Five Below, Inc. Announces Fourth Quarter and Fiscal 2012 Financial Results

Five Below, Inc. Announces Fourth Quarter and Fiscal 2012 Financial Results

           Fourth quarter sales increase of 38.0% to $173.6 million

       Fourth quarter GAAP diluted EPS of $0.35; adjusted EPS of $0.39

PHILADELPHIA, March 27, 2013 (GLOBE NEWSWIRE) -- Five Below, Inc.
(Nasdaq:FIVE) today announced financial results for the fourteen weeks and
fifty-three weeks ended February 2, 2013.

For the fourteen weeks ended February 2, 2013:

  *Net sales increased by 38.0% to $173.6 million from $125.8 million in the
    fourth quarter of fiscal 2011; comparable store sales increased by 4.4% on
    a thirteen week basis.
  *Operating income increased to $33.0 million from $20.1 million in the
    fourth quarter of fiscal 2011. Adjusted operating income, which excludes
    the impact of the founders' transaction in both periods and costs
    associated with the Company's secondary public offering in the fourth
    quarter of fiscal 2012 (see GAAP/Non-GAAP reconciliation table), increased
    to $35.6 million from $26.4 million in the fourth quarter of fiscal 2011.
  *The Company opened 1 new store and ended the quarter with 244 stores in 18
    states, an increase of 27% from the end of fiscal 2011.
  *Net interest expense (income) increased to $0.5 million from $(24,000) in
    the fourth quarter of fiscal 2011. The increase in net interest expense
    resulted from a $100 million term loan entered into in the second quarter
    of fiscal 2012, of which $65.5 million has been repaid subsequent to the
    completion of the Company's initial public offering ("IPO") on July 24,
    2012.
  *Net income was $19.2 million compared to $12.4 million in the fourth
    quarter of fiscal 2011. Adjusted net income, which excludes the impact of
    the founders' transaction in both periods and costs associated with the
    secondary public offering in the fourth quarter of 2012 (see GAAP/Non-GAAP
    reconciliation table), was $21.4 million compared to $16.1 million for the
    fourth quarter of fiscal 2011.
  *U.S. generally accepted accounting principles, or GAAP, diluted income per
    common share was $0.35 compared to $0.17 in the fourth quarter of fiscal
    2011 and includes GAAP adjustments for income attributable to
    participating securities in fiscal 2012 and fiscal 2011 and GAAP
    adjustments for the potential impact of the Company's Series A 8%
    Convertible Preferred Stock cumulative dividends in fiscal 2011. Adjusted
    diluted income per common share, which is adjusted net income on an
    adjusted diluted weighted average common shares outstanding basis (see
    GAAP/Non-GAAP reconciliation table), was $0.39 per share compared to $0.31
    per share in the fourth quarter of fiscal 2011.

Thomas Vellios, Co-Founder, President and CEO, stated: "We are extremely
pleased with our fourth quarter and full-year results which demonstrate that
our dynamic, trend-right merchandise offering, differentiated shopping
experience and value price-points continue to resonate with both new and
existing customers alike. The strong holiday quarter capped a year in which we
delivered 41% sales growth and 50% adjusted operating income growth.Our new
stores continue to illustrate the universal appeal, consistency and strength
of our model with the above-plan performance of our 2012 class driven by
openings in new markets like Atlanta, St. Louis and outstate Michigan, as well
as existing markets where we are expanding our presence. In addition, our
comparable stores delivered a strong 7% sales increase for the year on a 52
week basis. I am extremely proud of the entire Five Below team and their
contributions that drove our 2012 performance."

Mr. Vellios added, "As we look to 2013, the planned 60 net store openings
include promising new markets in Texas, as well as existing markets that offer
significant opportunities for expansion. Our second distribution center in
Olive Branch, Mississippi is expected to be operational in May of this year,
and we continue to invest in talent, technology and systems as we strengthen
our infrastructure and solidify the foundation for our continued growth."

For the fifty-three weeks ended February2, 2013:

  *Net sales increased by 41.0% to $418.8 million from $297.1 million in
    fiscal 2011; comparable store sales increased by 7.1% on a fifty-two week
    basis.
  *Operating income increased to $37.7 million from $26.2 million in fiscal
    2011. Adjusted operating income, which excludes the impact of the
    founders' transaction in both periods and costs associated with the
    Company's secondary public offering in the fourth quarter of fiscal 2012
    (see GAAP/Non-GAAP reconciliation table), increased to $49.5 million from
    $33.0 million in fiscal 2011.
  *The Company opened 52 new stores compared to 50 net new stores opened in
    fiscal 2011.
  *Net interest expense (income) increased to $2.4 million from $(16,000) in
    fiscal 2011.The increase in net interest expense resulted from a $100
    million term loan entered into in the second quarter of fiscal 2012, of
    which $65.5 million has been repaid subsequent to the completion of the
    Company's IPO on July 24, 2012.
  *Loss on debt extinguishment was $1.6 million for fiscal 2012 and was the
    result of a write-off of deferred financing costs in connection with the
    partial repayment of the Company's term loan.
  *Net income was $20.0 million compared to $16.1 million in fiscal 2011.
    Adjusted net income, which excludes the impact of the founders'
    transaction in both periods and costs associated with the secondary public
    offering in the fourth quarter of fiscal 2012 (see GAAP/Non-GAAP
    reconciliation table), was $27.4 million compared to $20.1 million in
    fiscal 2011.
  *GAAP diluted loss per common share was $(1.28) compared to $0.00 in fiscal
    2011 and includes dividends paid to preferred and unvested restricted
    shareholders in fiscal 2012 and GAAP adjustments for the potential impact
    of the Company's Series A 8% Convertible Preferred Stock cumulative
    dividends and income attributable to participating securities in fiscal
    2011.Adjusted diluted income per common share, which is adjusted net
    income on an adjusted diluted weighted average common shares outstanding
    basis (see GAAP/Non-GAAP reconciliation table), was $0.51 per share
    compared to $0.39 per share in fiscal 2011.

Five Below follows the retail 4-5-4 reporting calendar, which included an
extra week in the fourth quarter of fiscal 2012 (the 53^rd week).The 53^rd
week contributed approximately $5.0 million in sales and less than $0.01 in
adjusted diluted income per common share.

Balance sheet highlights as of February2, 2013:

  *Cash and cash equivalents: $56.1 million
  *Total debt: $34.5 million
  *Total liquidity (cash and cash equivalents plus availability on a $20
    million revolver facility): $76.1 million

First Quarter and Fiscal 2013 Outlook:

For the first quarter of fiscal 2013, net sales are expected to be in the
range of $92 million to $94 million based on opening 8 net new stores and
assuming a 4% increase in comparable store sales. GAAP net income is expected
to be in the range of $0.2 million to $0.8 million, with a GAAP diluted income
per common share range of $0.00 to $0.01 per share on approximately 53.4
million estimated diluted weighted average common shares outstanding.
Excluding $0.9 million, or $0.02 per adjusted diluted share in tax-effected
expenses related to the founders' transaction, adjusted net income is expected
to be approximately $1.1 million to $1.7 million, or $0.02 to $0.03 per
diluted share based on estimated adjusted diluted weighted average common
shares outstanding of approximately 54.6 million.

For fiscal 2013, net sales are expected to be in the range of $516 million to
$521 million based on opening approximately 60 net new stores for the full
year and assuming a 4% increase in comparable store sales. GAAP net income is
expected to be in the range of $30.3 million to $31.8 million, with a GAAP
diluted income per common share of $0.56 to $0.59 per share on approximately
54.0 million estimated diluted weighted average common shares
outstanding.Excluding $3.7 million, or $0.07 per adjusted diluted share in
tax-effected expenses related to the founders' transaction, adjusted net
income is expected to be in the range of $34.0 million to $35.5 million, or
$0.62 to $0.65 per diluted share based on estimated adjusted diluted weighted
average common shares outstanding of approximately 54.8 million.

Conference Call Information:

A conference call to discuss the fourth quarter and fiscal 2012 financial
results is scheduled for today, March 27, 2013, at 4:30 PM Eastern Time.
Investors and analysts interested in participating in the call are invited to
dial 888-417-8533 (international callers please dial 719-457-2628)
approximately 10 minutes prior to the start of the call. A live audio webcast
of the conference call will be available online at www.fivebelow.com in the
investor relations section of the website.

A taped replay of the conference call will be available within two hours of
the conclusion of the call and can be accessed both online and by dialing
(877)870-5176. The pin number to access the telephone replay is 9867445. The
replay will be available until April3, 2013.

Non-GAAP Information

This press release includes non-GAAP adjusted operating income, adjusted net
income, adjusted diluted weighted average common shares outstanding and
adjusted diluted income per common share, each a non-GAAP financial measure.
The Company has reconciled these non-GAAP financial measures with the most
directly comparable GAAP financial measures in tables accompanying this
release. The Company believes that these non-GAAP financial measures not only
provide its management with comparable financial data for internal financial
analysis but also provide meaningful supplemental information to investors.
Specifically, these non-GAAP financial measures allow investors to better
understand the performance of the Company's business and facilitate a
meaningful evaluation of its quarterly and fiscal year 2012 diluted income per
common share and actual results on a comparable basis with its quarterly and
fiscal year 2011 results. In evaluating these non-GAAP financial measures,
investors should be aware that in the future the Company may incur expenses or
be involved in transactions that are the same as or similar to some of the
adjustments in this presentation. The Company's presentation of non-GAAP
financial measures should not be construed to imply that its future results
will be unaffected by any such adjustments. The Company has provided this
information as a means to evaluate the results of its ongoing operations.
Other companies in the Company's industry may calculate these items
differently than it does. Each of these measures is not a measure of
performance under GAAP and should not be considered as a substitute for the
most directly comparable financial measures prepared in accordance with GAAP.
Non-GAAP financial measures have limitations as analytical tools, and
investors should not consider them in isolation or as a substitute for
analysis of the Company's results as reported under GAAP.

Forward-Looking Statements:

This news release includes forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 as contained in
Section27A of the Securities Act of 1933 and Section21E of the Securities
Exchange Act of 1934, which reflect management's current views and estimates
regarding the Company's industry, business strategy, goals and expectations
concerning its market position, future operations, margins, profitability,
capital expenditures, liquidity and capital resources and other financial and
operating information. Investors can identify these statements by the fact
that they use words such as "anticipate,""assume," "believe," "continue,"
"could," "estimate," "expect," "intend," "may," "plan," "potential,"
"predict," "project," "future" and similar terms and phrases. The Company
cannot assure investors that future developments affecting the Company will be
those that it has anticipated. Actual results may differ materially from these
expectations due to risks relating to the Company's strategy and expansion
plans, the availability of suitable new store locations, risks that consumer
spending may decline and that U.S. and global macroeconomic conditions may
worsen, risks related to the Company's continued retention of its senior
management and other key personnel, risks relating to changes in consumer
preferences and economic conditions, risks relating to the Company's
distribution centers, quality or safety concerns about the Company's
merchandise, events that may affect the Company's vendors, increased
competition from other retailers, risks relating to trade restrictions, risks
associated with leasing substantial amounts of space, and other factors that
are set forth in the Company's filings with the Securities and Exchange
Commission ("SEC"), including risk factors contained in the Company's final
prospectus relating to the secondary public offering dated January 29, 2013
filed with the SEC and available at www.sec.gov. If one or more of these risks
or uncertainties materialize, or if any of the Company's assumptions prove
incorrect, the Company's actual results may vary in material respects from
those projected in these forward-looking statements. Any forward-looking
statement made by the Company in this news release speaks only as of the date
on which the Company makes it. Factors or events that could cause the
Company's actual results to differ may emerge from time to time, and it is not
possible for the Company to predict all of them. The Company undertakes no
obligation to publicly update any forward-looking statement, whether as a
result of new information, future developments or otherwise, except as may be
required by any applicable securities laws.

About Five Below

Five Below is a rapidly growing specialty value retailer offering a broad
range of trend-right, high-quality merchandise targeted at the teen and
pre-teen customer. Five Below offers a dynamic, edited assortment of exciting
products, all priced at $5 and below, including select brands and licensed
merchandise across a number of category worlds – Style, Room, Sports, Media,
Crafts, Party, Candy and Now. Five Below is headquartered in Philadelphia,
Pennsylvania.


FIVE BELOW, INC.
Balance Sheets
(Unaudited)
(in thousands, except share data)
                                                            
                                            February 2, 2013 January 28, 2012
Assets                                                       
Current assets:                                              
Cash and cash equivalents                    $56,081        $41,293
Inventories                                  60,831           38,790
Prepaid income taxes                         36               —
Deferred income taxes                        1,295            4,863
Prepaid expenses and other current assets    11,433           7,303
Total current assets                         129,676          92,249
Property and equipment, net                  59,040           42,040
Other assets                                 944              238
                                            $189,660       $134,527
Liabilities and Shareholders' Equity                         
(Deficit)
Current liabilities:                                         
Line of credit                               $—             $—
Current portion of note payable              15,000           —
Accounts payable                             27,952           23,588
Income taxes payable                         7,083            9,139
Accrued salaries and wages                   4,204            9,254
Other accrued expenses                       14,545           7,961
Total current liabilities                    68,784           49,942
Notes payable                                19,500           250
Deferred rent and other                      29,082           20,933
Deferred income taxes                        1,550            1,306
Total liabilities                            118,916          72,431
Preferred stock                              —                191,855
Shareholders' equity (deficit):                              
Common stock                                 540              162
Additional paid-in capital                   270,637          3,691
Accumulated deficit                          (200,433)        (133,612)
Total shareholders' equity (deficit)         70,744           (129,759)
                                            $189,660       $134,527



FIVE BELOW, INC.
Statements of Operations
(Unaudited)
(in thousands, except share and per share data)
                                                              
                           Fourteen     Thirteen     Fifty-three  Fifty-two
                          weeks ended  weeks ended  weeks ended  weeks ended
                           February 2,  January 28,  February 2,  January 28,
                           2013         2012         2013         2012
Net sales                  $173,589   $125,825   $418,825   $297,113
Cost of goods sold         102,451      73,935       268,989      192,252
Gross profit               71,138       51,890       149,836      104,861
Selling, general and       38,095       31,757       112,182      78,640
administrative expenses
Operating income           33,043       20,133       37,654       26,221
Interest expense (income), 545          (24)         2,374        (16)
net
Loss on debt               —            —            1,594        —
extinguishment
Other income               (150)        —            (408)        —
Income before income taxes 32,648       20,157       34,094       26,237
Income tax expense         13,442       7,730        14,069       10,159
Net income                 19,206       12,427       20,025       16,078
Dividend paid to preferred
and unvested restricted    —            —            (65,403)     —
shareholders
Series A 8% Convertible
Preferred Stock cumulative —            (4,210)      —            (15,913)
dividends
Net income attributable to (494)        (5,437)      —            (109)
participating securities
Net income (loss)
attributable to common     $18,712    $2,780     $(45,378)  $56
shareholders
Basic income (loss) per    $0.36      $0.17      $(1.28)    $—
common share
Diluted income (loss) per  $0.35      $0.17      $(1.28)    $—
common share
Dividends declared and     $ —          $ —          $2.02      $ —
paid per common share
Weighted average shares                                        
outstanding:
Basic shares               52,583,441   15,912,400   35,444,200   15,903,599
Diluted shares             52,976,793   15,913,085   35,444,200   15,904,108



FIVE BELOW, INC.
Statements of Cash Flows
(Unaudited)
(in thousands)
                                                            
                                             Fifty-three     Fifty-two
                                            weeks ended      weeks ended
                                             February 2, 2013 January 28, 2012
Operating activities:                                        
Net income                                   $20,025        $16,078
Adjustments to reconcile net income to net                   
cash provided by operating activities:
Depreciation and amortization                9,599            7,071
Gain on conversion of note payable           (200)            —
Loss on debt extinguishment                  1,594            —
Loss on disposal of property and equipment   58               273
Amortization of deferred financing costs     455              28
Warrant expense related to professional      43               49
service providers for services rendered
Stock-based compensation expense             12,324           1,197
Deferred income tax expense                  3,812            56
Changes in operating assets and liabilities:                 
Prepaid income taxes                         (36)             —
Income tax receivable                        —                20
Inventories                                  (22,041)         (12,036)
Prepaid expenses and other assets            (4,133)          (3,270)
Accounts payable                             3,369            12,481
Income taxes payable                         (2,056)          8,998
Accrued salaries and wages                   (5,050)          7,211
Deferred rent                                7,723            6,997
Other accrued expenses                       4,877            1,542
Net cash provided by operating activities    30,363           46,695
Investing activities:                                        
Capital expenditures                         (22,890)         (18,558)
Net cash used in investing activities        (22,890)         (18,558)
Financing activities:                                        
Borrowing under Term Loan Facility           100,000          —
Repayment of Term Loan Facility              (65,500)         —
Cash paid for debt financing costs           (2,751)          —
Repayment of note payable                    (50)             —
Dividends paid to shareholders               (99,451)         —
Net proceeds from issuance of common stock   73,198           1,110
Proceeds from exercise of and prepayment
related to warrants and options to purchase  239              33
common stock
Repurchase of unvested restricted shares     (17)             (140)
related to stock option exercises
Excess tax benefit related to restricted
shares and exercise of stock options and     1,647            —
warrants
Net cash provided by financing activities    7,315            1,003
Net increase in cash and cash equivalents    14,788           29,140
Cash and cash equivalents at beginning of    41,293           12,153
year
Cash and cash equivalents at end of year     $56,081        $41,293



FIVE BELOW, INC.
GAAP to Non-GAAP Reconciliation of Statements of Operations
(Unaudited)
(in thousands, except share and per share data)
                                                       
Reconciliation of operating income, as reported, to adjusted operating    
income
                                                                         
                   Fourteen    Thirteen    Fifty-three  Fifty-two
                  weeks ended  weeks ended  weeks ended   weeks ended
                   February 2,  January 28,  February 2,   January 28,
                   2013         2012         2013          2012
Operating income   $33,043    $20,133    $37,654     $26,221
Adjustments:                                            
Founders'          1,515        6,270        10,797        6,816
transaction (1)
Secondary public   $1,000     $—         $1,000      $—
offering fees (2)
Adjusted operating $35,558    $26,403    $49,451     $33,037
income
                                                       
Reconciliation of net income (loss) attributable to common                
shareholders, as reported, to adjusted net income
                                                                         
                   Fourteen    Thirteen     Fifty-three   Fifty-two
                  weeks ended  weeks ended  weeks ended   weeks ended
                   February 2,  January 28,  February 2,   January 28,
                   2013         2012         2013          2012
Net income (loss)
attributable to    $18,712    $2,780     $(45,378)   $56
common
shareholders
Adjustments:                                            
Dividends paid to
preferred and
unvested           —            —            65,403        —
restricted
shareholders
Series A 8%
Convertible
Preferred Stock    —            4,210        —             15,913
("Preferred
stock") cumulative
dividends
Income
attributable to    494          5,437        —             109
participating
securities
Net income         19,206       12,427       20,025        16,078
Adjustments:                                            
Founders'          1,515        6,270        10,797        6,816
transaction (1)
Secondary public   1,000        —            1,000         —
offering fees (2)
Less tax benefit   (348)        (2,549)      (4,373)       (2,767)
(3)
Adjusted net       $21,373    $16,148    $27,449     $20,127
income
                                                       
Reconciliation of diluted weighted average common shares outstanding,
as reported, to adjusted diluted weighted average common shares           
outstanding
                                                                         
                   Fourteen     Thirteen    Fifty-three   Fifty-two
                  weeks ended  weeks ended  weeks ended   weeks ended
                   February 2,  January 28,  February 2,   January 28,
                   2013         2012         2013          2012
Diluted weighted
average common     52,976,793   15,913,085   35,444,200    15,904,108
shares outstanding
Adjustments to                                          
numerator:
Preferred shares   —            30,894,953   14,739,641    30,894,953
conversion
Initial public
offering shares    —            4,807,692    2,293,697     4,807,692
issuance
Unvested and
vested restricted  1,393,438    —            1,519,512     —
stock (4)
Diluted effect of
stock options and  —            —            224,223       —
warrants (5)
Adjusted diluted
weighted average   54,370,231   51,615,730   54,221,273    51,606,753
common shares
outstanding



FIVE BELOW, INC.
GAAP to Non-GAAP Reconciliation of Statements of Operations
(Unaudited)
(in thousands, except share and per share data)

Reconciliation of diluted income (loss) per common share, as reported,
to adjusted diluted income per common share
                                                      
                   Fourteen      Thirteen    Fifty-three  Fifty-two
                  weeks ended   weeks ended weeks ended  weeks ended
                   February 2,   January 28, February 2,  January 28,
                   2013          2012        2013         2012
Diluted income
(loss) per common  $0.35       $0.17     $(1.28)    $—
share, as reported
Adjustments:                                           
Dividends paid to
preferred and
unvested           —             —           1.85         —
restricted
shareholders per
share
Series A 8%
Convertible
Preferred Stock    —             0.26        —            1.00
cumulative
dividends per
share
Founders'
transaction per
share and          0.05          0.39        0.33         0.43
secondary public
offering fees (1)
(2)
Income tax benefit (0.01)        (0.16)      (0.12)       (0.17)
per share
Adjustments to
weighted average
common shares      —             (0.35)      (0.27)       (0.87)
outstanding per
share
Adjusted diluted
income per common  $0.39       $0.31     $0.51      $0.39
share
                                                      
(1) Founders' transaction relates to the amortization of expense for
options granted to the founders in fiscal 2010 and their modification
in March 2012, which cancelled the fiscal 2010 option award to
purchase 2,020,620 shares of common stock and granted an equal number
of restricted shares that vest through March 2014. Fiscal 2011 also
includes $6.1 million of non-contractual executive bonus expense.
(2) During fiscal 2012, the Company incurred $1.0 million of non tax
deductible expenses related to legal, accounting, and other fees in
connection with the filing of its secondary public offering that
occurred in January 2013.
(3) Fiscal year tax benefit based on combined federal and state          
effective tax rate.
(4) Assumes the impact of all unvested and vested restricted stock as   
of the beginning of the period.
(5) Assumes the diluted impact of stock options and warrants and the
Company's Employee Stock Purchase Plan utilizing the treasury stock    
method.

CONTACT: Investor Contact:
         ICR, Inc.
         Farah Soi
         203-682-8200
         Farah.soi@icrinc.com

         Media Contact:
         Gregory FCA
         Joe Hassett
         610-642-8253
 
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