Vera Bradley Announces Fiscal 2014 First Quarter Financial Results

Vera Bradley Announces Fiscal 2014 First Quarter Financial Results

  *Net revenues increased 5% to $123.0 million.
  *Direct net revenues increased 24%, including an increase of 0.9% in
    comparable-store sales; Indirect net revenues decreased 15%.
  *Diluted EPS were $0.23 compared to $0.31 in the first quarter of fiscal
    2013.

FORT WAYNE, Ind., June 5, 2013 (GLOBE NEWSWIRE) -- Vera Bradley, Inc.
(Nasdaq:VRA) today announced its financial results for the fiscal 2014 first
quarter ended May 4, 2013. The Company reported net revenues of $123.0 million
for the first quarter, compared to $117.2 million in the first quarter of
fiscal 2013, an increase of $5.8 million, or 5.0%. Diluted earnings per share
for the quarter were $0.23, a decrease of 26% over diluted earnings per share
in the first quarter of fiscal 2013.

Mike Ray, Chief Executive Officer commented, "We delivered on our expectations
for the first quarter. Net revenue slightly exceeded our guidance, with
comparable store sales growth of 0.9%, and indirect performance in line with
expectations, while gross margin was slightly ahead. We also continue to be
pleased with our new store performance as well as the growth in our e-commerce
channel.Looking forward, in light of our outlook, we have narrowed our focus
to ensure that we can execute our strategies as quickly as possible, both to
address our challenges and to achieve our longer-term vision for the brand."

In the Direct segment, revenues increased 24% to $73.7 million, as a result of
growth across all of our channels.In our stores, net revenues grew 34% during
the quarter, due to the opening of 19 full-price and four outlet stores since
the first quarter of fiscal 2013. Comparable store sales increased
0.9%.E-commerce revenue grew 23% primarily due to continued growth in website
traffic. Indirect revenues decreased 15% to $49.3 million, primarily due to
cautious ordering from our specialty retailers in this challenging retail
environment.

Gross profit for the first quarter increased 4.8% to $68.5 million, resulting
in a gross profit margin of 55.6%, in line with the first quarter of fiscal
2013.

Total SG&A expense was $55.2 million for the first quarter, compared to $47.2
million in the prior year.SG&A as a percentage of net revenues was 44.9%,
unfavorable by 460 basis points compared to the prior year, primarily due to
lower revenues in the Indirect segment and full-price stores and annualization
of employee-related expenses.

Operating income decreased 27% to $15.2 million, or 12.3% of net revenues, in
the first quarter, compared to operating income of $20.8 million, or 17.8% of
net revenues in the first quarter of fiscal 2013.

The effective tax rate was 38.9% for the quarter, in line with the prior year.

Net income for the quarter was $9.2 million, or $0.23 per diluted share,
compared to $12.6 million, or $0.31 per diluted share, in the first quarter of
fiscal 2013.

Cash flow from operations during the first quarter totaled $14.9 million,
compared to $30.7 million for the first quarter of fiscal 2013, with the
decrease primarily a result of increased inventory.Cash flow for the quarter
was used to pay down the Company's debt facility to $5.0 million at quarter
end. 

Outlook

For the second quarter of fiscal 2014, the Company expects net revenues to be
in a range of $123 million to $126 million, compared to $123 million in the
second quarter of fiscal 2013.Gross margin for the second quarter is expected
to expand by approximately 200 basis points.

Diluted earnings per share are expected to be in a range of $0.31 to
$0.33.The earnings per share estimate assumes an effective tax rate of 38.5%
and fully diluted weighted average shares outstanding of 40.6 million.

For fiscal 2014, the Company now expects net revenues to be in a range of $570
million to $575 million.Gross margin is expected to decline up to 20 basis
points for the full year.

Diluted earnings per share for the full year are now expected to be in a range
of $1.74 to $1.78.This guidance includes an effective tax rate of 38.5% and
fully diluted weighted average shares outstanding of 40.7 million.Capital
spending for the full year remains at approximately $20 million.

Other Company Developments

Vera Bradley also announced today in a separate press release that Michael Ray
has informed the Board of Directors that he plans to retire as CEO. The Board
is conducting a search for his successor, and Mr. Ray will continue to serve
as CEO until a successor is in place.

Call Information

A conference call to discuss fiscal 2014 first quarter results is scheduled
for today, June 5, 2013, 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 June 19, 2013. To access the recording, listeners should dial (877)
870-5176, and enter the access code, 9551028.

About Vera Bradley, Inc.

Vera Bradley is a leading designer of women's handbags and accessories,
luggage and travel items, eyewear, stationery and gifts. Founded in 1982 by
friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand's iconic
designs and versatile styles offer women of all ages a colorful way to
accessorize every look. Vera Bradley offers a unique, multi-channel sales
model as well as a focus on service and a high level of engagement with
fans.Fiscal 2013 net revenues increased by 17% to $541 million. The company's
commitment to breast cancer research continues to increase its reach through
the Vera Bradley Foundation for Breast Cancer. For more information about Vera
Bradley (Nasdaq: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 February 2, 2013.
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)
                                                                  
                                            May 4,     February 2, April 28,
                                             2013       2013        2012
Assets                                                            
Current assets:                                                   
Cash and cash equivalents                    $8,229   $9,603    $6,022
Accounts receivable, net                     26,758    34,811     36,109
Inventories                                  138,949   131,562    98,231
Prepaid expenses and other current assets    9,211     11,016     8,447
Deferred income taxes                        11,860    11,348     8,203
Total current assets                         195,007   198,340    157,012
                                                                 
Property, plant, and equipment, net          79,652    77,211     61,535
Other assets                                 1,630     1,768      766
Total assets                                 $276,289 $277,319  $219,313
                                                                 
Liabilities and Shareholders' Equity                              
Current liabilities:                                              
Accounts payable                             $17,768  $14,853   $31,195
Accrued employment costs                     9,571     14,162     8,047
Other accrued liabilities                    18,335    16,532     16,613
Income taxes payable                         5,761     7,094      7,374
Current portion of long-term debt            42        58         90
Total current liabilities                    51,477    52,699     63,319
                                                                 
Long-term debt                               5,030     15,037     7,322
Deferred income taxes                        6,102     6,078      4,243
Other long-term liabilities                  10,134    9,250      7,619
Total liabilities                            72,743    83,064     82,503
                                                                 
Shareholders' equity:                                             
Additional paid-in capital                   76,032    75,675     73,950
Retained earnings                            128,379   119,190    62,946
Accumulated other comprehensive (loss)       (865)     (610)      (86)
income
Total shareholders' equity                   203,546   194,255    136,810
Total liabilities and shareholders' equity   $276,289 $277,319  $219,313
                                                                 

Vera Bradley, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
                                                       
                                                       
                                             Thirteen Weeks Ended
                                             May 4,     April 28
                                              2013       2012
                                                       
Net revenues                                  $123,033 $117,201
Cost of sales                                 54,567    51,899
Gross profit                                  68,466    65,302
Selling, general, and administrative expenses 55,227    47,191
Other income                                  1,951     2,699
Operating income                              15,190    20,810
Interest expense, net                         141       191
Income before income taxes                    15,049    20,619
Income tax expense                            5,860     7,993
Net income                                    $9,189   $12,626
                                                       
Basic weighted-average shares outstanding     40,580    40,515
Diluted weighted-average shares outstanding   40,624    40,547
Basic earnings per share                      $0.23    $0.31
Diluted earnings per share                    $0.23    $0.31
                                                       

Vera Bradley, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
                                                                   
                                                         Thirteen Weeks Ended
                                                         May 4,     April 28,
                                                          2013       2012
Cash flows from operating activities                                
Net income                                                $9,189   $12,626
Adjustments to reconcile net income to net cash provided            
by
(used in) operating activities:                                     
Depreciation of property, plant, and equipment            3,323     2,268
Provision for doubtful accounts                           (213)     195
Loss on disposal of property, plant, and equipment        2         21
Stock-based compensation                                  806       625
Deferred income taxes                                     (548)     (155)
Changes in assets and liabilities:                                  
Accounts receivable                                       8,266     1,793
Inventories                                               (7,567)   8,587
Prepaid expenses and other assets                         1,943     (8)
Accounts payable                                          2,915     3,919
Income taxes payable                                      (1,333)   5,669
Accrued and other liabilities                             (1,904)   (4,857)
Net cash provided by operating activities                 14,879    30,683
                                                                   
Cash flows from investing activities                                
Purchases of property, plant, and equipment               (5,811)   (11,512)
Net cash used in investing activities                     (5,811)   (11,512)
                                                                   
Cash flows from financing activities                                
Payments on financial-institution debt                    (35,000)  (32,750)
Borrowings on financial-institution debt                  25,000    15,000
Payments on vendor-financed debt                          (23)      (22)
Tax withholdings for equity compensation                  (389)     (265)
Net cash used in financing activities                     (10,412)  (18,037)
Effect of exchange rate changes on cash and cash          (30)      (34)
equivalents
                                                                   
Net increase (decrease) in cash and cash equivalents      (1,374)   1,100
Cash and cash equivalents, beginning of period            9,603     4,922
Cash and cash equivalents, end of period                  $8,229   $6,022
                                                                   

CONTACT: Investors:
         Vera Bradley
         Paul G. Blair
         pblair@verabradley.com
         (260) 207-5183
        
         Media:
         877-708-VERA (8372)
         Mediacontact@verabradley.com
 
Press spacebar to pause and continue. Press esc to stop.