SOURCE: Gordmans Stores, Inc.
March 17, 2011 16:00 ET
Gordmans Stores, Inc. Announces Fourth Quarter and Fiscal Year 2010 Results
Fourth Quarter -- Net Income Increased 36.1% to $8.4 million; Diluted EPS Was $0.44; Comparable Store Sales Up 6.0%; Fiscal Year 2010 -- Adjusted Net Income Increased 45.7% to $23.1 million; Adjusted Diluted EPS Was $1.32; Comparable Store Sales Up 8.4%
OMAHA, NE--(Marketwire - March 17, 2011) - Gordmans Stores, Inc. (NASDAQ: GMAN), an
Omaha-based apparel and home décor retailer, today announced results for
its fourth quarter (thirteen weeks) and fiscal year (fifty-two weeks) ended
January 29, 2011.
Fourth Quarter Highlights
-- Net sales increased 9.3% to $168.4 million compared to $154.0 million
in the fourth quarter of fiscal 2009.
-- Comparable store sales increased 6.0% over the fourth quarter of
fiscal 2009.
-- Gross profit margin increased 80 basis points over the fourth quarter
of fiscal 2009.
-- Net income increased 36.1% to $8.4 million compared to $6.2 million in
the fourth quarter of fiscal 2009.
-- Diluted earnings per share were $0.44.
Fiscal Year 2010 Highlights
-- Net sales increased 13.0% to a record $517.0 million compared to
$457.5 million for fiscal year 2009.
-- Comparable store sales increased 8.4% over fiscal year 2009.
-- Gross profit margin increased 100 basis points over fiscal year 2009.
-- Adjusted net income, excluding pre-tax, non-recurring charges of $11.8
million, increased 45.7% to $23.1 million compared to $15.9 million in
fiscal year 2009.
-- Adjusted diluted earnings per share were $1.32, excluding pre-tax,
non-recurring expenses of $11.8 million, compared to $0.99 for fiscal
year 2009.
-- Diluted earnings per share were $0.89.
Jeff Gordman, President and Chief Executive Officer, stated: "Gordmans
delivered strong operating results for the fourth quarter driven primarily
by comparable stores sales growth and enhanced gross profit margins. We
are pleased with the progress we have made on several key merchandising,
marketing and inventory management initiatives that we believe drove sales
and earnings growth during the fourth quarter and the year. We are
optimistic with respect to our outlook for fiscal year 2011, during which
we expect to open six new stores, relocate one store and enter two new
major markets."
Fourth Quarter Financial Results
Net sales for the thirteen weeks ended January 29, 2011 increased 9.3% to
$168.4 million from $154.0 million for the same period last year, which
translated into a 6.0% comparable store sales increase. Gross profit
increased by 11.6% to $67.1 million, or 39.8% of net sales, from $60.1
million, or 39.0% of net sales, in the fourth quarter of fiscal 2009.
Selling, general and administrative costs were $53.3 million, or 31.7% of
net sales, compared to $50.1 million, or 32.5% of net sales, in the fourth
quarter of fiscal 2009. The Company reported a 36.1% increase in net income
to $8.4 million, or $0.44 per diluted share, compared to net income of $6.2
million, or $0.38 per diluted share, in the fourth quarter of fiscal 2009.
Fiscal Year 2010 Financial Results
Net sales for the fiscal year ended January 29, 2011 increased 13.0% to a
record $517.0 million from $457.5 million in fiscal year 2009, with
comparable store sales increasing 8.4%. Gross profit increased by 15.6% to
$224.3 million, or 43.4% of net sales, in fiscal year 2010, from $194.0
million, or 42.4% of net sales, in the prior fiscal year. Selling, general
and administrative expenses were $198.3 million in fiscal year 2010,
including one-time, pre-tax expenses of $11.8 million related to the
initial public offering. Excluding these one-time expenses, non-GAAP
adjusted selling, general and administrative expenses as a percentage of
net sales decreased by 60 basis points during fiscal year 2010 to 36.1% of
net sales compared to 36.7% of net sales in the prior fiscal year. Net
income was $15.6 million, or $0.89 per diluted share, compared to net
income of $15.9 million, or $0.99 per diluted share, in the prior fiscal
year. Excluding the one-time expenses mentioned previously, non-GAAP
adjusted net income for fiscal year 2010 increased 45.7% to $23.1 million
over the prior fiscal year, and diluted earnings per share were $1.32
(using a diluted share count of 17.5 million).
Outlook
For the first quarter of fiscal 2011 ending April 30, 2011, the Company
currently expects net sales to be between $119 million and $121 million,
which reflects a low single digit comparable store sales increase. The
Company projects diluted earnings per share in the range of $0.34 to $0.36
(using a diluted share count of approximately 19.3 million). For the
fiscal year ending January 28, 2012, the Company expects net sales to be
between $563 and $571 million, which also reflects a low single digit
comparable store sales increase. The Company projects diluted earnings per
share in the range of $1.30 to $1.35 (using a diluted share count of
approximately 19.3 million).
Conference Call Information
A conference call to discuss fourth quarter financial results is scheduled
for today, March 17, 2011 at 4:30 p.m. Eastern Time. The conference call
will be webcast live at http://investor.gordmans.com/events.cfm. A replay
of this call will be available within two hours of the conclusion of the
call and will remain on the website for one year.
About Gordmans Stores, Inc.
Gordmans (NASDAQ: GMAN) features a large selection of the latest name
brands, fashions and styles at up to 60 percent off department and
specialty store prices every day. The wide range of merchandise includes
apparel for all ages, accessories, footwear, home décor, gifts, designer
fragrances, fashion jewelry, bedding and bath, accent furniture and toys.
Founded in 1915, Gordmans operates 68 stores in 16 Midwestern and
surrounding states. For more information about Gordmans, visit
www.gordmans.com.
Safe Harbor Language
Certain statements in this release are "forward-looking statements" made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Words such as "guidance," "expects," "intends,"
"projects," "plans," "believes," "estimates," "targets," "anticipates," and
similar expressions are used to identify these forward-looking statements.
Examples of forward-looking statements include, but are not limited to,
statements regarding expected net sales, net income, comparable store
sales, diluted earnings per share, and store expansion, as well as any
other statement that does not directly relate to any historical or current
fact.
Forward-looking statements are based on our current expectations and
assumptions, which may not prove to be accurate. These statements are not
guarantees and are subject to risks, uncertainties and changes in
circumstances that are difficult to predict. Many factors could cause
actual results to differ materially and adversely from these
forward-looking statements. Among these factors are (1) changes in consumer
spending and general economic conditions; (2) our ability to identify and
respond to new and changing fashion trends, guest preferences and other
related factors; (3) fluctuations in our sales and results of operations on
a seasonal basis; (4) intense competition from other retailers; (5) our
ability to maintain or improve levels of comparable store sales; (6) our
successful implementation of advertising, marketing and promotional
strategies; (7) termination of our license agreements; (8) our ability to
obtain merchandise at acceptable prices; (9) shortages of inventory and
harm to our reputation due to difficulties or shut-down of our distribution
facilities; (10) our reliance on independent third-party transportation
providers for substantially all of our merchandise shipments; (11)
political or financial instability in countries where merchandise we sell
is manufactured; (12) our growth strategy, including the ability to
identify acceptable store locations at appropriate costs; (13) our
dependence on a strong brand image; (14) the inability to find a sufficient
number of store associates that reflect our brand image and embody our
culture; (15) our dependence upon key executive management; (16) our
reliance on information systems; (17) system security risk issues that
could disrupt our internal operations or information technology services;
(18) changes in laws and regulations applicable to our business; (19) our
inability to protect our trademarks or other intellectual property rights;
(20) fluctuations in energy costs; (21) claims made against us resulting in
litigation; (22) impairment on our long-lived assets; (23) our substantial
lease obligations; and (24) restrictions imposed by our indebtedness on our
current and future operations.
Additional information concerning these and other factors can be found in
our filings with the Securities and Exchange Commission, including our
Registration Statement on Form S-1 (File No. 333-166436), as amended,
quarterly reports on Form 10-Q, and current reports on Form 8-K. Any
forward-looking statement speaks only as of the date on which it is made,
and we undertake no obligation to publicly update or revise any
forward-looking statement as a result of new information, future events or
otherwise, except as otherwise required by law.
GORDMANS STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in 000's)
January 29, January 30,
2011 2010
----------- -----------
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 29,368 $ 16,601
Accounts receivable 1,557 2,544
Landlord receivable 2,077 423
Income tax receivable 1,375 --
Merchandise inventories 59,775 49,291
Deferred income taxes 2,417 2,491
Prepaid expenses 5,394 4,581
----------- -----------
Total current assets 101,963 75,931
PROPERTY AND EQUIPMENT, net 18,240 10,444
INTANGIBLE ASSETS, net 2,166 2,262
DEFERRED INCOME TAXES 486 1,050
OTHER ASSETS 2,279 2,431
----------- -----------
TOTAL ASSETS $ 125,134 $ 92,118
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 36,833 $ 30,685
Income taxes payable -- 3,715
Accrued expenses 26,672 24,633
Notes payable, current portion 1,508 667
Capital lease obligations, current portion 424 68
----------- -----------
Total current liabilities 65,437 59,768
----------- -----------
NONCURRENT LIABILITIES:
Notes payable, net of current portion 326 778
Capital lease obligations, net of current portion 630 --
Deferred rent 6,655 4,686
Other liabilities 33 937
----------- -----------
Total noncurrent liabilities 7,644 6,401
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock -- --
Common stock 19 15
Additional paid-in capital 50,830 20,328
Retained earnings 1,204 5,606
----------- -----------
Total stockholders' equity 52,053 25,949
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 125,134 $ 92,118
=========== ===========
GORDMANS STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in 000's except share data)
13 Weeks 13 Weeks 52 Weeks 52 Weeks
Ended Ended Ended Ended
January 29, January 30, January 29, January 30,
2011 2010 2011 2010
(Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Net sales $ 168,386 $ 154,034 $ 517,001 $ 457,533
License fees from
leased departments 1,678 1,620 6,321 5,679
Cost of sales (102,984) (95,573) (299,060) (269,177)
----------- ----------- ----------- -----------
Gross profit 67,080 60,081 224,262 194,035
Selling, general and
administrative
expenses (53,319) (50,081) (198,302) (167,842)
----------- ----------- ----------- -----------
Income from
operations 13,761 10,000 25,960 26,193
Interest expense (173) (192) (744) (1,052)
----------- ----------- ----------- -----------
Income before taxes 13,588 9,808 25,216 25,141
Income tax expense (5,163) (3,618) (9,618) (9,273)
----------- ----------- ----------- -----------
Net income $ 8,425 $ 6,190 $ 15,598 $ 15,868
=========== =========== =========== ===========
Basic earnings per
share $ 0.44 $ 0.40 $ 0.91 $ 1.02
Basic weighted
average shares
outstanding 19,062,621 15,488,800 17,212,019 15,488,800
Diluted earnings per
share $ 0.44 $ 0.38 $ 0.89 $ 0.99
Dilutive weighted
average shares
outstanding 19,273,315 16,121,301 17,454,458 16,036,422
GORDMANS STORES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in 000's except share data)
The following information provides reconciliations of non-GAAP financial
measures presented in the accompanying earnings release to the most
comparable financial measures calculated and presented in accordance with
accounting principles generally accepted in the United States ("GAAP"). The
Company has provided non-GAAP financial measures, which are not calculated
or presented in accordance with GAAP, as information supplemental and in
addition to the financial measures presented in the accompanying earnings
release that are calculated and presented in accordance with GAAP. Such
non-GAAP financial measures should not be considered superior to, as a
substitute for, or as an alternative to, and should be considered in
conjunction with, the GAAP financial measures presented in the earnings
release. The non-GAAP financial measures in the accompanying earnings
release may differ from similar measures used by other companies.
As used in the accompanying earnings release, the Company defines non-GAAP
as reported amounts for the periods presented excluding the effects of
one-time, pre-tax charges related to the initial public offering,
principally fees associated with the termination of our consulting
agreement with Sun Capital Partners Management V, LLC ("Sun Capital
Management"). These
non-GAAP financial measures provide the Company and investors with an
understanding of the Company's financial measures adjusted to exclude the
effect of the charges described above.
These non-GAAP financial measures assist the Company and investors in
making a ready comparison of the Company's financial measures for fiscal
year 2010 against the Company's results for fiscal year 2009.
The following table reconciles non-GAAP measures to the related GAAP
financial measure for the period presented:
Fiscal Year 2010 Ended January 29, 2011
-------------------------------------
(Unaudited)
Non-GAAP
GAAP Basis Amounts Basis As
As Reported Adjusted Adjusted
----------- ----------- -----------
Net sales $ 517,001 $ -- $ 517,001
License fees from leased departments 6,321 -- 6,321
Cost of sales (299,060) -- (299,060)
----------- ----------- -----------
Gross profit 224,262 -- 224,262
Selling, general and administrative
expenses (198,302) 11,849(1) (186,453)
----------- ----------- -----------
Income from operations 25,960 11,849 37,809
Interest expense (744) -- (744)
----------- ----------- -----------
Income before taxes 25,216 11,849 37,065
Income tax expense (9,618) (4,327) (13,945)
----------- ----------- -----------
Net income $ 15,598 $ 7,522 $ 23,120
=========== =========== ===========
Basic earnings per share $ 0.91 $ 0.43 $ 1.34
Basic weighted average shares
outstanding 17,212,019 17,212,019 17,212,019
Diluted earnings per share $ 0.89 $ 0.43 $ 1.32
Dilutive weighted average shares
outstanding 17,454,458 17,454,458 17,454,458
(1) Includes one-time pre-tax charges of $11.8 million related to the
initial public offering primarily including fees associated with
the termination of our consulting agreement with Sun Capital
Management.