UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 17, 2016
THE CHILDREN’S PLACE, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
| 0-23071 | 31-1241495 | |
| (Commission File Number) | (IRS Employer Identification No.) |
| 500 Plaza Drive, Secaucus, New Jersey | 07094 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(201) 558-2400
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition. |
On November 17, 2016, the Company issued a press release containing the Company’s financial results for the third quarter of the fiscal year ending January 28, 2017 (“Fiscal 2016”), updating a previously announced estimated range of adjusted net income per diluted share for Fiscal 2016 and providing a preliminary estimated range of adjusted net income per diluted share for the fourth quarter of Fiscal 2016. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report is being furnished pursuant to Item 2.02 of Form 8-K insofar as it discloses historical information regarding the Company’s results of operations and financial condition as of and for the third quarter of Fiscal 2016. In accordance with General Instructions B.2 of Form 8-K, such information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 8.01 | Other Events. |
On November 17, 2016, the Company issued a press release announcing that its Board of Directors has declared a quarterly cash dividend, payable on January 5, 2017 to holders of record of the Company’s common stock on December 16, 2016. A copy of the press release is being furnished as Exhibit 99.2 to this Current Report on Form 8-K.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
Exhibit 99.1 Press Release, dated November 17, 2016, issued by the Company regarding the Company’s financial results for the third quarter of Fiscal 2016 (Exhibit 99.1 is furnished as part of this Current Report on Form 8-K).
Exhibit 99.2 Press Release, dated November 17, 2016, issued by the Company regarding the declaration of a dividend (Exhibit 99.2 is furnished as part of this Current Report on Form 8-K).
2
Forward Looking Statements
This Current Report on Form 8-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives and adjusted net income per diluted share. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. These forward-looking statements are based upon the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially. Some of these risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission, including in the “Risk Factors” section of its Annual Report on Form 10-K for the fiscal year ended January 30, 2016. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, the risks resulting from the highly competitive nature of the Company’s business and its dependence on consumer spending patterns, which may be affected by weakness in the economy that continues to affect the Company’s target customer or by other factors such as an increase in the cost of food, the risk that the Company’s strategic initiatives to increase sales and margin are delayed or do not result in anticipated improvements, the risk of delays, interruptions and disruptions in the Company’s global supply chain, including resulting from foreign sources of supply in less developed countries or politically unstable countries, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, and the uncertainty of weather patterns. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
* * *
3
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 17, 2016
| THE CHILDREN’S PLACE, INC. | |||
| By: | /s/ Jane Elfers | ||
| Name: | Jane Elfers | ||
| Title: | President and Chief Executive Officer | ||
4
Exhibit 99.1
THE CHILDREN’S PLACE REPORTS THIRD QUARTER 2016 RESULTS
Delivers Q3 Comparable Retail Sales Increase of 4.6%
Reports Q3 GAAP Earnings per Diluted Share of $2.36, a 26% Increase vs Q3 2015 and
Q3 Adjusted Earnings per Diluted Share of $2.29, a 19% Increase vs Q3 2015
Increases Fiscal 2016 Adjusted EPS Guidance to $5.00 to $5.05 vs Previous Guidance of $4.60 to $4.70
Returns $123 Million to Shareholders Year to Date, a 37% Increase Compared to LY
Secaucus, New Jersey – November 17, 2016 – The Children’s Place, Inc. (Nasdaq: PLCE), the largest pure-play children’s specialty apparel retailer in North America, today announced financial results for the thirteen weeks ended October 29, 2016.
Jane Elfers, President and Chief Executive Officer, said, “We delivered another outstanding quarter, with EPS significantly above the high end of our guidance range. Comparable retail sales increased 4.6%. Comps were positive in all three months and accelerated as the quarter progressed. Inventory decreased 0.6% and is in excellent shape as we enter the fourth quarter. Based on these results, we are raising our adjusted EPS guidance for the full year to $5.00 to $5.05 per share compared to our previous guidance of $4.60 to $4.70 per share.”
Ms. Elfers continued, “Our number one priority is the creation of shareholder value. Our results are indicative of the impressive progress we have made against each of our strategic growth initiatives - superior product, business transformation through technology, global growth through alternate channels of distribution and fleet optimization - all of which are supported by a best-in-class management team. We look forward to continued momentum in our business for the fourth quarter and beyond. ”
Financial Results
The Company’s results are reported in this press release on a GAAP and as adjusted, non-GAAP basis. A reconciliation of non-GAAP to GAAP financial information is provided at the end of this press release.
Third Quarter 2016 Results
Net sales increased 3.9% to $473.8 million in the third quarter of 2016. Comparable retail sales increased 4.6% in the third quarter of 2016.
Net income was $44.2 million, or $2.36 per diluted share, in the third quarter of 2016, compared to net income of $38.5 million, or $1.88 per diluted share, the previous year. Adjusted net income was $42.8 million, or $2.29 per diluted share, compared to adjusted net income of $39.6 million, or $1.93 per diluted share, in the third quarter last year. There was no impact on adjusted net income per diluted share in the quarter from currency exchange rate fluctuations.
Gross profit was $194.5 million in the third quarter, compared to $180.5 million in the third quarter of 2015. Adjusted gross profit was $194.4 million in the third quarter, compared to $180.6 million last year, and leveraged 140 basis points to 41.0% of sales primarily as a result of merchandise margin leverage and a higher AUR.
Selling, general and administrative expenses were $115.4 million compared to $105.8 million in the third quarter of 2015. Adjusted SG&A was $115.4 million compared to $105.0 million in the third quarter last year and deleveraged 140 basis points as a percentage of sales primarily as a result of increased incentive compensation expenses which were partially offset by decreased store and administrative expenses.
Operating income was $62.1 million, compared to $57.6 million in the third quarter of 2015. Adjusted operating income in the third quarter of 2016 was $62.4 million compared to an adjusted operating income of $59.5 million in the third quarter last year, and leveraged 10 basis points compared to last year.
For the third quarter, the Company’s adjusted results exclude net income of approximately $1.4 million, compared to excluded charges of approximately $1.1 million in the third quarter of 2015, comprising certain items which the Company believes are not reflective of the performance of its core business. These excluded items are primarily related to income due to the release of reserves for prior year uncertain tax positions offset by asset impairment charges in the third quarter of 2016, and asset impairment charges and restructuring costs in the third quarter of 2015.
Fiscal Year to Date
Net sales increased 3.0% to $1,265 million, including the negative impact of approximately $3.7 million from currency exchange rate fluctuations. On a constant currency basis, net sales were $1,268 million, a 3.3% increase compared to net sales of $1,227 million in the prior year. Comparable retail sales increased 4.1% in the first nine months of fiscal 2016.
Net income was $68.1 million, or $3.56 per diluted share, in the first nine months of fiscal 2016, compared to net income of $40.4 million, or $1.94 per diluted share, the previous year. Adjusted net income was $68.4 million, or $3.57 per diluted share, inclusive of a negative ($0.03) impact due to foreign exchange, compared to $50.5 million, or $2.42 per diluted share, an increase of 48%, compared to the previous year. On a constant currency basis, adjusted net income per diluted share was $3.60, a 49% increase compared to the previous year.
Gross profit was $483.7 million in the first nine months of fiscal 2016, compared to $447.6 million last year. Adjusted gross profit was $483.6 million, or 38.2% of net sales, leveraging 170 basis points compared to last year.
Selling, general and administrative expenses in the first nine months of fiscal 2016 were $332.6 million, compared to $338.7 million last year. Adjusted SG&A was $332.9 million, compared to $324.9 million last year, leveraging 20 basis points compared to last year.
Operating income was $98.8 million, compared to operating income of $60.7 million in the first nine months of fiscal 2015. Adjusted operating income was $101.7 million, or 8.0% of net sales, compared to $77.4 million, or 6.3% of net sales last year.
For the first nine months, the Company’s adjusted results exclude net charges of approximately $0.2 million, compared to excluded charges of approximately $10.1 million in the first nine months of 2015, comprising certain items which the Company believes are not reflective of the performance of its core business. These excluded charges are primarily related to asset impairment charges offset by income related to the release of reserves for prior year uncertain tax positions in the first nine months of 2016, and proxy and legal settlement costs, asset impairment charges and restructuring costs in the first nine months of 2015.
Store Openings and Closures
The Company closed 5 stores and opened 2 stores during the third quarter of 2016. The Company ended the third quarter with 1,061 stores and square footage of 4.961 million, a decrease of 2.0% compared to the prior year. The Company’s international franchise partners opened 16 points of distribution in the third quarter, and the Company ended the quarter with 139 international points of distribution open and operated by its 6 franchise partners in 17 countries.
Capital Return Program
During the third quarter of 2016, the Company returned approximately $37 million to shareholders through the repurchase of 416,865 shares and its quarterly dividend payment of $0.20 per share. Year to date, the Company returned approximately $123 million to shareholders compared to approximately $90 million last year. Since 2009, the Company has returned over $747 million to its investors through share repurchases and dividends. At the end of the third quarter, approximately $159 million remained available for future share repurchases under the Company’s existing share repurchase program.
Additionally, the Company’s Board of Directors authorized a quarterly dividend of $0.20 per share, payable on January 5, 2017 to shareholders of record at the close of business on December 17, 2016.
Outlook
The Company is updating its outlook for fiscal 2016 and now expects adjusted net income per diluted share to be in the range of $5.00 to $5.05, inclusive of a ($0.03) negative impact from foreign exchange. This compares to the Company’s previous guidance for adjusted net income per diluted share of $4.60 to $4.70 and to adjusted net income per diluted share of $3.60 in fiscal 2015. This guidance assumes a positive low single digit increase in comparable retail sales for the year. This guidance for adjusted net income per diluted share excludes year to date net charges of approximately $0.2 million primarily related to asset impairment charges and income related to the release of reserves for prior year uncertain tax positions that the Company believes are not reflective of the performance of its core business.
The Company expects adjusted net income per diluted share in the fourth quarter of 2016 to be between $1.43 and $1.48. The Company expects no impact on adjusted net income per diluted share in the quarter from currency exchange rate fluctuations. This compares to adjusted net income per diluted share of $1.19 in the fourth quarter of 2015. This guidance assumes a positive low single digit increase in comparable retail sales for the quarter.
Financial Results
The Company’s results are reported in this press release on a GAAP and as adjusted, non-GAAP basis. Adjusted net income, adjusted net income per diluted share, adjusted gross profit, adjusted SG&A, and adjusted operating income are non-GAAP measures, and are not intended to replace GAAP financial information and may be different from non-GAAP measures reported by other companies. The Company believes the items excluded as non-GAAP adjustments are not reflective of the performance of its core business and that providing this supplemental disclosure to investors will facilitate comparisons of the past and present performance of its core business. The Company uses non-GAAP measures to evaluate and measure operating performance, including, as previously disclosed, to measure performance for purposes of the Company’s annual bonus and long-term incentive compensation plans. A reconciliation of non-GAAP to GAAP financial information is provided at the end of this press release.
Conference Call Information
The Children’s Place will host a conference call to discuss its third quarter 2016 results today at 8:00 a.m. Eastern Time. The call will be broadcast live at http://investor.childrensplace.com. An audio archive will be available on the Company’s website approximately one hour after the conclusion of the call.
About The Children’s Place, Inc.
The Children’s Place is the largest pure-play children’s specialty apparel retailer in North America. The Company designs, contracts to manufacture, sells at retail and wholesale, and licenses to sell fashionable, high-quality merchandise at value prices, primarily under the proprietary “The Children’s Place,” “Place” and “Baby Place” brand names. As of October 29, 2016, the Company operated 1,061 stores in the United States, Canada and Puerto Rico, an online store at www.childrensplace.com, and had 139 international points of distribution open and operated by its 6 franchise partners in 17 countries.
Forward Looking Statement
This press release contains, and the above referenced conference call may contain, forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives and adjusted net income per diluted share. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. These forward-looking statements are based upon the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially. Some of these risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission, including in the “Risk Factors” section of its Annual Report on Form 10-K for the fiscal year ended January 30, 2016. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, the risks resulting from the highly competitive nature of the Company’s business and its dependence on consumer spending patterns, which may be affected by weakness in the economy that continues to affect the Company’s target customer, the risk that the Company’s strategic initiatives to increase sales and margin are delayed or do not result in anticipated improvements, the risk of delays, interruptions and disruptions in the Company’s global supply chain, including resulting from foreign sources of supply in less developed countries or more politically unstable countries, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, and the uncertainty of weather patterns. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Contact: Robert Vill, Group Vice President, Finance, (201) 453-6693
(Tables Follow)
THE CHILDREN’S PLACE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| Third Quarter Ended | Year-to-Date Ended | |||||||||||||||
| October 29, | October 31, | October 29, | October 31, | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net sales | $ | 473,777 | $ | 455,913 | $ | 1,264,544 | $ | 1,227,233 | ||||||||
| Cost of sales | 279,260 | 275,400 | 780,805 | 779,607 | ||||||||||||
| Gross profit | 194,517 | 180,513 | 483,739 | 447,626 | ||||||||||||
| Selling, general and administrative expenses | 115,442 | 105,797 | 332,557 | 338,653 | ||||||||||||
| Asset impairment charges | 392 | 919 | 3,218 | 2,371 | ||||||||||||
| Other costs | 17 | 14 | 276 | 87 | ||||||||||||
| Depreciation and amortization | 16,586 | 16,136 | 48,938 | 45,782 | ||||||||||||
| Operating income | 62,080 | 57,647 | 98,750 | 60,733 | ||||||||||||
| Interest expense, net | (158 | ) | (254 | ) | (408 | ) | (635 | ) | ||||||||
| Income before taxes | 61,922 | 57,393 | 98,342 | 60,098 | ||||||||||||
| Provision for income taxes | 17,756 | 18,898 | 30,202 | 19,687 | ||||||||||||
| Net income | $ | 44,166 | $ | 38,495 | $ | 68,140 | $ | 40,411 | ||||||||
| Earnings per common share | ||||||||||||||||
| Basic | $ | 2.41 | $ | 1.90 | $ | 3.63 | $ | 1.96 | ||||||||
| Diluted | $ | 2.36 | $ | 1.88 | $ | 3.56 | $ | 1.94 | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 18,342 | 20,297 | 18,785 | 20,628 | ||||||||||||
| Diluted | 18,703 | 20,517 | 19,139 | 20,878 | ||||||||||||
THE CHILDREN’S PLACE, INC.
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP
(In thousands, except per share amounts)
(Unaudited)
| Third Quarter Ended | Year-to-Date Ended | |||||||||||||||
| October 29, | October 31, | October 29, | October 31, | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net income | $ | 44,166 | $ | 38,495 | $ | 68,140 | $ | 40,411 | ||||||||
| Non-GAAP adjustments: | ||||||||||||||||
| Asset impairment charges | 392 | 919 | 3,218 | 2,371 | ||||||||||||
| Restructuring costs | (56 | ) | 919 | (527 | ) | 2,044 | ||||||||||
| Proxy costs | - | 10 | 12 | 5,773 | ||||||||||||
| Legal Settlement | - | - | - | 5,000 | ||||||||||||
| Sales tax audit | - | - | - | 1,350 | ||||||||||||
| DC exit costs | 17 | 14 | 276 | 87 | ||||||||||||
| Aggregate impact of Non-GAAP adjustments | 353 | 1,862 | 2,979 | 16,625 | ||||||||||||
| Income tax effect (1) | (141 | ) | (745 | ) | (1,153 | ) | (6,520 | ) | ||||||||
| Prior year uncertain tax positions (2) | (1,580 | ) | - | (1,580 | ) | - | ||||||||||
| Net impact of Non-GAAP adjustments | (1,368 | ) | 1,117 | 246 | 10,105 | |||||||||||
| Adjusted net income | $ | 42,798 | $ | 39,612 | $ | 68,386 | $ | 50,516 | ||||||||
| GAAP net income per common share | $ | 2.36 | $ | 1.88 | $ | 3.56 | $ | 1.94 | ||||||||
| Adjusted net income per common share | $ | 2.29 | $ | 1.93 | $ | 3.57 | $ | 2.42 | ||||||||
| (1) | The tax effects of the non-GAAP items are calculated based on the statutory rate of the jurisdiction in which the discrete item resides. |
| (2) | Prior year tax provision related to uncertain tax positions. |
| Third Quarter Ended | Year-to-Date Ended | |||||||||||||||
| October 29, | October 31, | October 29, | October 31, | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Operating income | $ | 62,080 | $ | 57,647 | $ | 98,750 | $ | 60,733 | ||||||||
| Non-GAAP adjustments: | ||||||||||||||||
| Asset impairment charges | 392 | 919 | 3,218 | 2,371 | ||||||||||||
| Restructuring costs | (56 | ) | 919 | (527 | ) | 2,044 | ||||||||||
| Proxy costs | - | 10 | 12 | 5,773 | ||||||||||||
| Legal Settlement | - | - | - | 5,000 | ||||||||||||
| Sales tax audit | - | - | - | 1,350 | ||||||||||||
| DC exit costs | 17 | 14 | 276 | 87 | ||||||||||||
| Aggregate impact of Non-GAAP adjustments | 353 | 1,862 | 2,979 | 16,625 | ||||||||||||
| Adjusted operating income | $ | 62,433 | $ | 59,509 | $ | 101,729 | $ | 77,358 | ||||||||
THE CHILDREN’S PLACE, INC.
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP
(In thousands, except per share amounts)
(Unaudited)
| Third Quarter Ended | Year-to-Date Ended | |||||||||||||||
| October 29, | October 31, | October 29, | October 31, | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Gross Profit | $ | 194,517 | $ | 180,513 | $ | 483,739 | $ | 447,626 | ||||||||
| Non-GAAP adjustments: | ||||||||||||||||
| Restructuring costs | (75 | ) | 102 | (125 | ) | 406 | ||||||||||
| Aggregate impact of Non-GAAP adjustments | (75 | ) | 102 | (125 | ) | 406 | ||||||||||
| Adjusted Gross Profit | $ | 194,442 | $ | 180,615 | $ | 483,614 | $ | 448,032 | ||||||||
| Third Quarter Ended | Year-to-Date Ended | |||||||||||||||
| October 29, | October 31, | October 29, | October 31, | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Selling, general and administrative expenses | $ | 115,442 | $ | 105,797 | $ | 332,557 | $ | 338,653 | ||||||||
| Non-GAAP adjustments: | ||||||||||||||||
| Restructuring costs | (19 | ) | (817 | ) | 402 | (1,638 | ) | |||||||||
| Proxy costs | - | (10 | ) | (12 | ) | (5,773 | ) | |||||||||
| Legal Settlement | - | - | - | (5,000 | ) | |||||||||||
| Sales tax audit | - | - | - | (1,350 | ) | |||||||||||
| Aggregate impact of Non-GAAP adjustments | (19 | ) | (827 | ) | 390 | (13,761 | ) | |||||||||
| Adjusted Selling, general and administrative expenses | $ | 115,423 | $ | 104,970 | $ | 332,947 | $ | 324,892 | ||||||||
THE CHILDREN’S PLACE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| October 29, | January 30, | October 31, | ||||||||||
| 2016 | 2016* | 2015 | ||||||||||
| Assets: | ||||||||||||
| Cash and cash equivalents | $ | 192,243 | $ | 187,534 | $ | 183,923 | ||||||
| Short-term investments | 75,100 | 40,100 | 34,600 | |||||||||
| Accounts receivable | 30,605 | 26,315 | 36,501 | |||||||||
| Inventories | 325,463 | 268,831 | 327,324 | |||||||||
| Other current assets | 53,132 | 58,528 | 52,106 | |||||||||
| Total current assets | 676,543 | 581,308 | 634,454 | |||||||||
| Property and equipment, net | 274,747 | 290,980 | 302,216 | |||||||||
| Other assets, net | 31,992 | 25,660 | 40,688 | |||||||||
| Total assets | $ | 983,282 | $ | 897,948 | $ | 977,358 | ||||||
| Liabilities and Stockholders' Equity: | ||||||||||||
| Revolving loan | $ | 65,600 | $ | - | $ | 34,351 | ||||||
| Accounts payable | 189,390 | 154,541 | 183,738 | |||||||||
| Accrued expenses and other current liabilities | 146,127 | 120,481 | 115,615 | |||||||||
| Total current liabilities | 401,117 | 275,022 | 333,704 | |||||||||
| Other liabilities | 87,850 | 95,133 | 94,127 | |||||||||
| Total liabilities | 488,967 | 370,155 | 427,831 | |||||||||
| Stockholders' equity | 494,315 | 527,793 | 549,527 | |||||||||
| Total liabilities and stockholders' equity | $ | 983,282 | $ | 897,948 | $ | 977,358 | ||||||
| * | Derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended January 30, 2016. |
THE CHILDREN’S PLACE, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(In thousands)
(Unaudited)
| 39 Weeks Ended | ||||||||
| October 29, | October 31, | |||||||
| 2016 | 2015 | |||||||
| Net income | $ | 68,140 | $ | 40,411 | ||||
| Non-cash adjustments | 55,267 | 48,497 | ||||||
| Working Capital | 2,143 | (3,847 | ) | |||||
| Net cash provided by operating activities | 125,550 | 85,061 | ||||||
| Net cash used in investing activities | (61,753 | ) | (16,932 | ) | ||||
| Net cash used in financing activities | (62,088 | ) | (56,338 | ) | ||||
| Effect of exchange rate changes on cash | 3,000 | (1,159 | ) | |||||
| Net increase in cash and cash equivalents | 4,709 | 10,632 | ||||||
| Cash and cash equivalents, beginning of period | 187,534 | 173,291 | ||||||
| Cash and cash equivalents, end of period | $ | 192,243 | $ | 183,923 | ||||
###
Exhibit 99.2
THE CHILDREN’S PLACE CONTINUES
CAPITAL RETURN PROGRAM,
DECLARES QUARTERLY DIVIDEND
Company Has Returned Over $747 Million to Shareholders Since 2009
Secaucus, New Jersey – November 17, 2016 – The Children’s Place, Inc. (Nasdaq: PLCE), the largest pure-play children’s specialty apparel retailer in North America, today announced that its Board of Directors has declared a quarterly dividend.
Jane Elfers, President and Chief Executive Officer, commented, “We delivered another outstanding quarter and the continuation of our quarterly dividend is a further reflection of our confidence in our ability to execute on our strategic initiatives and our continuing commitment to return excess capital to shareholders. The Children’s Place has a profitable business model which generates strong cash flow. Since 2009, we have returned over $747 million to shareholders through dividends and share repurchases.”
The Board declared a quarterly cash dividend of $0.20 per share to be paid January 5, 2017 to shareholders of record at the close of business on December 17, 2016. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Company’s Board of Directors based on a number of factors, including business and market conditions, the Company’s future financial performance and other investment priorities.
About The Children’s Place, Inc.
The Children’s Place is the largest pure-play children’s specialty apparel retailer in North America. The Company designs, contracts to manufacture, sells at retail and wholesale, and licenses to sell fashionable, high-quality merchandise at value prices, primarily under the proprietary “The Children’s Place,” “Place” and “Baby Place” brand names. As of October 29, 2016, the Company operated 1,061 stores in the United States, Canada and Puerto Rico, an online store at www.childrensplace.com, and had 139 international points of distribution open and operated by its 6 franchise partners in 17 countries.
Forward Looking Statements
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives and adjusted net income per diluted share. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. These forward-looking statements are based upon the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially. Some of these risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission, including in the “Risk Factors” section of its Annual Report on Form 10-K for the fiscal year ended January 30, 2016. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, the risks resulting from the highly competitive nature of the Company’s business and its dependence on consumer spending patterns, which may be affected by weakness in the economy that continues to affect the Company’s target customer, the risk that the Company’s strategic initiatives to increase sales and margin are delayed or do not result in anticipated improvements, the risk of delays, interruptions and disruptions in the Company’s global supply chain, including resulting from foreign sources of supply in less developed countries or more politically unstable countries, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, and the uncertainty of weather patterns. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Contact: Robert Vill, Group Vice President, Finance, (201) 453-6693