Five Below, Inc. Announces First Quarter Fiscal 2013 Financial Results

Five Below, Inc. Announces First Quarter Fiscal 2013 Financial Results

                Reports Sales Increase of 33% to $95.6 Million

           Reports GAAP Diluted EPS of $0.03; Adjusted EPS of $0.05

                        Raises Full Year 2013 Guidance

PHILADELPHIA, June 12, 2013 (GLOBE NEWSWIRE) -- Five Below, Inc. (Nasdaq:FIVE)
today announced financial results for the thirteen weeks ended May 4, 2013.

For the thirteen weeks ended May 4, 2013:

  *Net sales increased by 33.1% to $95.6 million from $71.8 million in the
    first quarter of fiscal 2012; comparable store sales increased by 4.2%.
  *Operating income was $3.2 million as compared to an operating loss of $2.0
    million in the first quarter of fiscal 2012. Adjusted operating income,
    which excludes the impact of the founders' transaction in both periods
    (see GAAP/Non-GAAP reconciliation table), increased to $4.7 million as
    compared to $4.3 million in the first quarter of fiscal 2012.
  *The Company opened 14 net new stores and ended the quarter with 258 stores
    in 18 states, an increase in stores of 30% from the end of the first
    quarter of fiscal 2012.
  *Net interest expense increased to $511 thousand from net interest income
    of $37 thousand in the first quarter of fiscal 2012. 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 was repaid
    subsequent to the completion of the Company's initial public offering
    ("IPO") on July 24, 2012. In May 2013, subsequent to the thirteen weeks
    ended May 4, 2013, $15.0 million of principal on the Term Loan Facility
    was repaid.
  *Net income was $1.6 million compared to a net loss of $1.2 million in the
    first quarter of fiscal 2012. Adjusted net income, which excludes the
    impact of the founders' transaction in both periods (see GAAP/Non-GAAP
    reconciliation table), was $2.5 million compared to $2.6 million for the
    first quarter of fiscal 2012.
  *U.S. generally accepted accounting principles, or GAAP, diluted income per
    common share was $0.03 compared to a loss of $0.32 per share in the first
    quarter of fiscal 2012. 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 $0.05 in
    both the first quarter of fiscal 2013 and 2012.

Thomas Vellios, Co-Founder, President and CEO, stated: "The first quarter
played out largely as we had expected and we are pleased to have delivered
results that came in ahead of our original guidance. As we said a few weeks
ago, once the headwinds facing consumers abated mid-quarter, we saw a
strengthening in our traffic and sales patterns as our trend-right merchandise
at extremely compelling prices resonated with our customers."

Mr. Vellios added, "Our new store opening plans for 2013 got off to a good
start with 14 net new stores opened in the first quarter and we are on track
for the planned 60 net openings this year. More than half of our new store
openings will come in the back half of the year as we cluster the 15 planned
openings in the Dallas and Austin metropolitan areas in Texas, which is a new
market for us. And finally, we are pleased to announce that our new Olive
Branch distribution center, just outside of Memphis, Tennessee, is now fully
operational and began shipping to stores in May."

Balance sheet highlights as of May 4, 2013:

  *Cash and cash equivalents: $36.7 million
  *Total debt: $34.5 million
  *Total liquidity (cash and cash equivalents plus availability on a $20
    million revolver facility): $56.1 million

Second Quarter and Fiscal 2013 Outlook:

For the second quarter of fiscal 2013, net sales are expected to be in the
range of $112 million to $114 million based on opening fourteen new stores and
assuming a 4%-5% increase in comparable store sales. GAAP net income is
expected to be in the range of $2.7 million to $3.2 million, with a GAAP
diluted income per common share range of $0.05 to $0.06 on approximately 53.8
million estimated weighted average shares outstanding. Excluding $1.9 million,
or $0.04 per adjusted diluted share in tax-effected expenses related to the
founders' transaction and the estimated costs associated with the secondary
public offering, adjusted net income is expected to be approximately $4.6
million to $5.1 million, or $0.08 to $0.09 per diluted share based on
estimated adjusted diluted weighted average shares outstanding of
approximately 54.5 million.

For fiscal 2013, net sales are expected to be in the range of $524 million to
$529 million based on opening 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 $30.8 million to $32.4 million, with a GAAP diluted income per
common share of $0.57 to $0.60 on approximately 53.8 million estimated
weighted average shares outstanding. Excluding $4.7 million, or $0.09 per
adjusted diluted share in tax-effected expenses related to the founders'
transaction and the estimated costs associated with the secondary public
offering, adjusted net income is expected to be in the range of $35.5 million
to $37.1 million, or $0.65 to $0.68 per diluted share based on estimated
adjusted diluted weighted average shares outstanding of approximately 54.6
million.

Conference Call Information:

A conference call to discuss first quarter fiscal 2013 financial results is
scheduled for today, June 12, 2013, at 4:30 PM Eastern Time. Investors and
analysts interested in participating in the call are invited to dial
1-888-397-5352 (international callers please dial 719-325-2484) 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 6216161. The
replay will be available until June 19, 2013.

Non-GAAP Information

This press release includes non-GAAP adjusted operating income, adjusted net
income, adjusted diluted weighted average 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 2013 diluted income per
common share and actual results on a comparable basis with its quarterly and
fiscal year 2012 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 Section
27A of the Securities Act of 1933 and Section 21E 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 Annual
Report on Form 10-K for the fiscal year ended February 2, 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 in a fun and differentiated store environment, 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)
                                                             
                                  May 4, 2013 February 2, 2013 April 28, 2012
Assets                                                        
Current assets:                                               
Cash and cash equivalents          $36,722   $56,081        $14,503
Inventories                        75,339      60,831           51,531
Income taxes receivable            —           —                7,400
Prepaid income taxes               621         36               —
Deferred income taxes              1,441       1,295            4,911
Prepaid expenses and other current 10,481      11,433           10,706
assets
Total current assets               124,604     129,676          89,051
Property and equipment, net        61,611      59,040           44,441
Other assets                       877         944              449
                                  $187,092  $189,660       $133,941
Liabilities and Shareholders'                                 
Equity (Deficit)
Current liabilities:                                          
Line of credit                     $ —         $ —              $ —
Current portion of notes payable   15,000      15,000           —
Accounts payable                   27,971      27,952           22,496
Income taxes payable               558         7,083            1,019
Accrued salaries and wages         2,725       4,204            1,436
Other accrued expenses             13,569      14,545           11,235
Total current liabilities          59,823      68,784           36,186
Notes payable                      19,500      19,500           250
Deferred rent and other            31,187      29,082           22,258
Deferred income taxes              1,431       1,550            5,708
Total liabilities                  111,941     118,916          64,402
                                                             
Preferred stock                    —           —                191,855
Shareholders' equity (deficit):                               
Common stock                       540         540              183
Additional paid-in capital         273,474     270,637          12,270
Accumulated deficit                (198,863)   (200,433)        (134,769)
Total shareholders' equity         75,151      70,744           (122,316)
(deficit)
                                  $187,092  $189,660       $133,941


FIVE BELOW, INC.
Balance Sheets
(Unaudited)
(in thousands)
                                                              
                                                   Thirteen Weeks Ended
                                                   May 4, 2013 April 28, 2012
Net sales                                           $95,604   $71,829
Cost of goods sold                                  65,391      48,809
Gross profit                                        30,213      23,020
Selling, general and administrative expenses        27,024      24,985
Operating income (loss)                             3,189       (1,965)
Interest expense (income), net                      511         (37)
Income (loss) before income taxes                   2,678       (1,928)
Income tax expense (benefit)                        1,108       (771)
Net income (loss)                                   1,570       (1,157)
Series A 8% Convertible Preferred Stock cumulative  —           (4,168
dividends
Net income attributable to participating securities (31)        —
Net income (loss) attributable to common            $1,539    $(5,325)
shareholders
Basic income (loss) per common share                $0.03     $(0.32)
Diluted income (loss) per common share              $0.03     $(0.32)
Weighted average shares outstanding:                           
Basic shares                                        52,943,243  16,420,716
Diluted shares                                      53,399,778  16,420,716


FIVE BELOW, INC.
Statements of Cash Flows
(Unaudited)
(in thousands)
                                                              
                                                   Thirteen Weeks Ended
                                                   May 4, 2013 April 28, 2012
Operating activities:                                          
Net income (loss)                                   $1,570    $(1,157)
Adjustments to reconcile net income (loss) to net              
cash used in operating activities:
Depreciation and amortization                       2,933       2,107
Amortization of deferred financing costs            78          7
Warrant expense related to professional service     —           43
providers for services rendered
Stock-based compensation expense                    2,359       6,330
Deferred income tax (benefit) expense               (265)       4,354
Changes in operating assets and liabilities:                   
Prepaid income taxes                                (585)       —
Income tax receivable                               —           (7,400)
Inventories                                         (14,508)    (12,741)
Prepaid expenses and other assets                   941         (3,621)
Accounts payable                                    703         (799)
Income taxes payable                                (6,525)     (8,120)
Accrued salaries and wages                          (1,479)     (7,818)
Deferred rent                                       2,405       1,555
Other accrued expenses                              602         3,562
Net cash used in operating activities               (11,771)    (23,698)
Investing activities:                                          
Capital expenditures                                (8,148)     (4,801)
Net cash used in investing activities               (8,148)     (4,801)
Financing activities:                                          
Proceeds from exercise of warrants and stock        158         201
options to purchase common stock
Repurchase of unvested restricted shares related to —           (17)
stock option exercises
Excess tax benefit related to restricted shares and 402         1,525
the exercise of stock options
Net cash provided by financing activities           560         1,709
Net decrease in cash and cash equivalents           (19,359)    (26,790)
Cash and cash equivalents at beginning of period    56,081      41,293
Cash and cash equivalents at end of period          $36,722   $14,503


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 (loss), as reported, to adjusted         
operating income
                                        Thirteen Weeks Ended
                                        May 4, 2013     April 28, 2012
Operating income (loss)                  $3,189        $(1,965)
Adjustments:                                            
Founders' transaction ^(1)               1,515           6,252
Adjusted operating income                $4,704        $4,287
                                                       
Reconciliation of net income (loss) attributable to common shareholders,    
as reported, to adjusted net income
                                        Thirteen Weeks Ended
                                        May 4, 2013     April 28, 2012
Net income (loss) attributable to common $1,539        $(5,325)
shareholders
Adjustments:                                            
Series A 8% Convertible Preferred Stock  —               4,168
("Preferred stock") cumulative dividends
Net income attributable to participating 31              —
securities
Net income (loss)                        1,570           (1,157)
Adjustments:                                            
Founders' transaction ^(1)               1,515           6,252
Less tax benefit                         (627)           (2,502)
Adjusted net income                      $2,458        $2,593
                                                       
Reconciliation of diluted weighted average shares outstanding, as           
reported, to adjusted diluted weighted average shares outstanding
                                        Thirteen Weeks Ended
                                        May 4, 2013     April 28, 2012
Diluted weighted average shares          53,399,778      16,420,716
outstanding
Adjustments:                                            
Preferred shares conversion              —               30,894,953
Initial public offering shares issuance  —               4,807,692
Unvested and vested restricted stock     1,056,704       1,867,755
^(2)
Diluted effect of stock options and      —               67,793
warrants ^(3)
Adjusted diluted weighted average shares 54,456,482      54,058,909
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
                                                         
                                          Thirteen Weeks Ended
                                          May 4, 2013     April 28, 2012
Diluted income (loss) per common           $0.03         $(0.32)
share, as reported
Adjustments to numerator:                                 
Series A 8% Convertible Preferred
Stock cumulative dividends per             —               0.25
share
Founders' transaction per share            0.03            0.38
^(1)
Income tax benefit per share               (0.01)          (0.15)
Adjustments to weighted average            —               (0.11)
shares outstanding per share
Adjusted diluted income per common         $0.05         $0.05
share
                                                         
(1) Founders' transaction relates to the on-going expense recognition for the
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.
(2) Assumes the impact of all unvested and vested restricted stock as of the
beginning of the period.
(3) 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
         joeh@gregoryfca.com
 
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