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Delaware | 000-21915 | 82-0419266 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
One Coldwater Creek Drive, Sandpoint, Idaho | 83864 | |
(Address of principal executive offices) | (Zip Code) |
Exhibit Number | Description | |
99.1 | Coldwater Creek Inc. Press Release dated March 13, 2013 |
/s/ James A. Bell | |
James A. Bell | |
Executive Vice President, Chief Operating Officer | |
and Chief Financial Officer |
Exhibit Number | Description | |
99.1 | Coldwater Creek Inc. Press Release dated March 13, 2013 |
• | Fourth quarter 2012 comparable premium retail store sales increased 2.7 percent, on a 13-week basis |
• | Fourth quarter 2012 direct sales increased 7.7 percent |
• | Fourth quarter 2012 adjusted net loss per share of $0.65, excluding gain on derivative liability and CEO transition costs |
• | The Company's fiscal 2012 is a 53-week year with the additional week falling in the fourth quarter compared to the traditional 52 weeks in fiscal 2011. Comparable premium retail store sales for the fourth quarter and full year of fiscal 2012 are presented on a 13-week and 52-week basis and exclude the additional week. The additional week in fourth quarter fiscal 2012 represented a loss of $0.13 per share; |
• | The fourth quarter of fiscal 2012 included a charge, net of tax, of $0.06 per share associated with the Company's CEO transition; |
• | Due to the change in the fair value of the derivative liability related to the Series A Preferred Stock, the Company recorded a gain of $0.05 per share in the fourth quarter of fiscal 2012, and a loss of $0.10 per share for the full year fiscal 2012; |
• | During the fourth quarter of fiscal 2011, the Company recorded a favorable cumulative one-time adjustment for gift card breakage that represented $11.8 million, or $0.39 per share, in the fourth quarter 2011 and $0.47 per share in fiscal year 2011. In addition, the Company recorded a non-cash store impairment charge of $0.08 per share in the fourth quarter of fiscal 2011 and $0.21 per share in fiscal year 2011. |
• | Consolidated net sales were $220.8 million, compared with $224.4 million in fourth quarter 2011, which included net sales of $11.8 million as a result of a favorable cumulative one-time adjustment for gift card breakage income. Net sales from the retail segment were $166.0 million, compared with $173.5 million in the same period last year. Comparable premium retail store sales increased 2.7 percent. Net sales decreased due to store closures as a result of our store optimization program and the impact of $10.7 million in net sales from the cumulative one-time gift card breakage recorded in the fourth quarter 2011. Net sales from the direct segment were $54.7 million compared with $50.8 million in the same period last year, which included $1.1 million from the cumulative one-time adjustment for gift card breakage. |
• | Consolidated gross profit was $64.1 million, or 29.1 percent of net sales, compared with $73.1 million, or 32.6 percent of net sales, for fourth quarter 2011. The 350 basis point decline in gross profit margin was primarily due to the 370 basis point benefit in the fourth quarter of fiscal 2011 resulting from the cumulative one-time adjustment for gift card breakage. Adjusting for this benefit, gross margin increased 20 basis points driven by leverage of buying and occupancy costs offset by lower merchandise margins. |
• | Selling, general and administrative expenses (SG&A) were $82.5 million, or 37.4 percent of net sales, compared with $81.8 million, or 36.5 percent of net sales, for fourth quarter 2011. The increase in SG&A expense was driven by a $2.1 million pre-tax charge related to the CEO transition in the 2012 period offset by lower marketing expenses. |
• | Net loss was $20.0 million, or $0.66 per share, and included: (i) other gain, net, of $1.5 million, or $0.05 per share, due to the change in the fair value of the derivative liability related to the Series A Preferred Stock issued in July 2012; (ii) net loss of $4.0 million, or $0.13 per share, incurred in the additional week in the fourth quarter fiscal 2012; and (iii) a charge, net of tax, of $1.7 million, or $0.06 per share associated with the Company's CEO transition. This compares to a net loss of $12.8 million, or $0.42 per share, for fourth quarter 2011 and included: (i) $11.8 million, or $0.39 per share, benefit due to the cumulative one-time adjustment related to gift card breakage; and (ii) a non-cash asset impairment charge of $2.3 million, or $0.08 per share, related primarily to under-performing stores. |
• | Adjusted net loss, which excludes the gain on the derivative liability and the CEO transition expense for fourth quarter 2012, was $19.8 million, or $0.65 per share. This compares to adjusted net loss of $22.3 million, or $0.73 per share, excluding the cumulative one-time adjustment related to gift card breakage income and the non-cash store impairment charge for fourth quarter 2011. (Please see the table entitled “GAAP to Non-GAAP Reconciliation of Selected Measures” at the end of this press release.) |
• | Consolidated net sales for fiscal 2012 were $742.5 million, compared with $773.0 million in fiscal 2011. Net sales from the retail segment were $574.4 million, compared with $595.2 million last fiscal year. Comparable premium retail store sales increased 0.8 percent. Net sales from the direct segment were $168.0 million, compared with $177.8 million last fiscal year. |
• | Consolidated gross profit increased $3.8 million to $233.1 million, or 31.4 percent of net sales, compared with $229.3 million, or 29.7 percent of net sales, for fiscal 2011. The 170 basis point increase in gross profit margin was primarily due to increased leverage of buying and occupancy costs and higher merchandise margins reflecting improved product performance. Last year's gross margin included a 110 basis point benefit in the fourth quarter of fiscal 2011 from the cumulative one-time adjustment for gift card breakage income. |
• | Selling, general and administrative expenses (SG&A) were $301.8 million, or 40.6 percent of net sales, compared with $319.8 million, or 41.4 percent of net sales, for fiscal 2011. The $18.0 million decline in SG&A was due primarily to lower marketing expense compared to last fiscal year. |
• | Net loss was $81.8 million, or $2.69 per share, on 30.5 million weighted average shares outstanding, and included (i) other loss, net, of $2.9 million, or $0.10 per share, related to the Series A Preferred Stock issued in July 2012; (ii) net loss of $4.0 million, or $0.13 per share, incurred in the additional week in the fourth quarter fiscal 2012; and (iii) a charge, net of tax, of $1.7 million, or $0.06 per share, associated with the Company's CEO transition. This compares to a net loss of $99.7 million, or $3.98 per share on 25.1 million weighted average shares outstanding, for fiscal 2011 and included: (i) $11.8 million, or $0.47 per share, due to the cumulative one-time adjustment related to gift card breakage income; and (ii) a non-cash asset impairment charge of $5.2 million, or $0.21 per share, related to certain retail store assets. |
• | Adjusted net loss for fiscal 2012, which excludes the loss on the derivative liability and the CEO transition expense, was $77.2 million, or $2.53 per share, on 30.5 million weighted average shares outstanding. This compares to adjusted net loss of $106.2 million, or $4.24 per share, on 25.1 million weighted average shares outstanding for fiscal 2011 which excludes the cumulative one-time adjustment related to gift card breakage income for fiscal 2011 and the non-cash store impairment charge. (Please see the table entitled “GAAP to Non-GAAP Reconciliation of Selected Measures” at the end of this press release.) |
• | Comparable premium retail store sales to be down in the low single digits. |
• | Gross margin improvement of 100 to 200 basis points. |
• | Net loss per share in the range of $0.60-$0.80, excluding the impact of the change in the fair value of the derivative liability. |
• | Total inventory at the end of the quarter to be down in the low single digits as compared to the first quarter of fiscal 2012. |
• | the inherent difficulty in forecasting consumer buying and retail traffic patterns and trends, which continue to be erratic and are affected by factors beyond our control, such as significant weather events, current macroeconomic conditions, high unemployment, continuing heavy promotional activity in the specialty retail marketplace, and competitive conditions and the possibility that because of lower than expected customer response, or because of competitive pricing pressures, we may be required to sell merchandise at lower than expected margins, or at a loss; |
• | potential inability to attract and retain key personnel; |
• | our new design aesthetic may take longer to implement than expected or may not resonate with our customers; |
• | difficulties in forecasting consumer demand for our merchandise as a result of changing fashion trends and consumer preferences; |
• | changing business and economic conditions resulting in our inability to realize our sales and earnings expectations; |
• | our potential inability to recover the substantial fixed costs of our retail store base due to sluggish sales, which may result in impairment charges; |
• | our potential inability to maintain compliance with debt covenants; |
• | delays we may encounter in sourcing merchandise from our foreign and domestic vendors, including the possibility our vendors may not extend us credit on acceptable terms, and the potential inability of our vendors to finance production of the goods we order or meet our production needs due to raw material or labor shortages; |
• | our foreign sourcing strategy may not lead to reduction of our sourcing costs or improvement in our margins; |
• | increasing competition from discount retailers and companies that have introduced concepts or products similar to ours; |
• | marketing initiatives may not be successful in improving the breadth of our customer base, or increasing traffic in the near term, or at all; |
• | difficulties encountered in anticipating and managing customer returns and the possibility that customer returns may be greater than expected; |
• | the inherent difficulties in catalog management, for which we incur substantial costs prior to mailing that we may not be able to recover, and the possibility of unanticipated increases in mailing and printing costs; |
• | unexpected costs or problems associated with our efforts to manage the complexities of our multi-channel business model, including our efforts to maintain our information systems; |
• | our revolving line of credit may not be fully available due to borrowing base and other limitations; |
• | the benefits expected from our merchandising and design initiatives may not be achieved or may take longer to achieve than we expect; |
• | the actual number and timing of planned store closures depends on a number of factors that cannot be predicted, including among other things the future performance of our individual stores and negotiations with our landlords; |
Three Months Ended | Twelve Months Ended | ||||||||||||||
February 2, 2013 | January 28, 2012 | February 2, 2013 | January 28, 2012 | ||||||||||||
Net sales: | |||||||||||||||
Retail | $ | 166,039 | $ | 173,548 | $ | 574,425 | $ | 595,192 | |||||||
Direct | 54,735 | 50,804 | 168,047 | 177,829 | |||||||||||
220,774 | 224,352 | 742,472 | 773,021 | ||||||||||||
Cost of sales | 156,629 | 151,223 | 509,351 | 543,693 | |||||||||||
Gross profit | 64,145 | 73,129 | 233,121 | 229,328 | |||||||||||
Selling, general and administrative expenses | 82,507 | 81,804 | 301,806 | 319,812 | |||||||||||
Loss on asset impairments | — | 2,341 | — | 5,216 | |||||||||||
Loss from operations | (18,362 | ) | (11,016 | ) | (68,685 | ) | (95,700 | ) | |||||||
Other loss (gain), net | (1,494 | ) | — | 4,025 | — | ||||||||||
Interest expense, net | 3,737 | 755 | 9,596 | 2,275 | |||||||||||
Loss before income taxes | (20,605 | ) | (11,771 | ) | (82,306 | ) | (97,975 | ) | |||||||
Income tax provision (benefit) | (607 | ) | 1,058 | (464 | ) | 1,719 | |||||||||
Net loss | $ | (19,998 | ) | $ | (12,829 | ) | $ | (81,842 | ) | $ | (99,694 | ) | |||
Net loss per share — Basic and Diluted | $ | (0.66 | ) | $ | (0.42 | ) | $ | (2.69 | ) | $ | (3.98 | ) | |||
Weighted average shares outstanding — Basic and Diluted | 30,523 | 30,407 | 30,477 | 25,065 | |||||||||||
Supplemental Data: | |||||||||||||||
Catalogs mailed | 16,392 | 16,875 | 55,570 | 58,757 | |||||||||||
Premium retail stores: | |||||||||||||||
Opened | — | 2 | 1 | 5 | |||||||||||
Closed | 5 | 5 | 15 | 15 | |||||||||||
Count at end of the fiscal period | 349 | 363 | 349 | 363 | |||||||||||
Square footage | 1,998 | 2,165 | 1,998 | 2,165 | |||||||||||
Factory outlet stores: | |||||||||||||||
Opened | — | — | — | — | |||||||||||
Closed | — | 1 | — | 1 | |||||||||||
Count at end of the fiscal period | 38 | 38 | 38 | 38 | |||||||||||
Square footage | 255 | 259 | 255 | 259 | |||||||||||
Spas: | |||||||||||||||
Count at end of the fiscal period | 8 | 9 | 8 | 9 | |||||||||||
Square footage | 42 | 49 | 42 | 49 |
February 2, 2013 | January 28, 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 21,734 | $ | 51,365 | |||
Receivables | 5,150 | 8,199 | |||||
Inventories | 125,207 | 131,975 | |||||
Prepaid and other current assets | 17,072 | 9,410 | |||||
Deferred income taxes | 1,252 | 2,313 | |||||
Total current assets | 170,415 | 203,262 | |||||
Property and equipment, net | 169,007 | 206,079 | |||||
Deferred income taxes | 2,112 | 1,891 | |||||
Other assets | 4,374 | 1,883 | |||||
Total assets | $ | 345,908 | $ | 413,115 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 57,891 | $ | 55,130 | |||
Accrued liabilities | 87,915 | 78,175 | |||||
Current maturities of debt and capital lease obligations | 577 | 15,735 | |||||
Total current liabilities | 146,383 | 149,040 | |||||
Deferred rents | 82,726 | 101,384 | |||||
Long-term debt and capital lease obligations | 63,784 | 26,575 | |||||
Supplemental executive retirement plan | 10,994 | 12,142 | |||||
Deferred income taxes | 699 | 1,716 | |||||
Other liabilities | 4,186 | 5,845 | |||||
Total liabilities | 308,772 | 296,702 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.01 par value, 1,000 shares authorized; 1 and 0 shares issued, respectively | — | — | |||||
Common stock, $0.01 par value, 75,000 shares authorized; 30,531 and 30,417 shares issued, respectively | 305 | 304 | |||||
Additional paid-in capital | 153,146 | 151,254 | |||||
Accumulated other comprehensive loss | (1,532 | ) | (2,204 | ) | |||
Accumulated deficit | (114,783 | ) | (32,941 | ) | |||
Total stockholders’ equity | 37,136 | 116,413 | |||||
Total liabilities and stockholders’ equity | $ | 345,908 | $ | 413,115 |
Twelve Months Ended | |||||||||||
February 2, 2013 | January 28, 2012 | January 29, 2011 | |||||||||
Operating activities: | |||||||||||
Net loss | $ | (81,842 | ) | $ | (99,694 | ) | $ | (44,111 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 51,437 | 56,743 | 63,329 | ||||||||
Non-cash interest expense | 5,478 | — | — | ||||||||
Stock-based compensation expense | 2,001 | 2,403 | 2,476 | ||||||||
Supplemental executive retirement plan expense | 587 | 555 | 886 | ||||||||
Deferred income taxes | (585 | ) | (68 | ) | (1,200 | ) | |||||
Valuation allowance adjustments | (312 | ) | (839 | ) | (2,564 | ) | |||||
Deferred marketing fees and revenue sharing | (1,048 | ) | (1,509 | ) | (2,055 | ) | |||||
Deferred rents | (19,029 | ) | (15,948 | ) | (7,249 | ) | |||||
Loss on derivative liability | 2,939 | — | — | ||||||||
Series A Preferred Stock issuance costs | 1,086 | — | — | ||||||||
Net loss on asset dispositions and other termination charges | 2,295 | 197 | 447 | ||||||||
Loss on asset impairments | — | 5,216 | 3,931 | ||||||||
Other | 23 | 148 | (516 | ) | |||||||
Net change in operating assets and liabilities: | |||||||||||
Receivables | 2,337 | 2,212 | (3,584 | ) | |||||||
Inventories | 6,768 | 24,506 | 5,065 | ||||||||
Prepaid and other current assets | (8,007 | ) | 11,198 | 7,168 | |||||||
Accounts payable | 2,869 | (22,769 | ) | (21,776 | ) | ||||||
Accrued liabilities | (9,141 | ) | (6,575 | ) | (1,236 | ) | |||||
Net cash used in operating activities | (42,144 | ) | (44,224 | ) | (989 | ) | |||||
Investing activities: | |||||||||||
Purchase of property and equipment | (16,496 | ) | (8,895 | ) | (31,084 | ) | |||||
Proceeds from asset dispositions | 144 | 1,110 | 73 | ||||||||
Change in restricted cash | — | — | 890 | ||||||||
Net cash used in investing activities | (16,352 | ) | (7,785 | ) | (30,121 | ) | |||||
Financing activities: | |||||||||||
Net proceeds from stock offering | — | 22,945 | — | ||||||||
Borrowings on revolving line of credit | 10,000 | 15,000 | — | ||||||||
Payments on revolving line of credit | (25,000 | ) | — | — | |||||||
Proceeds from the issuance of long-term debt | 65,000 | 15,000 | — | ||||||||
Payments of long-term debt and capital lease obligations | (15,444 | ) | (819 | ) | (2,762 | ) | |||||
Payment of debt and Series A Preferred Stock issuance costs | (5,895 | ) | (695 | ) | — | ||||||
Other | 204 | 330 | 835 | ||||||||
Net cash provided by (used in) financing activities | 28,865 | 51,761 | (1,927 | ) | |||||||
Net decrease in cash and cash equivalents | (29,631 | ) | (248 | ) | (33,037 | ) | |||||
Cash and cash equivalents, beginning | 51,365 | 51,613 | 84,650 | ||||||||
Cash and cash equivalents, ending | $ | 21,734 | $ | 51,365 | $ | 51,613 | |||||
Non-cash investing and financing activities: | |||||||||||
Property and equipment purchases not yet paid | $ | 390 | $ | 2,085 | $ | 540 | |||||
Capital lease asset additions and related obligations | $ | 25 | $ | 75 | $ | 1,947 | |||||
Supplemental cash flow data: | |||||||||||
Interest paid, net of amount capitalized | $ | 4,124 | $ | 2,231 | $ | 1,817 | |||||
Income taxes paid (refunded), net | $ | 3,460 | $ | (2,112 | ) | $ | (7,261 | ) |
Three Months Ended | Twelve Months Ended | ||||||||||||||
February 2, 2013 | January 28, 2012 | February 2, 2013 | January 28, 2012 | ||||||||||||
Net loss: | |||||||||||||||
GAAP basis | $ | (19,998 | ) | $ | (12,829 | ) | $ | (81,842 | ) | $ | (99,694 | ) | |||
Excluding: | |||||||||||||||
Loss (gain) on derivative liability | (1,494 | ) | — | 2,939 | — | ||||||||||
CEO transition costs | 1,687 | — | 1,687 | — | |||||||||||
Gift card breakage income | — | (11,765 | ) | — | (11,765 | ) | |||||||||
Loss on asset impairments | — | 2,341 | — | 5,216 | |||||||||||
Non-GAAP adjusted basis | $ | (19,805 | ) | $ | (22,253 | ) | $ | (77,216 | ) | $ | (106,243 | ) | |||
Net loss per share — Basic and Diluted: | |||||||||||||||
GAAP basis | $ | (0.66 | ) | $ | (0.42 | ) | $ | (2.69 | ) | $ | (3.98 | ) | |||
Excluding: | |||||||||||||||
Loss (gain) on derivative liability | (0.05 | ) | — | 0.10 | — | ||||||||||
CEO transition costs | 0.06 | — | 0.06 | — | |||||||||||
Gift card breakage income | — | (0.39 | ) | — | (0.47 | ) | |||||||||
Loss on asset impairments | — | 0.08 | — | 0.21 | |||||||||||
Non-GAAP adjusted basis | $ | (0.65 | ) | $ | (0.73 | ) | $ | (2.53 | ) | $ | (4.24 | ) |
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Coldwater Creek Inc's Definitive Proxy Statement (Form DEF 14A) filed after their 2013 10-K Annual Report includes:
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Coldwater Creek Inc provided additional information to their SEC Filing as exhibits
Ticker: CWTR
CIK: 1018005
Form Type: 10-K Annual Report
Accession Number: 0001018005-13-000010
Submitted to the SEC: Fri Mar 22 2013 3:03:12 PM EST
Accepted by the SEC: Fri Mar 22 2013
Period: Saturday, February 2, 2013
Industry: Retail Womens Clothing Stores