Claire's Stores, Inc. Announces Selected Preliminary, Unaudited Fiscal 2012 Third Quarter Results

 Claire's Stores, Inc. Announces Selected Preliminary, Unaudited Fiscal 2012
                            Third Quarter Results

PR Newswire

CHICAGO, Nov. 12, 2012

CHICAGO, Nov. 12, 2012 /PRNewswire/ -- Claire's Stores, Inc., one of the
world's leading specialty retailers of fashionable jewelry and accessories at
affordable prices for young women, teens, tweens and kids, today announced
selected preliminary, unaudited financial results for the fiscal 2012 third
quarter, which ended October 27, 2012.

The financial results discussed in this press release regarding selected
fiscal 2012 third quarter results are unaudited and should be considered
preliminary and subject to change. The Company does not currently expect to
update this information prior to the release of its fiscal 2012 third quarter
financial results. The Company expects to hold its regular quarterly
conference call after those results are released.

Third quarter Results
The Company expects to report net sales of $363 million for the 2012 third
quarter, an increase of $7 million, or 2.1%, compared to the 2011 third
quarter. The increase was attributable to new store sales and same store
sales, partially offset by the effect of store closures and foreign currency
translation effect of our foreign locations' sales. Net sales would have
increased 4.4% excluding the impact from foreign currency rate changes.

Consolidated same store sales increased 2.4% in the 2012 third quarter, with
North America same store sales increasing 2.0%, and Europe same store sales
increasing 3.2%. Our consolidated month-to-date same store sales in November
are in the positive high-single digits. However, that performance includes a
benefit from Halloween falling on the fourth day of fiscal November 2012
compared to the second day of the same period last year and a shift in the
mid-term school holiday in Europe from October last year into fiscal November
this year. We compute same store sales on a local currency basis, which
eliminates any impact from changes in foreign exchange rates.

Adjusted EBITDA in the 2012 third quarter is expected to be between $65
million and $67 million, compared to $62.6 million in the 2011 third quarter.
The Company defines Adjusted EBITDA as earnings before provision for income
taxes, gain (loss) on early debt extinguishment, net interest expense,
depreciation and amortization. Adjusted EBITDA, excludes severance,
management fees, the impact of transaction-related costs and other
non-recurring or non-cash expenses, and normalizing occupancy costs for
certain rent-related adjustments. We expect to report operating income for
the fiscal 2012 third quarter in the range of $49 million to $51 million,
compared to $44.6 million in the fiscal 2011 third quarter. A reconciliation
of operating income to Adjusted EBITDA is attached.

At October 27, 2012, cash and cash equivalents were $63 million, and the
Company's recently amended $115 million Revolving Credit Facility was
undrawn. In the 2012 third quarter, we paid in full $664.6 million of
indebtedness under the Company's senior secured term loan with the net
proceeds of additional Senior Secured First Lien Notes together with cash on
hand. In addition, the Company replaced its existing senior secured revolving
credit facility with the amended and restated $115 million five-year senior
secured revolving credit facility. 

Adjusted EBITDA
EBITDA and Adjusted EBITDA are not measures of financial performance under
U.S. GAAP, are not intended to represent cash flow from operations under U.S.
GAAP and should not be used as an alternative to net income (loss)as an
indicator of operating performance or to cash flow from operating, investing
or financing activities as a measure of liquidity. Management compensates for
the limitations of using EBITDA and Adjusted EBITDA by using it only to
supplement our U.S. GAAP results to provide a more complete understanding of
the factors and trends affecting our business. Each of EBITDA and Adjusted
EBITDA has its limitations as an analytical tool, and you should not consider
them in isolation or as a substitute for analysis of our results as reported
under U.S. GAAP.

Management uses Adjusted EBITDA as an important tool to assess our operating
performance. Management considers Adjusted EBITDA to be a useful measure in
highlighting trends in our business and in analyzing the profitability of
similar enterprises. Management believes that Adjusted EBITDA is effective,
when used in conjunction with net income (loss), in evaluating asset
performance, and differentiating efficient operators in the industry.
Furthermore, management believes that Adjusted EBITDA provides useful
information to potential investors and analysts because it provides insight
into management's evaluation of our results of operations. Our calculation of
Adjusted EBITDA may not be consistent with "EBITDA" for the purpose of the
covenants in the agreements governing our indebtedness.

While EBITDA and Adjusted EBITDA are frequently used as a measure of
operations and the ability to meet indebtedness service requirements, they are
not necessarily comparable to other similarly titled captions of other
companies due to potential inconsistencies in the method of calculation.
Management believes that these measures provide useful information to

Company Overview
Claire's Stores, Inc. is one of the world's leading specialty retailers of
fashionable jewelry and accessories at affordable prices for young women,
teens, tweens and girls ages 3 to 27. The Company operates through its two
store concepts: Claire's^® and Icing^®. As of October 27, 2012, Claire's
Stores, Inc. operated 3,088 stores in North America and Europe. The Company
also franchised or licensed 381 stores in Japan, the Middle East, Turkey,
Greece, Guatemala, Malta, Ukraine, Mexico, India, Dominican Republic, El
Salvador, Venezuela, and Panama. More information regarding Claire's Stores is
available on the Company's corporate website at

Preliminary Nature of Results
We have not yet finalized our financial results for our fiscal 2012 third
quarter ended October 27, 2012. The preliminary estimated financial results
described herein are unaudited and subject to revision pending the completion
of the accounting and financial reporting processes necessary to complete our
financial closing procedures and financial statements for our fiscal 2012
third quarter ended October 27, 2012. The foregoing preliminary estimates of
our financial results were prepared by management. Management believes that
such preliminary estimates have been prepared on a reasonable basis, and such
preliminary estimates are based upon a number of assumptions, estimates and
business decisions that are inherently subject to significant business
fluctuations, economic conditions and competitive uncertainties and
contingencies, many of which are beyond our control, and represent, to the
best of management's knowledge, our expected results. However, because this
information is preliminary and highly subjective, it should not be relied on
as indicative of our future actual results. We do not intend to update or
otherwise revise the preliminary estimates to reflect future events.

Forward-looking Statements:
This press release contains "forward-looking statements" which represent the
Company's expectations or beliefs with respect to future events. Statements
that are not historical are considered forward-looking statements. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those anticipated. Those
factors include, without limitation: changes in consumer preferences and
consumer spending; competition; our level of indebtedness; general economic
conditions; general political and social conditions such as war, political
unrest and terrorism; natural disasters or severe weather events; currency
fluctuations and exchange rate adjustments; uncertainties generally associated
with the specialty retailing business, such as decreases in mall traffic due
to high gasoline prices or other general economic conditions; disruptions in
our supply of inventory; inability to increase same store sales; inability to
renew, replace or enter into new store leases on favorable terms; increase in
our cost of merchandise; significant increases in our merchandise markdowns;
inability to grow our store base in Europe or expand our international
franchising operations; inability to design and implement new information
systems or disruptions in adapting our information systems to allow for
e-commerce sales; delays in anticipated store openings or renovations;
uncertainty that definitive financial results may differ from preliminary
financial results due to, among other things, final U.S. GAAP adjustments;
results from any future asset impairment analysis; changes in applicable laws,
rules and regulations, including changes in federal, state or local
regulations governing the sale of our merchandise, particularly regulations
relating to the content in our merchandise, general employment laws, including
laws relating to overtime pay and employee benefits, health care laws, tax
laws and import laws; product recalls; loss of key members of management;
increases in the cost of labor; labor disputes; unwillingness of vendors and
service providers to supply goods or services pursuant to historical customary
credit arrangements; increases in the cost of borrowings; unavailability of
additional debt or equity capital; and the impact of our substantial
indebtedness on our operating income and our ability to grow. These and other
applicable risks, cautionary statements and factors that could cause actual
results to differ from the Company's forward-looking statements are included
in the Company's filings with the SEC, specifically as described in the
Company's Annual Report on Form 10-K for the fiscal year ended January 28,
2012 filed with the SEC on April 4, 2012. The Company undertakes no
obligation to update or revise any forward-looking statements to reflect
subsequent events or circumstances. The historical results contained in this
press release are not necessarily indicative of the future performance of the

Additional Information:
Note: Other Claire's Stores, Inc. press releases, a corporate profile and the
most recent Form 10-K and Form 10-Q reports are available on Claire's business
website at:

Contact Information:
J. Per Brodin, Executive Vice President and Chief Financial Officer
Phone: (847) 765-1100 or E-mail,

(In Millions)
                         Three Months  Three Months  Nine Months   Nine Months
                         Ended         Ended         Ended         Ended

                         October 27,   October 29,   October 27,   October 29,
                         2012          2011          2012          2011
Operating income (a)     $ 49 – 51  $   44.6    $ 125 –    $   107.7
Depreciation and         16            17.1          48            50.5
Reported EBITDA           65 – 67  61.7           173 –    158.2
– stock compensation,
book to cash rent,       -             1.6           -             5.1
 amortization (b)
– management fee,        1             0.8           3             2.3
consulting (c)
– other (d)              (1)           (1.5)         2             6.4
Adjusted EBITDA          $ 65 – 67  $   62.6    $ 178 –    $   172.0

a)Fiscal 2011 includes a $(0.7) million gain and $1.5 million charge for the
three and nine months ended October 29,
 2011, respectively, to remeasure the Euro Loan at the period end foreign
exchange rate.
b)Includes: non-cash stock compensation expense, net non-cash rent expense,
amortization of rent free periods, the
 inclusion of cash landlord allowances, and the net accretion of favorable
(unfavorable) lease obligations and non-cash
 amortization of lease rights.
c)Includes: the management fee paid to Apollo Management and Morgan Joseph
Tri-Artisan Capital Partners and non-
 recurring consulting expenses.
d)Includes: non-cash losses on property and equipment associated with
remodels, relocations and closures; costs,
 including third party charges and compensation, incurred in conjunction
with the relocation of new employees; non-
 cash foreign exchange gains/losses resulting from intercompany
transactions and remeasurements of U.S. dollar
 denominated cash accounts and foreign currency denominated debt of our
foreign entities into their functional
 currency; and severance and transaction related costs. A majority of the
fiscal 2011 adjustments is foreign exchange

SOURCE Claire's Stores, Inc.

Press spacebar to pause and continue. Press esc to stop.