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Retail Ventures, Inc. Reports Second Quarter Operating Results
PR Newswire
Sep 10, 2009
COLUMBUS, Ohio, Sept. 10 /PRNewswire-FirstCall/ -- Retail Ventures, Inc. (NYSE: RVI) today announced its consolidated financial results for the second quarter ended August 1, 2009.
On April 21, 2009, Retail Ventures sold all of the outstanding capital stock of Filene's Basement to FB II Acquisition Corp., a newly formed entity owned by Buxbaum Holdings, Inc. On May 4, 2009, Filene's Basement filed for bankruptcy protection.
-- The loss from continuing operations for the quarter ended August 1, 2009
was $4.4 million on net sales of $369.5 million, compared to income from
continuing operations of $25.8 million on net sales of $357.2 million
for the quarter ended August 2, 2008. DSW same store sales decreased
2.9% during the second quarter of fiscal 2009 versus a decrease of 6.9%
last year.
-- Diluted loss per share from continuing operations attributable to Retail
Ventures, Inc. common shareholders was $0.15 for the quarter ended
August 1, 2009 compared with diluted earnings per share from continuing
operations attributable to Retail Ventures, Inc. common shareholders of
$0.45 per share last year.
The Company believes that the non-cash accounting charge associated with the change in fair value of derivative instruments is not directly related to its retail operations and is therefore providing supplemental adjusted results that exclude this item. This non-GAAP financial measure should facilitate analysis by investors and others who follow the Company's financial performance. A reconciliation of non-GAAP results follows:
Fiscal Quarter Ended
August 1, August 2,
2009 2008
(dollars in thousands)
Operating (loss) profit:
Non-GAAP operating profit $ 7,988 $ 17,679
Change in fair value of
derivatives (8,689) 16,733
GAAP operating (loss)
profit $ (701) $ 34,412
(Loss) income from continuing
operations attributable
to Retail Ventures, Inc.
common shareholders:
Non-GAAP income from
continuing operations $ 1,510 $ 5,135
Change in fair value
of derivatives (8,689) 16,733
GAAP (loss) income from
continuing operations,
net of tax $ (7,179) $ 21,868
Diluted (loss) income per
share from continuing
operations attributable to
Retail Ventures, Inc.
common shareholders:
Non-GAAP diluted income
per share $ 0.03 $ 0.11
Change in fair value of
derivatives (0.18) 0.34
GAAP diluted (loss) income
per share from continuing
operations $ (0.15) $ 0.45
Retail Ventures, Inc. is a leading off-price retailer operating, as of August 1, 2009, 306 DSW shoe stores in 39 states. DSW also supplies shoes, under supply arrangements, to 358 locations for other retailers in the United States and operates dsw.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Any statements in this release that are not historical or current facts are forward-looking statements. All forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that could cause our future financial performance in fiscal 2009 and beyond to differ materially from those expressed or implied in any such forward-looking statements. Certain of these risks and uncertainties are described in the "Risk Factors" section of the Company's latest quarterly or annual report, as filed with the SEC. These factors include, but are not limited to: our ability to manage and enhance liquidity; DSW's success in opening and operating new stores on a timely and profitable basis; continuation of DSW's supply agreements and the financial condition of its leased business partners; maintaining good relationships with our vendors; our ability to anticipate and respond to fashion trends; fluctuation of our comparable store sales and quarterly financial performance; the realization of our bankruptcy claims related to Filene's Basement and Value City Department Stores; the impact of the disposition of Filene's Basement and of a majority interest in Value City and the reliance on remaining subsidiaries to pay indebtedness and intercompany service obligations; the risk of Value City and Filene's Basement not paying us or their creditors, for which Retail Ventures may have some liability; the impact of Value City and Filene's Basement on our liquidity; disruption of our distribution operations; our dependence on DSW for key services; failure to retain our key executives or attract qualified new personnel; our competitiveness with respect to style, price, brand availability and customer service; declining general economic conditions; risks inherent to international trade with countries that are major manufacturers of footwear; the success of dsw.com; lease of an office facility; liquidity and investment risks related to our investments; and DSW's ability to secure additional credit upon the termination of its existing credit facility. Additional factors that could cause our actual results to differ materially from our expectations are described in the Company's latest annual or quarterly report, as filed with the SEC. Any forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to revise the forward-looking statements included in this press release to reflect any future events or circumstances.
RETAIL VENTURES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
August 1, January 31,
2009 2009
ASSETS
Cash and equivalents $ 58,972 $ 94,308
Restricted cash 261
Short-term investments, net 139,687 101,404
Accounts receivable, net 6,534 7,474
Inventories 264,295 244,008
Prepaid expenses and other
current assets 23,418 27,249
Deferred income taxes 26,598 22,243
Current assets held for sale 66,678
Total current assets 519,504 563,625
Property and equipment, net 223,187 236,355
Goodwill 25,899 25,899
Tradenames and other
intangibles, net 3,241 3,668
Conversion feature of
long-term debt 68,568 77,761
Deferred income taxes 805
Other assets 5,017 6,856
Non-current assets held
for sale 38,793
Total assets $ 845,416 $ 953,762
LIABILITIES AND SHAREHOLDERS'
EQUITY
Accounts payable $ 104,429 $ 96,213
Accrued expenses 78,340 77,064
Warrant liability 7,184 6,292
Current maturities of
long-term obligations 250
Current liabilities held
for sale 76,030
Total current liabilities 189,953 255,849
Long-term obligations, net
of current maturities 128,643 127,576
Other noncurrent
liabilities 117,994 109,290
Deferred income taxes 24,524 29,806
Noncurrent liabilities held
for sale 36,055
Total Retail Ventures'
shareholder's equity 204,392 222,614
Noncontrolling interests 179,910 172,572
Total shareholders' equity 384,302 395,186
Total liabilities and
shareholders' equity $ 845,416 $ 953,762
RETAIL VENTURES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
Three months Six months
ended ended
August 1, August 2, August 1, August 2,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $369,490 $357,175 $755,336 $723,439
Cost of sales (210,267) (198,515) (427,867) (409,613)
--------- --------- --------- ---------
Gross profit 159,223 158,660 327,469 313,826
Selling, general and
administrative expenses (151,235) (140,981) (366,169) (280,141)
Change in fair value of
derivative instruments (8,689) 16,733 (10,077) 53,901
------- ------ -------- ------
Operating (loss) profit (701) 34,412 (48,777) 87,586
Interest expense, net (2,433) (974) (5,177) (1,617)
Non-operating income, net 528 133
--- ---
(Loss) income from
continuing operations
before income taxes (2,606) 33,438 (53,821) 85,969
Income tax expense (1,763) (7,616) (2,429) (14,238)
------- ------- ------- --------
(Loss) income from
continuing operations (4,369) 25,822 (56,250) 71,731
Income (loss) from
discontinued operations,
net of tax 23,332 (4,134) 33,990 (17,086)
------ ------- ------ --------
Net income (loss) 18,963 21,688 (22,260) 54,645
Less: net income
attributable to the
noncontrolling interests (2,810) (3,954) (5,459) (7,760)
------- ------- ------- -------
Net income (loss)
attributable to Retail
Ventures, Inc. $16,153 $17,734 $(27,719) $46,885
------- ------- -------- -------
Basic and diluted earnings
(loss) per share:
Basic (loss) earnings
per share from
continuing operations
attributable to Retail
Ventures, Inc. common
shareholders $(0.15) $0.45 $(1.26) $1.31
Diluted (loss) earnings
per share from
continuing operations
attributable to Retail
Ventures, Inc. common
shareholders $(0.15) $0.45 $(1.26) $1.27
Basic earnings (loss)
per share from
discontinued operations
attributable to Retail
Ventures, Inc. common
shareholders $0.48 $(0.08) $0.70 $(0.35)
Diluted earnings (loss)
per share from
discontinued operations
attributable to Retail
Ventures, Inc. common
shareholders $0.48 $(0.08) $0.70 $(0.34)
Basic earnings (loss)
per share attributable
to Retail Ventures, Inc.
common shareholders $0.33 $0.36 $(0.57) $0.96
Diluted earnings (loss)
per share attributable
to Retail Ventures, Inc.
common shareholders $0.33 $0.36 $(0.57) $0.93
Shares used in per share
calculations:
Basic 48,934 48,675 48,813 48,657
Diluted 48,934 48,970 48,813 50,296
Amounts attributable to
Retail Ventures, Inc.
common shareholders:
(Loss) income from
continuing operations,
net of tax $(7,179) $21,868 $(61,709) $63,971
Discontinued operations,
net of tax 23,332 (4,134) 33,990 (17,086)
------ ------- ------ --------
Net income (loss) $16,153 $17,734 $(27,719) $46,885
------- ------- --------- -------
SOURCE Retail Ventures, Inc.
Copyright (2009) PR Newswire. All Rights Reserved.
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