable expectations, it can give no assurance that such expectations will
prove to be correct and such statements of expectation should not be unduly relied upon.
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.
Kirkland’s disclaims any obligation to update any forward-looking statements or to publicly
announce results of any revisions to any of the forward-looking statements contained herein to
reflect future events or developments. Any factor described in this release or in any document
referred to in this release could, by itself or together with one or more other factors, adversely
affect Kirkland’s business, earnings and/or financial condition.
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KIRK Reports Third Quarter Results
Page 3
November 18, 2011
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(numbers in thousands, except per share amounts)
| 13 Week Period Ended | ||||||||
| October 29, | October 30, | |||||||
| 2011 | 2010 | |||||||
Net sales |
$ | 97,071 | $ | 92,725 | ||||
Cost of sales |
60,938 | 56,732 | ||||||
Gross profit |
36,133 | 35,993 | ||||||
Operating expenses: |
||||||||
Operating expenses |
31,295 | 29,081 | ||||||
Depreciation |
2,914 | 3,146 | ||||||
Operating income |
1,924 | 3,766 | ||||||
Other expense (income), net |
4 | (29 | ) | |||||
Income before income taxes |
1,920 | 3,795 | ||||||
Income tax provision |
673 | 1,516 | ||||||
Net income |
$ | 1,247 | $ | 2,279 | ||||
Earnings per share: |
||||||||
Basic |
$ | 0.06 | $ | 0.11 | ||||
Diluted |
$ | 0.06 | $ | 0.11 | ||||
Shares used to calculate earnings per share: |
||||||||
Basic |
19,918 | 19,889 | ||||||
Diluted |
20,204 | 20,522 | ||||||
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KIRK Reports Third Quarter Results
Page 4
November 18, 2011
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(numbers in thousands, except per share amounts)
| 39 Week Period Ended | ||||||||
| October 29, | October 30, | |||||||
| 2011 | 2010 | |||||||
Net sales |
$ | 281,175 | $ | 275,694 | ||||
Cost of sales |
176,108 | 164,243 | ||||||
Gross profit |
105,067 | 111,451 | ||||||
Operating expenses: |
||||||||
Operating expenses |
89,729 | 82,374 | ||||||
Depreciation |
8,888 | 9,294 | ||||||
Operating income |
6,450 | 19,783 | ||||||
Other income, net |
(1 | ) | (148 | ) | ||||
Income before income taxes |
6,451 | 19,931 | ||||||
Income tax provision |
2,514 | 7,882 | ||||||
Net income |
$ | 3,937 | $ | 12,049 | ||||
Earnings per share: |
||||||||
Basic |
$ | 0.20 | $ | 0.61 | ||||
Diluted |
$ | 0.19 | $ | 0.59 | ||||
Shares used to calculate earnings per share: |
||||||||
Basic |
19,930 | 19,839 | ||||||
Diluted |
20,498 | 20,588 | ||||||
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KIRK Reports Third Quarter Results
Page 5
November 18, 2011
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in thousands)
| October 29, 2011 | January 29, 2011 | October 30, 2010 | ||||||||||
ASSETS |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
$ | 60,343 | $ | 91,222 | $ | 58,831 | ||||||
Inventories, net |
59,940 | 44,452 | 56,851 | |||||||||
Income taxes receivable |
2,664 | — | 3,332 | |||||||||
Deferred income taxes |
2,174 | 3,528 | 4,013 | |||||||||
Other current assets |
11,176 | 7,468 | 8,321 | |||||||||
Total current assets |
136,297 | 146,670 | 131,348 | |||||||||
Property and equipment, net |
58,366 | 46,231 | 45,125 | |||||||||
Non-current deferred income taxes |
2,412 | 1,440 | 3,656 | |||||||||
Other assets |
1,176 | 736 | 684 | |||||||||
Total assets |
$ | 198,251 | $ | 195,077 | $ | 180,813 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
$ | 24,975 | $ | 20,236 | $ | 25,923 | ||||||
Income taxes payable |
— | 1,289 | — | |||||||||
Other current liabilities |
21,145 | 24,364 | 21,625 | |||||||||
Total current liabilities |
46,120 | 45,889 | 47,548 | |||||||||
Deferred rent and other long-term
liabilities |
35,023 | 30,899 | 30,332 | |||||||||
Total liabilities |
81,143 | 76,788 | 77,880 | |||||||||
Net shareholders’ equity |
117,108 | 118,289 | 102,933 | |||||||||
Total liabilities and shareholders’ equity |
$ | 198,251 | $ | 195,077 | $ | 180,813 | ||||||
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KIRK Reports Third Quarter Results
Page 6
November 18, 2011
KIRKLAND’S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(dollars in thousands)
| 39 Week Period Ended | ||||||||
| October 29, 2011 | October 30, 2010 | |||||||
Net cash provided by (used in): |
||||||||
Operating activities |
$ | (1,917 | ) | $ | (320 | ) | ||
Investing activities |
(21,175 | ) | (17,810 | ) | ||||
Financing activities |
(7,787 | ) | 549 | |||||
Cash and cash equivalents: |
||||||||
Net decrease |
(30,879 | ) | (17,581 | ) | ||||
Beginning of period |
91,222 | 76,412 | ||||||
End of period |
$ | 60,343 | $ | 58,831 | ||||
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