rue21, inc. Announces Fourth Quarter and Fiscal Year 2012 Financial Results Net Sales growth of 22.4% for Q4 2012 Adjusted EPS $0.65, a 25% increase from Q4 2011 Board of Directors Authorizes an Additional $25 Million for Share Repurchase Program WARRENDALE, Pa., March 21, 2013 (GLOBE NEWSWIRE) -- rue21, inc. (Nasdaq:RUE) today announced its financial results for the fourth quarter and full fiscal year ended February 2, 2013. Fourth Quarter Fiscal 2012 Summary: For the fourth quarter of fiscal 2012, net sales increased 22.4% to $269.1 million from $219.9 million a year ago, including a comparable store sales increase for the quarter of 0.7% following a 2.2% decrease in the fourth quarter of fiscal 2011. The Company opened 17 new stores and closed 2 stores in the fourth quarter of fiscal 2012. Gross margin increased 110 bps to 37.6% for the quarter, driven by improved merchandise margin of 70 basis points and leverage of expenses. Net income and diluted earnings per share (EPS) for the fourth quarter were impacted by non-recurring professional fees of $1.2 million. On a GAAP basis, net income increased 16.4% and EPS were $0.62 versus $0.52 in the fourth quarter of 2011. Adjusting out non-recurring professional fees in this year's fourth quarter, net income increased by 22.4% and adjusted EPS were $0.65 versus $0.52 in the fourth quarter of fiscal 2011. A reconciliation of GAAP to non-GAAP financial measures is included in the schedules accompanying the consolidated financial statements included with this release. Bob Fisch, rue21's President and CEO, stated: "Fiscal 2012 was another year of consistent top and bottom line growth for rue21, including record gross margin and double-digit growth in net income. We continue to focus on the qualities that make rue21 appealing to our customers and our financial returns attractive for our shareholders: offering current fashion at every day great value, executing on our strategic square footage growth, and methodically delivering productivity and profitability gains every quarter." Fiscal Year 2012 Summary: For fiscal 2012, net sales increased 18.6% to $901.9 million, and comparable-store sales increased 0.7%. Gross margin increased 60 bps to 38.3% from 37.7%, driven primarily by merchandise margin improvement. The Company opened 125 new stores, closed 3 stores, and ended the year with 877 stores. Ona GAAP basis, net income increased 12.7% and EPS were $1.76 versus $1.55 in fiscal year 2011.Net income and EPS for fiscal 2012 were impacted by non-recurring professional fees and non-recurring litigation expense associated with the settlement and related costs of wage and hour claims in California.Adjusted net income increased 19.4% for the year, to $46.5 million from $39.0 million.Adjusted EPS were $1.87 in fiscal 2012 as compared to $1.55 in fiscal 2011. For the year, cash and short term investments decreased 11.7% to $63.5 million.During fiscal 2012, the Company repurchased 925,668 shares of its stock for $25 million. The Company did not borrow during the year and had no long term debt as of February 2, 2013.Total Company inventory per square foot was up 2.3% from the prior year end. Impact of 53^rd Week: Fiscal 2012 included an extra week in the fourth quarter of the year (the 53^rd week).The 53^rd week is not included in the calculation of comparable store sales, but is included in net sales and net income for fiscal 2012.The 53^rd week was not material to fourth quarter or fiscal 2012 net income. Stock Repurchase Program: During the fourth quarter of fiscal 2012, the Company repurchased 97,568 shares for $2.8 million.For the full fiscal year, the Company repurchased 925,668 shares for $25 million. At the end of the fourth quarter, $25 million of the $50 million stock repurchase program remained available for future repurchases. The board of directors also authorized an additional $25 million for the stock repurchase program. Under the stock repurchase program, the Company may repurchase shares in the open market at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors including price, corporate and regulatory requirements, and other market and business conditions. The Company may suspend or discontinue the program at any time, and may thereafter reinstitute purchases, all without prior announcement. Outlook: For fiscal 2013 (52 week year), the Company currently expects diluted earnings per share to be in the range of $2.10 to $2.15 not including the impact of the Company's investments in the construction of its e-commerce platform.We anticipate e-commerce investments to have approximately a $0.10 impact on earnings per diluted share in 2013. Revenue impact from e-commerce in fiscal 2013, if any, will be immaterial. The Company expects comparable store sales growth in 2013 to be in the low single digits. The Company guidance incorporates 24.2 million average diluted shares expected for fiscal 2013. Diluted earnings per share for the first quarter are expected to be in the range of $0.47 to $0.50, not including the impact of the Company's investment in its e-commerce platform.For the first quarter the e-commerce impact is anticipated to be $0.02.The Company currently expects comparable store sales growth in the first quarter of fiscal 2013 to be slightly negative to slightly positive. Conference Call Information: A conference call to discuss fourth quarter and fiscal 2012 financial results is scheduled for today, March 21, 2013 at 4:30 PM Eastern Time. To participate, dial toll-free (888) 298-3466 or 1-719-325-2324 (international). The conference call will also be webcast live at www.rue21.com under the Investor Relations section. A replay of this call will be available on the Investor Relations section of the Company's website, www.rue21.com, within two hours of the conclusion of the call and will remain on the website for ninety days. About rue21, inc. rue21 is a leading specialty apparel retailer offering exclusive branded merchandise and the newest trends at a great value.rue21 currently operates 900 stores in 47 states.Learn more at www.rue21.com Forward Looking Statements: Certain statements herein, including statements relating to future store openings and growth strategies, 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 actual results of operations may differ materially from historical results or current expectations. Any such forward-looking statements are subject to various risks and uncertainties, including the strength of the economy, consumer spending, our ability to effectively identify and respond to changing fashion trends, our ability to compete with other retailers, our strategy and expansion plans, implementation of systems upgrades, reliance on key personnel, trade restrictions, events that may affect our vendors or their ability to finance their operations, availability of suitable new store locationsand other factors which are set forth in the Company's Annual Report on Form 10-K filed March 27, 2012,and in all filings with the SEC made by the Company subsequent to the filing of the Form 10-K. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP Financial Measures: Management has presented its operating results in accordance with GAAP and on an "adjusted" (or non-GAAP) basis for the fourteen week and fifty-three week periods ended February 2, 2013. The Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses these non-GAAP financial measures in connection with assessing its financial performance. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP. rue21, inc. Consolidated Statements of Income Three Months Ended Twelve Months Ended February 2, January 28, February 2, January 28, 2013 2012 2013 2012 (Unaudited) (Unaudited) (in thousands, except per share data) Net sales $269,054 $219,896 $901,886 $760,302 Cost of goods sold (includes certain buying, occupancy and 167,854 139,531 556,368 473,662 distribution center expenses) Gross profit 101,200 80,365 345,518 286,640 Selling, general, and 68,763 52,130 244,096 197,176 administrative expense Depreciation and 8,894 7,262 32,961 26,618 amortization expense Income from operations 23,543 20,973 68,461 62,846 Interest expense 37 16 (27) (9) (income), net Income before income 23,506 20,957 68,488 62,855 taxes Provision for income 8,462 8,036 24,587 23,905 taxes Net income $15,044 $12,921 $43,901 $38,950 Basic income per common $0.63 $0.53 $1.81 $1.60 share Diluted income per $0.62 $0.52 $1.76 $1.55 common share Weighted average basic common shares 23,783 24,467 24,287 24,417 outstanding Weighted average diluted common shares 24,393 25,054 24,903 25,051 outstanding NOTE: The three and twelve months ended February 2, 2013 consisted of 14 weeks and 53 weeks, respectively, compared with 13 weeks and 52 weeks in the comparable prior-year periods. rue21, inc. Consolidated Balance Sheets February 2, January 28, 2013 2012 (Unaudited) (in thousands,exceptper share data) Assets Current assets: Cash and cash equivalents $43,519 $41,960 Short term investments 20,000 30,000 Accounts receivable 10,555 6,675 Merchandise inventory, net 157,269 131,136 Prepaid expenses and other current 13,905 11,767 assets Deferred tax assets 5,910 5,121 Total current assets 251,158 226,659 Property and equipment, net 144,852 117,798 Other assets 3,499 3,565 Total assets $399,509 $348,022 Liabilities and stockholders' equity Current liabilities: Accounts payable $108,760 $103,914 Accrued expenses and other current 24,202 16,570 liabilities Accrued payroll and related taxes 8,932 12,045 Deferred rent and tenant allowances, 10,228 8,652 current portion Accrued income and franchise taxes 126 1,068 Total current liabilities 152,248 142,249 Long-term liabilities: Deferred rent, tenant allowances and 59,325 46,965 other long-term liabilities Deferred tax liabilities 9,625 11,585 Total long-term liabilities 68,950 58,550 Commitments and Contingencies – – Stockholders' equity: Preferred stock--- par value $0.001 per share, 10,000,000 shares authorized; – – none issued or outstanding Common stock--- par value $0.001 per share; 200,000 shares authorized; 23,755 25 24 and 24,476 shares issued and outstanding, respectively Additional paid in capital 50,281 37,696 Treasury stock, 939, and 0 respectively (25,399) – Retained earnings 153,404 109,503 Total stockholder's equity 178,311 147,223 Total liabilities and stockholders' $399,509 $348,022 equity rue21, inc. Reconciliation of GAAP Earnings to Adjusted Earnings (In thousands, except per share data) (Unaudited) Three Months Ended February 2, 2013 GAAP Professional Fees (1) As Adjusted Income from Operations $23,543 $1,200 $24,743 Interest expense (income), 37 37 net Income before income taxes 23,506 24,706 Provision for income taxes 8,462 432 8,894 Net income $15,044 $15,812 Basic income per common $0.63 $0.66 share Diluted income per common $0.62 $0.65 share Weighted average basic 23,783 23,783 common shares outstanding Weighted average diluted 24,393 24,393 common shares outstanding Twelve Months Ended February 2, 2013 Expense GAAP Adjustments (1) (2) As Adjusted Income from Operations $68,461 $4,100 $72,561 Interest expense (income), (27) (27) net Income before income taxes 68,488 72,588 Provision for income taxes 24,587 1,491 26,078 Net income $43,901 $46,510 Basic income per common $1.81 $1.92 share Diluted income per common $1.76 $1.87 share Weighted average basic 24,287 24,287 common shares outstanding Weighted average diluted 24,903 24,903 common shares outstanding 1. Estimated adjusted basic and diluted earnings per common share represents management's estimate of basic and diluted earnings per common share for the periods presented, before expenses associated with our non-recurring professional fees in Fourth Quarter 2013.Adjusted basic and diluted earnings per common share is presented because management believes it is a useful adjunct to basic and diluted earnings per common share under accounting principles generally accepted in the United States since it is a meaningful measure of the Company's ongoing operating performance excluding the non-recurring costs. Adjusted basic and diluted earnings per common share is not a measure of financial performance under accounting principles generally accepted in the United States and should not be considered as an alternative to basic and diluted earnings per common share. 2. Estimated adjusted basic and diluted earnings per common share represents management's estimate of basic and diluted earnings per common share for the periods presented, before expenses associated with our legal settlement for California wage and hour litigation in October 2012.Adjusted basic and diluted earnings per common share is presented because management believes it is a useful adjunct to basic and diluted earnings per common share under accounting principles generally accepted in the United States since it is a meaningful measure of the Company's ongoing operating performance excluding the non-recurring costs for our California wage and hour litigation costs. Adjusted basic and diluted earnings per common share is not a measure of financial performance under accounting principles generally accepted in the United States and should not be considered as an alternative to basic and diluted earnings per common share. CONTACT: Joseph Teklits / Jill Gaul ICR, Inc 203-682-8200 email@example.com firstname.lastname@example.org
rue21, inc. Announces Fourth Quarter and Fiscal Year 2012 Financial Results
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