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Vera Bradley Announces Fiscal 2013 Second Quarter Financial Results Wednesday, August 29, 2012, 4:02:06 PM ET
-- Net revenues increased 18.5% to $123.0 million.
-- Direct net revenues increased 37.2%, including an increase of 5.3% in
comparable-store sales; Indirect net revenues increased 2.6%.
-- Net income decreased $0.2 million to $13.4 million versus $13.6 million
in the second quarter of fiscal 2012, a decrease of 1.9%.
-- Diluted EPS were $0.33 compared to $0.34 in the second quarter of fiscal
2012.
FORT WAYNE, Ind., Aug. 29, 2012 (GLOBE NEWSWIRE) -- Vera Bradley, Inc. (VRA) today announced its financial results for the fiscal 2013 second quarter ended July 28, 2012. The Company reported net revenues of $123.0 million for the second quarter, compared to $103.8 million in the second quarter of fiscal 2012, an increase of $19.2 million, or 18.5%. Diluted earnings per share for the quarter were $0.33, a decrease of 3% from earnings per share in the second quarter of fiscal 2012. "Although there were many accomplishments during the quarter, results fell short of our expectations," said Michael C. Ray, Vera Bradley’s Chief Executive Officer. "The second quarter was challenging in May and June as we managed a product portfolio that underperformed in the midst of an uncertain consumer environment. Sales trends improved in July, which benefited from the strong reception of our fall collections. We are also encouraged by our future product introductions; however, we remain cautious regarding the second half of the year. Overall, we continue to make progress executing our growth strategies and we remain optimistic about our long-term prospects." By segment, Direct revenues increased 37.2% to $65.7 million, driven by the opening of 21 new stores since the second quarter of fiscal 2012, a comparable-store sales increase of 5.3%, and e-commerce revenue growth of 21.2%. Indirect revenues increased 2.6% to $57.3 million, in-line with our expectations. Gross profit for the second quarter increased 15.1% to $68.6 million, resulting in gross margin of 55.8%, compared to gross margin of 57.5% in the prior year. The second quarter decline in gross margin was due to increased promotional activity, partially offset by positive channel mix, as the Direct segment becomes a larger percentage of our business, as well as operational savings. Total SG&A expense was $47.8 million for the second quarter, compared to $39.1 million in the prior year. SG&A as a percentage of net revenues was unfavorable by 120 basis points compared to the prior year, due primarily to annualizing fiscal 2012 infrastructure investments made in the second half of last year and higher occupancy costs driven by opening full-price stores earlier than originally anticipated. Operating income decreased 4.9% to $21.8 million, or 17.7% of net revenues, in the second quarter, compared to operating income of $22.9 million, or 22.1% of net revenues in the second quarter of fiscal 2012. Net income for the quarter decreased $0.2 million to $13.4 million, or $0.33 per diluted share, compared to $13.6 million, or $0.34 per diluted share, in the second quarter of fiscal 2012. Year-to-Date Results For the twenty-six weeks ended July 28, 2012, net revenues increased 17.1% to $240.2 million, from $205.2 million in the same period in the prior year. By segment, Direct revenues increased 35.8% to $124.9 million, with comparable-store sales increasing 4.9%. Indirect revenues increased 1.9% to $115.3 million. Operating income increased 1.5% to $42.6 million, or 17.7% of net revenues, for the twenty-six weeks, compared to operating income of $42.0 million, or 20.5% of net revenues. Net income for the twenty-six weeks increased 4.6% to $26.0 million, or $0.64 per diluted share, compared to $24.9 million, or $0.61 per diluted share a year ago. Cash flow from operations for the twenty-six weeks ended July 28, 2012 totaled $25.5 million, compared to a use of cash of $11.8 million for the same period in the prior year, primarily due to improved inventory management. Outlook For the third quarter of fiscal 2013, the Company expects net revenues to be in a range of $134 million to $136 million, compared to $121.1 million in the third quarter of fiscal 2012. Gross margin for the third quarter is expected to expand over the prior year by approximately 200 basis points of which approximately 120 basis points is attributable to a $3.5 million sale to the off price channel in the prior year. Diluted earnings per share are expected to be in a range of $0.37 to $0.39. The earnings per share estimate assumes an effective tax rate of 39% and fully diluted weighted average shares outstanding of 40.5 million. For fiscal 2013, the Company expects net revenues to be in a range of $531 million to $536 million. Gross margin for fiscal 2013 is expected to expand over the prior year by approximately 30 basis points. Diluted earnings per share for the full year are expected to be in a range of $1.60 to $1.63. This guidance includes an effective tax rate of 39% and fully diluted weighted average shares outstanding of 40.6 million. Call Information A conference call to discuss fiscal 2013 second quarter results is scheduled for today, August 29, 2012, at 4:30 p.m. Eastern Time. A broadcast of the call will be available via Vera Bradley’s Investor Relations section of its website, www.verabradley.com. In addition, a replay of the call will be available shortly after the conclusion of the call and remain available through September 12, 2012. To access the recording, listeners should dial (877) 870-5176, and enter the access code, 2089468. About Vera Bradley, Inc. Vera Bradley infuses color into all aspects of women’s lives with vibrant handbags, accessories, luggage, eyewear, travel items and gifts. Founded in 1982 by Barbara Bradley Baekgaard and Patricia R. Miller, the brand inspires women to "be colorful" with designs that reflect their personal style. As of July 28, 2012, Vera Bradley accessories can be found in 60 retail stores in the U.S., 10 outlet stores, approximately 3,300 specialty retailers and online at verabradley.com. Vera Bradley employs approximately 2,000 and the company’s fiscal 2012 sales were $461 million. The company’s commitment to breast cancer research continues to expand through the Vera Bradley Foundation for Breast Cancer. For more information about Vera Bradley (VRA), visit www.verabradley.com/mediaroom. Website Information We routinely post important information for investors on our website www.verabradley.com in the "Investor Relations" section. We intend to use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document. Vera Bradley Safe Harbor Statement 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. Such forward-looking statements reflect the Company’s current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected, including: possible adverse changes in general economic conditions and their impact on consumer confidence and spending; possible inability to predict and respond in a timely manner to changes in consumer demand; possible loss of key management or design associates or inability to attract and retain the talent required for our business; possible inability to maintain and enhance our brand; possible inability to successfully implement our growth strategies or manage our growing business; possible inability to successfully open new stores as planned; and possible inability to sustain levels of comparable-store sales. For a discussion of these and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 28, 2012. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.
Vera Bradley, Inc.
Condensed Consolidated Balance Sheets
($ in thousands)
(unaudited)
--------------------------------------------------------------
January
July 28, 28, July 30,
2012 2012 2011
---------- ---------- ----------
Assets
Current assets:
Cash and cash
equivalents $ 7,612 $ 4,922 $ 788
Accounts receivable, net 49,279 38,097 44,719
Inventories 117,895 106,967 118,105
Prepaid expenses and
other current assets 8,177 8,343 7,246
Deferred income taxes 8,396 8,010 9,739
---------- ---------- ----------
Total current assets 191,359 166,339 180,597
Property, plant, and
equipment, net 70,220 52,312 45,049
Other assets 1,669 862 1,084
---------- ---------- ----------
Total assets $ 263,248 $ 219,513 $ 226,730
========== ========== ==========
Liabilities and
Shareholders’ Equity
Current liabilities:
Accounts payable $ 45,016 $ 27,276 $ 30,924
Accrued employment costs 11,209 15,738 11,960
Other accrued
liabilities 17,693 15,297 12,934
Income taxes payable -- 1,705 405
Current portion of
long-term debt 90 89 86
---------- ---------- ----------
Total current
liabilities 74,008 60,105 56,309
Long-term debt 25,301 25,095 71,590
Deferred income taxes 4,314 4,205 3,971
Other long-term
liabilities 8,474 6,101 4,869
---------- ---------- ----------
Total liabilities 112,097 95,506 136,739
---------- ---------- ----------
Shareholders’ equity:
Additional paid-in
capital 74,752 73,590 72,661
Retained earnings 76,319 50,320 17,256
Accumulated other
comprehensive income 80 97 74
---------- ---------- ----------
Total shareholders’
equity 151,151 124,007 89,991
---------- ---------- ----------
Total liabilities and
shareholders’ equity $ 263,248 $ 219,513 $ 226,730
========== ========== ==========
Vera Bradley, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
--------------------------------------------------------------------------
Thirteen Weeks Ended Twenty-Six Weeks Ended
---------------------- ----------------------
July 28, July 30, July 28, July 30,
2012 2011 2012 2011
---------- ---------- ---------- ----------
Net revenues $ 123,037 $ 103,789 $ 240,238 $ 205,179
Cost of sales 54,425 44,161 106,324 89,107
---------- ---------- ---------- ----------
Gross profit 68,612 59,628 133,914 116,072
Selling, general, and
administrative expenses 47,833 39,120 95,024 79,109
Other income 1,020 2,418 3,719 5,023
---------- ---------- ---------- ----------
Operating income 21,799 22,926 42,609 41,986
Interest expense, net 152 329 343 645
---------- ---------- ---------- ----------
Income before income
taxes 21,647 22,597 42,266 41,341
Income tax expense 8,274 8,964 16,267 16,484
---------- ---------- ---------- ----------
Net income $ 13,373 $ 13,633 $ 25,999 $ 24,857
========== ========== ========== ==========
Basic weighted-average
shares outstanding 40,532 40,507 40,524 40,507
Diluted weighted-average
shares outstanding 40,568 40,541 40,557 40,537
Basic earnings per share $ 0.33 $ 0.34 $ 0.64 $ 0.61
Diluted earnings per share 0.33 0.34 0.64 0.61
Vera Bradley, Inc.
Consolidated Statements of Cash Flows
($ in thousands)
(unaudited)
----------------------------------------------------------------
Twenty-Six Weeks
Ended
---------------------
July 28, July 30,
2012 2011
---------- ---------
Cash flows from operating activities
Net income $ 25,999 $ 24,857
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation of property, plant, and
equipment 4,759 4,461
Provision for doubtful accounts 347 75
Loss on disposal of property, plant,
and equipment 25 --
Stock-based compensation 1,431 662
Deferred income taxes (277) (325)
Changes in assets and liabilities:
Accounts receivable (11,529) (10,495)
Inventories (10,928) (21,388)
Other assets (641) 1,012
Accounts payable 17,740 583
Income taxes payable (1,705) (9,605)
Accrued and other liabilities 240 (1,615)
---------- ---------
Net cash provided by (used in) operating
activities 25,461 (11,778)
---------- ---------
Cash flows from investing activities
Purchases of property, plant, and
equipment (22,704) (6,526)
---------- ---------
Net cash used in investing activities (22,704) (6,526)
---------- ---------
Cash flows from financing activities
Payments on financial-institution debt (62,750) (12,000)
Borrowings on financial-institution
debt 63,000 16,700
Payments on vendor-financed debt (43) (40)
Change in bank overdraft -- 329
Tax withholdings for equity
compensation (269) --
Other -- 76
---------- ---------
Net cash provided by (used in) financing
activities (62) 5,065
---------- ---------
Effect of exchange rate changes on cash
and cash equivalents (5) 74
---------- ---------
Net increase (decrease) in cash and cash
equivalents 2,690 (13,165)
Cash and cash equivalents, beginning of
period 4,922 13,953
---------- ---------
Cash and cash equivalents, end of period $ 7,612 $ 788
========== =========
This news release was distributed by GlobeNewswire, www.globenewswire.com SOURCE: Vera Bradley, Inc. CONTACT: Investors: Vera Bradley Paul G. Blair pblair@verabradley.com (260) 207-5183 ICR, Inc. Joseph Teklits Jean Fontana Jean.fontana@icrinc.com (203) 682-8200 Media: 877-708-VERA (8372) Mediacontact@verabradley.com |
  
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