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Press release from Business Wire

Christopher & Banks Corporation Reports Results for the Fourteen and Fifty-Three Week Periods Ended February 2, 2013

Wednesday, March 13, 2013

Christopher & Banks Corporation Reports Results for the Fourteen and Fifty-Three Week Periods Ended February 2, 201316:01 EDT Wednesday, March 13, 2013 MINNEAPOLIS (Business Wire) -- Christopher & Banks Corporation (NYSE: CBK), a specialty women's apparel retailer, today reported results for the fourteen week and fifty-three week periods ended February 2, 2013.*Results for the Fourteen Week Period Ended February 2, 2013 Net sales totaled $116.0 million, as compared to $105.6 million in the thirteen weeks ended January 28, 2012. Approximately $5.1 million of net sales was attributable to the fourteenth week in the fourth quarter of fiscal 2012. During the quarter, the Company operated an average of 124, or 17%, fewer stores than during the comparable period last year. Same-store sales increased 18.5% in the fourteen weeks ended February 2, 2013, as compared to the fourteen weeks ended February 4, 2012. Operating loss totaled $4.0 million for the fourteen week period ended February 2, 2013. Operating loss was $53.6 million for the thirteen weeks ended January 28, 2012, which included $21.2 million of restructuring and impairment charges. Net loss for the fourteen week period ended February 2, 2013 totaled $4.1 million, or ($0.11) per share. Net loss for the thirteen weeks ended January 28, 2012 totaled $53.2 million, or ($1.50) per share, which loss included $21.2 million of impairment and restructuring charges. __________________________ * As previously announced, the Company changed its fiscal year-end to the Saturday closest to the end of January, from the Saturday nearest to the end of February, to better align the Company's financial reporting periods with its operational cycle and with other specialty retail companies. In this release, except as otherwise noted, financial results for the fourteen and fifty-three week periods ended February 2, 2013 are compared to the thirteen week period and the fifty-two week period ended January 28, 2012, respectively. LuAnn Via, President and Chief Executive Officer, commented, “We are delighted with the continued momentum in our business in the fourth quarter due to the ongoing execution of our strategic initiatives. Our customers responded very favorably to our well-balanced merchandise offering, improved value proposition and enhanced marketing programs. I'm proud of the work our team has done; however, we are only in the fourth inning, and we intend to continue to build upon this foundation to drive sustainable long-term sales and earnings growth.” Results for the Fifty-Three Weeks Ended February 2, 2013 Net sales totaled $430.3 million and same-store sales increased 5.7%, compared to the fifty-three week period ended February 4, 2012. Operating loss totaled $16.0 million and included a benefit of $5.2 million, or $0.15 per share, related to restructuring charges. Operating loss was $82.1 million for the fifty-two week period ended January 28, 2012, which loss included $21.2 million of impairment and restructuring charges, or ($0.59) per share. Net loss for the fifty-three week period totaled $16.1 million, or ($0.45) per share, including the $0.15 per share benefit related to the restructuring charges mentioned above, and a negative effective tax rate of 0.6%, which is significantly lower than the statutory rate due to the Company's continued maintenance of a full valuation allowance against its deferred tax assets. This compares to a net loss of $81.4 million, or ($2.29) per share, for the fifty-two weeks ended January 28, 2012. Balance Sheet Highlights and Capital Expenditures Cash and cash-equivalents totaled $40.7 million as of February 2, 2013. Inventory per store, excluding in-transit and e-Commerce inventory, increased approximately 21% on a per-store basis as of February 2, 2013, as compared to January 28, 2012. For the fifty-three week period ended February 2, 2013, the Company had no outstanding borrowings under its revolving credit facility and capital expenditures totaled approximately $3.6 million. Real Estate As part of the Company's real estate restructuring efforts, all 103 stores identified for closure during the transition period ended January 28, 2012 were closed as of July 28, 2012. The Company closed 30 additional stores in the normal course of business during the fourteen weeks ended February 2, 2013. The Company also converted thirteen dual stores back into Christopher & Banks stores during the fourteen weeks ended February 2, 2013. Outlook for the 2013 First Quarter and Fiscal Year For the first quarter of fiscal 2013, the Company expects: same-store sales to increase in the low twenty percent range; approximately 800 to 900 bps of gross margin improvement, as compared to the comparable prior year period, due in approximately equal parts to improved merchandise margins and positive leverage on occupancy expense, based on store closings and rent restructurings; SG&A dollars to grow due to increased investments in marketing and store payroll, albeit at a slower pace than the anticipated net sales growth; and inventory levels to be in-line with the Company's anticipated increase in same-store sales. For the 2013 fiscal year, the Company expects: capital expenditures to be approximately $9 million; to recognize a nominal amount of tax expense, as the Company's tax provisions will continue to be affected by the valuation allowance on its deferred tax assets in fiscal 2013; and average store count to be down 11% for the first quarter and 8% for the fiscal year, as compared to the comparable prior year period. Conference Call Information The Company will discuss its fourth quarter and full year results in a conference call scheduled for today, March 13, 2013, at 4:30 p.m. Eastern time. The conference call will be simultaneously broadcast live over the Internet at http://www.christopherandbanks.com. An online archive of the broadcast will be available within one hour of the completion of the call and will be accessible at http://www.christopherandbanks.com until April 13, 2013. In addition, an audio replay of the call will be available shortly after its conclusion and will be archived until March 20, 2013. This call may be accessed by dialing (877) 870-5176 and using the passcode 9601469. About Christopher & Banks Christopher & Banks Corporation is a Minneapolis-based specialty retailer of women's clothing. As of March 13, 2013, the Company operates 605 stores in 44 states consisting of 381 Christopher & Banks stores, 158 stores in its women's plus size clothing division CJ Banks, 41 dual stores and 25 outlet stores. The Company also operates the www.ChristopherandBanks.com and www.CJBanks.com e-commerce websites. Keywords: Christopher & Banks, CJ Banks, Women's Clothing, Plus Size Clothing, Petites, Extended Sizes, Outfits. Forward-Looking StatementsCertain statements in this press release are forward-looking statements, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.The forward-looking statements may use the words “expect”, “anticipate”, “plan”, “intend”, “project”, “believe” and similar expressions and include statements that the Company expects:(i) same-store sales for the first quarter to increase in the low twenty percent range; (ii) approximately 800 to 900 bps of gross margin improvement in the first quarter, as compared to the prior year period, due in approximately equal parts to improvement in merchandise margins and positive leverage on occupancy expense, based on store closings and rent restructurings; (iii) SG&A dollars to grow in the first quarter as the Company increases its investments in marketing and store payroll, albeit at a slower pace than the anticipated increase in same-store sales; (iv) inventory levels in the first quarter to be in-line with the Company's anticipated net sales growth; (v) capital expenditures to be approximately $9 million for the fiscal year; (vi) to recognize a nominal amount of tax expense in the fiscal year, as the Company's tax provisions will continue to be affected by the valuation allowance on its deferred tax assets in fiscal 2013; and (vii) average store count to be down 11% for the first quarter and 8% for the fiscal year, as compared to the comparable prior year period.These statements are based on management's current expectations and are subject to a number of uncertainties and risks, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our actual results to differ materially from those expressed or implied by the forward-looking statements.Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, but are not limited to: (i) the inherent difficulty in forecasting consumer buying and retail traffic patterns which may be affected by factors beyond our control, such as a weakness in overall consumer demand; adverse weather, economic or political conditions; and shifts in consumer tastes or spending habits that result in reduced sales or gross margins; (ii) lack of acceptance of the Company's fashions, including its seasonal fashions; (iii) the ability of the Company's infrastructure and systems to adequately support our operations; (iv) the effectiveness of the Company's brand awareness, marketing programs and efforts to enhance the in-store experience; (v) the possibility that, because of poor customer response to our merchandise, management may determine it is necessary to sell merchandise at lower than expected margins or at a loss; (vi) the failure to successfully implement the Company's strategic and tactical plans; (vii) general economic conditions could lead to a reduction in store traffic and in consumer spending on women's apparel; (viii) fluctuations in the levels of the Company's sales, expenses or earnings; and (ix) risks associated with the performance and operations of the Company's Internet operations.Readers are cautioned not to place undue reliance on these forward-looking statements which are based on current expectations and speak only as of the date of this release.The Company does not assume any obligation to update or revise any forward-looking statement at any time for any reason.Certain other factors that may cause actual results to differ from such forward-looking statements are included in the Company's periodic reports filed with the Securities and Exchange Commission and available on the Company's website under “Investor Relations” and you are urged to carefully consider all such factors.                     CHRISTOPHER & BANKS CORPORATIONUNAUDITED COMPARATIVE STATEMENTS OF OPERATIONS (1)(in thousands, except per share data)       FourteenThirteenNineFifty-ThreeFifty-TwoForty-EightWeeks EndedWeeks EndedWeeks EndedWeeks EndedWeeks EndedWeeks EndedFebruary 2,January 28,January 28,February 2,January 28,January 28,   2013     2012     2012     2013     2012     2012     Net sales $ 115,981 $ 105,647 $ 68,838 $ 430,302 $ 436,182 $ 412,796   Costs and expenses: Merchandise, buying and occupancy 81,009 98,169 65,640 303,680 333,288 311,925 Selling, general and administrative 34,777 35,335 23,772 129,153 141,825 131,259 Depreciation and amortization 4,211 4,521 3,043 18,595 21,991 20,202 Impairment and restructuring   -     21,183     8,978     (5,161 )   21,183     21,183   Total costs and expenses   119,997     159,208     101,433     446,267     518,287     484,569     Operating loss (4,016 ) (53,561 ) (32,595 ) (15,965 ) (82,105 ) (71,773 )   Other expense (income)   110     (86 )   (66 )   14     (360 )   (324 )   Loss before income taxes (4,126 ) (53,475 ) (32,529 ) (15,979 ) (81,745 ) (71,449 )   Income tax (benefit) provision   (76 )   (251 )   (798 )   97     (390 )   (387 )   Net loss $ (4,050 ) $ (53,224 ) $ (31,731 ) $ (16,076 ) $ (81,355 ) $ (71,062 )     Basic loss per share:   Net loss $ (0.11 ) $ (1.50 ) $ (0.89 ) $ (0.45 ) $ (2.29 ) $ (2.00 )   Basic shares outstanding   35,883     35,581     35,582     35,694     35,547     35,554       Diluted loss per share:   Net loss $ (0.11 ) $ (1.50 ) $ (0.89 ) $ (0.45 ) $ (2.29 ) $ (2.00 )   Diluted shares outstanding   35,883     35,581     35,582     35,694     35,547     35,554       Dividends per share $ -   $ -   $ -   $ -   $ 0.18   $ 0.18       (1) In January 2012, the Company changed its fiscal year end to the Saturday closest to the end of January from the Saturday closest to the end of February. The Company has provided financial results for the thirteen and fifty-two weeks ended January 28, 2012 on a comparable basis to the fourteen and fifty-three weeks ended February 2, 2013. The Company's prior year fourth quarter and full fiscal year included the nine and forty- eight weeks ended January 28, 2012.           CHRISTOPHER & BANKS CORPORATIONUNAUDITED COMPARATIVE BALANCE SHEETS(in thousands)     February 2,January 28,   2013     2012   ASSETS Current assets: Cash and cash equivalents $ 40,739 $ 40,782 Short-term investments - 7,660 Merchandise inventories 42,704 39,455 Other current assets   10,858     8,126   Total current assets   94,301     96,023     Property, equipment and improvements, net   41,230     56,443     Other assets: Long-term investments - 13,284 Other   401     266   Total other assets   401     13,550     Total assets $ 135,932   $ 166,016       LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable(1) $ 22,586 $ 19,466 Accrued salaries, wages and related expenses 4,217 5,831 Accrued liabilities(1)   23,410     25,566   Total current liabilities   50,213     50,863     Non-current liabilities: Deferred lease incentives 5,665 10,546 Deferred rent obligations 2,959 5,294 Lease termination liabilities - 8,032 Other accrued liabilities   1,629     1,919   Total non-current liabilities   10,253     25,791     Stockholders' equity: Common stock 467 458 Additional paid-in capital 119,632 117,399 Retained earnings 68,078 84,154 Common stock held in treasury (112,711 ) (112,711 ) Accumulated other comprehensive income   -     62   Total stockholders' equity   75,466     89,362     Total liabilities and stockholders' equity $ 135,932   $ 166,016     (1)   Certain prior year amounts have been reclassified to conform to the current year presentation.         CHRISTOPHER & BANKS CORPORATIONUNAUDITED COMPARATIVE STATEMENTS OF CASH FLOWS(in thousands)   Fifty-ThreeForty-EightWeeks EndedWeeks EndedFebruary 2,January 28,   2013     2012     Cash flows from operating activities: Net loss $ (16,076 ) $ (71,062 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 18,595 20,202 Impairment of store assets 424 11,445 Amortization of premium on investments (444 ) 74 Amortization of financing costs 35 - Deferred lease related liabilities(1) (7,216 ) (6,599 ) Stock-based compensation expense 2,308 2,770 Loss on disposal of furniture, fixtures and equipment 52 106 Gain on investments, net (76 ) (122 ) Changes in operating assets and liabilities: Decrease in accounts receivable 19 318 Increase in merchandise inventories (3,249 ) (244 ) Increase in prepaid expenses and other current assets (3,535 ) (1,300 ) Decrease in income taxes receivable 783 5,113 Decrease in other assets 180 48 Increase in accounts payable(1) 2,952 2,497 (Decrease) increase in accrued liabilities(1) (3,871 ) 3,455 (Decrease) increase in lease termination liabilities (8,032 ) 8,032 Decrease in other liabilities   (290 )   (613 ) Net cash used in operating activities   (17,441 )   (25,880 )   Cash flows from investing activities: Purchases of property, equipment and improvements (3,623 ) (11,742 ) Proceeds from sale of furniture, fixtures and equipment 35 143 Purchases of available-for-sale investments - (35,713 ) Sales of available-for-sale investments   21,403     76,827   Net cash provided by investing activities   17,815     29,515     Cash flows from financing activities: Financing costs (350 ) - Shares redeemed for payroll taxes (67 ) (139 ) Dividends paid   -     (6,426 ) Net cash used in financing activities   (417 )   (6,565 )   Net decrease in cash and cash equivalents (43 ) (2,930 )   Cash and cash equivalents at beginning of period   40,782     43,712     Cash and cash equivalents at end of period $ 40,739   $ 40,782     (1)   Certain prior year amounts have been reclassified to conform to the current year presentation. Christopher & Banks CorporationPeter Michielutti, 763-551-5000Senior Vice President,Chief Financial OfficerorInvestor Relations:ICR, Inc.Jean Fontana, 203-682-8200