francesca's Reports First Fiscal Quarter 2013 Financial Results

francesca's Reports First Fiscal Quarter 2013 Financial Results

  *Net sales increased 29% to $79.0 million
    
  *Comparable sales increased 2%
    
  *Adjusted diluted earnings per share increased 24% to $0.26

HOUSTON, June 5, 2013 (GLOBE NEWSWIRE) --Francesca's Holdings Corporation
(Nasdaq:FRAN) today reported net income for the first quarter of 2013 of $10.9
million or $0.24 per diluted share, compared to net income for the first
quarter of 2012 of $8.7 million, or $0.20 per diluted share. Adjusted net
income for the first quarter of 2013 was $11.5 million, or $0.26 per diluted
share, excluding $0.6 million net of tax charges related to a secondary equity
offering, compared to adjusted net income for the first quarter of 2012 of
$9.2M, or $0.21, excluding $0.5 million net of tax charges related to a
secondary equity offering.

Neill Davis, Chief Executive Officer, commented, "We delivered on our earnings
expectations as well as several strategic goals in the first quarter. We
opened 56 new boutiques increasing our market presence to 416 boutiques,
achieved record direct-to-consumer sales now representing 2.1% of total
Company sales for the quarter, and successfully completed the rollout of our
new point-of-sale system in our boutiques. Our continued execution on key
growth initiatives combined with our differentiated business model and unique
brand experience position us well for long term growth."

FIRST QUARTER SUMMARY

Net sales for the thirteen weeks increased 29% to $79.0 million driven by 56
new boutique openings in the first quarter. Sales growth rates were strongest
in jewelry and accessories, outpacing increases in clothing and gifts. 

Comparable sales, including direct-to-consumer sales, increased 2% on top of a
16% increase in the prior year quarter.Direct-to-consumer achieved record
sales with a 97% increase over the prior year quarter driven by increases in
traffic, conversion rates, and average transaction values.Comparable sales,
excluding direct-to-consumer sales, were flat to the prior year quarter and
below the Company's expectations of an increase in the range of 4% to 5%.The
decrease was driven by lower than expected transactions as a reflection of the
unseasonable weather conditions that persisted throughout the quarter.

Gross profit, as a percentage of net sales, was 52.4% compared to 53.1% in the
prior year quarter, resulting from lower merchandise margins due to higher
levels of promotions compared to the prior year quarter.

Selling, general and administrative (SG&A) expenses excluding $0.6 million in
charges related to a secondary equity offering increased 31% to $22.8 million
or 28.8% of net sales compared to the prior year quarter, excluding $0.5
million in charges related to a secondary equity offering, of $17.4 million or
28.4% of sales. The increase was principally due to operating additional
boutiques and infrastructure investments to support the larger boutique base
and direct-to-consumer sales growth.

Adjusted income from operations for the quarter increased 23% to $18.6 million
or 23.5% of net sales compared to $15.1 million or 24.7% of net sales in the
prior year quarter. 

BALANCE SHEET SUMMARY

Total cash and cash equivalents at quarter end were $33.8 million compared to
$8.2 million at the prior year quarter end, and $29.9 million at the end of
fiscal 2012.The Company had no long-term debt at the end of the quarter
compared to $12.0M at the end of the prior year quarter.

Total inventories, excluding reserves, increased 28% over the prior year
quarter and was in-line with net sales growth.

SECOND FISCAL QUARTER AND FULL FISCAL YEAR 2013 GUIDANCE

For the second quarter ending August 3, 2013, net sales are expected to be
between $94.5 million and $95.5 million assuming a 1% to 2% increase in
comparable sales including direct-to-consumer on top of the prior year
comparable sales increase of 21% and the opening of approximately 21
additional new boutiques. Earnings per diluted share are expected to be in the
range of $0.35 to $0.36, an increase of 21% to 24% over the prior year
adjusted diluted earnings per share of $0.29, excluding $0.2 million net of
tax related to stock option acceleration.

For the full year ending February 1, 2014, net sales are expected to be in the
range of $365.0 million to $370.0 million assuming a 4% to 5% increase in
comparable sales including direct-to-consumer and the opening of 85 new
boutiques. Adjusted diluted earnings per share are expected to be in the range
of $1.27 to $1.30.This is an increase of 22% to 25% over the 52- week prior
year adjusted diluted earnings per share of $1.04 which excludes $0.5 million
net of tax charge related to a secondary equity offering, $0.2 million net of
tax charge related to stock option acceleration, $0.2 million net of tax
charge related to the relocation of our headquarters and distribution
facilities, and an approximate $0.03 of diluted earnings per share impact from
the 53^rd week. The number of diluted average shares outstanding is expected
to be 44.9 million for both the second quarter and full year.The effective
tax rate is estimated to be 39.3% for the second quarter and the full year.
Capital expenditures are planned in a range of $22.0 to $25.0 million.

Conference Call Information

A conference call to discuss first quarter 2013 results is scheduled for June
5, 2013, at 4:30 p.m. EDT. A live web cast of the conference call will be
available in the investor relations section of the Company's website,
www.francescas.com. In addition, a replay of the call will be available after
the call and remain available until July 5, 2013. To access the telephone
replay, listeners should dial (877) 870-5176. The access code for the replay
is 5635323. A replay of the web cast will also be available shortly after the
call and will remain on the website for ninety days.

SEC Regulation G — Non-GAAP Information

This press release includes non-GAAP adjusted selling, general and
administrative expenses, adjusted income from operations, adjusted net income
and adjusted diluted earnings per share, each a non-GAAP financial measure. We
have reconciled these non-GAAP financial measures with the most directly
comparable GAAP financial measures in the text above. We believe that these
non-GAAP financial measures not only provide our 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 our business
and facilitate a meaningful evaluation of our quarterly and fiscal year 2013
diluted earnings per share and actual results on a comparable basis with our
quarterly and fiscal year 2012 results. These non-GAAP measures should be
considered a supplement to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP.

Forward-Looking Statements

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. 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 our Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 22, 2013. We undertake no obligation to publicly
update or revise any forward-looking statement. Financial schedules are
attached to this release.

About Francesca's Holdings Corporation

francesca's® is a growing specialty retailer with retail locations designed
and merchandised to feel like independently owned, upscale boutiques providing
customers a fun and differentiated shopping experience. The merchandise
assortment is a diverse and balanced mix of apparel, jewelry, accessories and
gifts. Today francesca's® operates 429 boutiques in 44 states and also serves
its customers through francescas.com. For additional information on
francesca's®, please visit www.francescas.com.

Francesca's Holdings Corporation
Consolidated Statements of Operations
                                                                 
                                                                 
                                                                 
                    Thirteen Weeks Ended
                    May 4, 2013       April 28, 2012    Variance
                              As a %            As a %                  Basis
                    In USD   of Net    In USD  of Net    In USD  %     Points
                              Sales^(1)         Sales^(1)
                    (Inthousandsexceptper share data)
Net sales           $78,987  100.0%    $61,322 100.0%    $17,665 29%   0.0%
Cost of goods sold   37,615   47.6%     28,779  46.9%     8,836   31%   0.7%
and occupancy costs
Gross profit        41,372   52.4%     32,543  53.1%     8,829   27%   (0.7)%
Selling, general and
administrative       23,351   29.6%     17,885  29.2%     5,466   31%   0.4%
expenses
Income from          18,021   22.8%     14,658  23.9%     3,363   23%   (1.1)%
operations
Interest expense    (116)    (0.1)%    (255)   (0.4)%    139     (55)% 0.3%
Other income        83       0.1%      37      0.1%      46      124%  0.0%
Income before income 17,988   22.8%     14,440  23.5%     3,548   25%   (0.7)%
tax expense
Income tax expense  7,051    8.9%      5,698   9.3%      1,353   24%   (0.4)%
Net income          $10,937  13.8%     $8,742  14.3%     $2,195  25%   (0.5)%
                                                                 
Diluted earnings
(loss) per common    $0.24             $0.20                        
share
Weighted average
diluted shares       44,880            44,702                       
outstanding:
Comparablesales                                                      
change               2%                 16%
                                                                 
^(1)Percentage totals in the above table may not equal the sum        
of the components due to rounding.
                                                                      

Francesca's Holdings Corporation
Consolidated Balance Sheets
(In thousands)
                                                             
                                                             
                                       May 4, 2013 February 2, April 28, 2012
                                                    2013
                                                             
ASSETS                                                        
                                                             
Current assets:                                               
Cash and cash equivalents              $33,763     $29,877     $8,221
Accounts receivable                    7,645       2,504       6,479
Inventories                            23,330      19,049      17,642
Deferred income taxes                  3,567       3,506       2,456
Prepaid expenses and other current      4,772       4,749       3,248
assets
                                                             
Total current assets                   73,077      59,685      38,046
Property and equipment, net            55,729      49,559      38,205
Deferred income taxes                  2,893       2,357       2,200
Other assets, net                      1,383       1,573       2,069
                                                             
                                                             
TOTAL ASSETS                            $133,082    $113,174    $80,520
                                                             
                                                             
LIABILITIES AND STOCKHOLDERS' EQUITY                          
                                                             
Current liabilities:                                          
Accounts payable                       $8,623      $8,358      $10,077
Accrued liabilities                    14,010      10,667      11,458
                                                             
Total current liabilities              22,633      19,025      21,535
Deferred and accrued rents             26,151      22,092      19,245
Long-term debt                         —           —          12,000
                                                             
Total liabilities                      48,784      41,117      52,780
                                                             
                                                             
Commitments and contingencies                                 
                                                             
Stockholders' equity:                                         
Common stock -- $.01 par value,
80.0million shares authorized;
44.0million shares issued and
outstanding at May 4, 2013;             440         439         436
43.9million shares issued and
outstanding at February 2, 2013;
43.6million shares issued and
outstanding at April 28, 2012.
Additional paid-in capital             86,464      85,161      79,166
Accumulated deficit                    (2,606)     (13,543)    (51,862)
                                                             
Total stockholders' equity             84,298      72,057      27,740
                                                             
                                                             
Total liabilities and stockholders'     $133,082    $113,174    $80,520
equity


Francesca's Holdings Corporation
Consolidated Statements of Cash flows
(In thousands)
                                                                  
                                                                  
                                                                  
                                                         Thirteen WeeksEnded
                                                         May 4,    April 28,
                                                          2013      2012
                                                                  
Cash Flows From Operating Activities:                              
Net income                                               $10,937   $8,742
Adjustments to reconcile net income to net cash provided           
by operating activities:
Depreciation expense                                     2,237     1,607
Stock-based compensation expense                         990       734
Excess tax benefit from stock-based compensation         (2,373)   (1,014)
Loss on sale of assets                                   110       7
Amortization of debt issuance costs                      73        73
Deferred income taxes                                    (597)     (1,352)
Changes in assets and liabilities:                                 
Accounts receivable                                      (5,141)   (4,045)
Inventories                                              (4,281)   (3,180)
Prepaid expenses and other assets                        93        (245)
Accounts payable                                         265       1,172
Accrued liabilities                                      5,717     2,579
Deferred and accrued rents                               4,059     4,355
                                                                  
Net cash provided by operating activities                12,089    9,433
                                                                  
                                                                  
Cash Flows Used in Investing Activities:                           
Purchase of property and equipment                       (8,517)   (6,620)
                                                                  
Net cash used in investing activities                    (8,517)   (6,620)
                                                                  
                                                                  
Cash Flows Provided by (Used in) Financing Activities:             
Repayments of borrowings under the revolving credit       —         (10,000)
facility
Proceeds from the exercise of stock options              221       348
Taxes paid related to net settlement of equity awards    (2,280)   —
Excess tax benefit from stock-based compensation         2,373     1,014
                                                                  
Net cash provided by (used in) financing activities      314       (8,638)
                                                                  
                                                                  
Net increase (decrease) in cash and cash equivalents     3,886     (5,825)
Cash and cash equivalents, beginning of year             29,877    14,046
                                                                  
Cash and cash equivalents, end of period                  $33,763   $8,221
                                                                  
                                                                  
Supplemental Disclosures of Cash Flow Information:                 
Cash paid for income taxes                               $2,372    $4,661
Interest paid                                            $40       $210

CONTACT: Investors
        
         ICR, Inc.
         Jean Fontana
         646-277-1214
        
         Company
         Randi Sonenshein, Vice President,
         Finance and Investor Relations
         832-494-2250

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