SANDPOINT, Idaho, Nov. 22 /PRNewswire-FirstCall/ -- Coldwater Creek Inc.
(Nasdaq: CWTR) today reported financial results for the three and nine-month
periods ended October 29, 2005.
Consolidated Results
Net income for the three-month period ended October 29, 2005, increased
$3.4 million, or 37 percent, to $12.4 million, or $0.20 per diluted share,
compared with net income of $9.1 million, or $0.15 per diluted share, for the
three-month period ended October 30, 2004. Net sales in the fiscal 2005 third
quarter increased 26 percent to $190.1 million from $150.5 million in the
fiscal 2004 third quarter.
Net income for the nine-month period ended October 29, 2005, increased
$10.2 million, or 57 percent, to $27.9 million, or $0.44 per diluted share,
compared with net income of $17.7 million, or $0.30 per diluted share, for the
nine-month period ended October 30, 2004. Net sales in the first nine months
of fiscal 2005 increased 30 percent to $500.3 million from $386.2 million in
the same period a year ago.
"Better than anticipated sales activity in August and October resulted in
solid increases for both net sales and net income in the third quarter," said
Dennis Pence, chairman and chief executive officer for Coldwater Creek.
"Although the macroeconomic events surrounding Hurricane Katrina and its
aftermath negatively affected all of our selling channels in early September,
the impact was limited to the first three weeks of the month as sales activity
recovered by the fourth week of the month."
Gross profit for the fiscal 2005 third quarter was $90.8 million, or 47.8
percent of net sales, compared with $68.6 million, or 45.6 percent of net
sales, for the fiscal 2004 third quarter. The increase in the gross profit
rate was primarily due to improved merchandise margins on sales in our direct
segment and, to a lesser extent, improved leveraging of the company's full-
line retail store occupancy costs.
Selling, general and administrative expenses for the fiscal 2005 third
quarter were $71.1 million, or 37.4 percent of net sales, compared with $53.4
million, or 35.5 percent of net sales, for the fiscal 2004 third quarter. The
increase in the selling, general and administrative expenses expressed as a
percentage of net sales was primarily due to increased personnel costs
associated with the company's retail expansion and, to a lesser extent,
increased national magazine advertising.
Income from operations for the fiscal 2005 third quarter increased $4.5
million, or 30 percent, to $19.7 million, or 10.3 percent of net sales,
compared with $15.2 million, or 10.1 percent of net sales, for the fiscal 2004
third quarter.
Retail Segment
Net sales from the Retail Segment, which includes the company's full-line
retail stores, resort stores and outlet stores, increased 44 percent to $115.2
million in the fiscal 2005 third quarter, from $80.1 million in the fiscal
2004 third quarter. Retail Segment net sales represented 60.6 percent of the
company's total net sales in the fiscal 2005 third quarter, compared with 53.2
percent in the fiscal 2004 third quarter.
Net sales from the Retail Segment increased 49 percent to $294.2 million
in the first nine months of fiscal 2005, from $197.9 million in the comparable
period last year. Retail Segment net sales represented 58.8 percent of the
company's total net sales in the first nine months of fiscal 2005, compared
with 51.2 percent in the same period a year ago.
The company opened 27 full-line retail stores during the fiscal 2005 third
quarter for a total of 163 full-line retail stores in operation at the end of
the fiscal 2005 third quarter, compared with 107 full-line retail stores at
the end of the fiscal 2004 third quarter.
Direct Segment
Direct Segment net sales increased 7 percent to $74.9 million in the
fiscal 2005 third quarter from $70.4 million in the fiscal 2004 third quarter.
Direct Segment net sales represented 39.4 percent of the company's total net
sales in the fiscal 2005 third quarter, compared with 46.8 percent in the
fiscal 2004 third quarter.
Direct Segment net sales increased 10 percent to $206.2 million in the
first nine months of fiscal 2005 from $188.3 million in the comparable period
last year. Direct Segment net sales represented 41.2 percent of the company's
total net sales in the first nine months of fiscal 2005, compared with 48.8
percent in the same period a year ago.
"The increase in Direct segment net sales was due to the continued growth
of our Internet channel," Pence said. "Our e-mail database now includes
almost 2.6 million active addresses, which provides us with increased
opportunity to market to these customers in a targeted and affordable manner.
In addition, our e-mail campaigns and catalog mailings now provide a
compelling way to drive retail store traffic."
Internet
Internet net sales increased 21 percent to $47.0 million in the fiscal
2005 third quarter from $39.0 million in the fiscal 2004 third quarter.
Internet net sales represented 62.7 percent of the Direct Segment's net sales
in the fiscal 2005 third quarter, compared with 55.4 percent in the fiscal
2004 third quarter. Internet net sales represented 24.7 percent of the
company's total net sales in the fiscal 2005 third quarter, compared with 25.9
percent in the fiscal 2004 third quarter.
Internet net sales increased 27 percent to $126.8 million in the first
nine months of fiscal 2005 from $99.9 million in the comparable period last
year. Internet net sales represented 61.5 percent of the Direct Segment's net
sales in the first nine months of fiscal 2005, compared with 53.1 percent in
the same period last year. Internet net sales represented 25.4 percent of the
company's total net sales in the first nine months of fiscal 2005, compared
with 25.9 percent in the comparable period last year.
Catalog
Catalog net sales decreased 11 percent to $27.9 million in the fiscal 2005
third quarter from $31.4 million in the fiscal 2004 third quarter. Catalog
net sales represented 37.3 percent of the Direct Segment's net sales in the
fiscal 2005 third quarter, compared with 44.6 percent in the fiscal 2004 third
quarter. Catalog net sales represented 14.7 percent of the company's total
net sales in the fiscal 2005 third quarter, compared with 20.8 percent in the
fiscal 2004 third quarter.
Catalog net sales decreased 10 percent to $79.3 million in the first nine
months of fiscal 2005 from $88.4 million in the comparable period last year.
Catalog net sales represented 38.5 percent of the Direct Segment's net sales
in the first nine months of fiscal 2005, compared with 46.9 percent in the
same period last year. Catalog net sales represented 15.9 percent of the
company's total net sales in the first nine months of fiscal 2005, compared
with 22.9 percent in the comparable period last year.
Liquidity and Inventory
At the end of the fiscal 2005 third quarter, the company had no short or
long-term debt and a cash position of $104.7 million compared with a cash
position of $113.1 million at the end of the fiscal 2004 third quarter. The
company's working capital increased to $125.6 million at the end of the fiscal
2005 third quarter from $111.2 million at the end of the fiscal 2004 third
quarter. Inventory increased $21.9 million, or 24 percent, to $113.0 million
at the end of the fiscal 2005 third quarter from $91.2 million at the end of
the fiscal 2004 third quarter. This increase is primarily attributable to the
addition of 56 full-line retail stores since the end of the fiscal 2004 third
quarter.
Conference Call Information
As previously announced, Coldwater Creek will host a conference call on
Tuesday, November 22, 2005 at 4:45 p.m. (Eastern) to discuss fiscal 2005 third
quarter results. To listen to the live Web cast, log on to
http://phx.corporate-ir.net/playerlink.zhtml?c=92631&s=wm&e=1156163 . Also, a
link to the live Web cast of the call is provided in the company's Web site at
http://www.coldwatercreek.com. The call will be archived from approximately one hour
after the conference call until midnight on Tuesday, November 29, 2005. The
replay can be accessed by dialing (719) 457-0820 and giving the passcode
"9614479". A replay or transcript of the call will also be available in the
investor relations section of the company's Web site. Any additional
information provided during the call will be available by accessing the replay
of the call.
Coldwater Creek is an integrated multi-sales channel retailer of women's
apparel, jewelry, footwear, gift items and accessories through a growing
number of full-line retail stores located across the country, an Internet site
at http://www.coldwatercreek.com and direct-mail catalogs.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release contains "forward-looking statements" within the meaning
of the securities laws, including statements regarding our planned retail
expansion, sales and revenue growth and financial performance. These
statements are based on management's current expectations and are subject to a
number of uncertainties and risks. Actual results may differ materially.
Important factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking statements include,
but are not limited to, our inability to realize the full value of merchandise
currently in inventory as a result of sluggish sales, ever-changing customer
tastes and buying trends; unanticipated increases in mailing and printing
costs; the cost of additional overhead that may be required to expand our
brand; unexpected or increased costs or delays in the development and
expansion of our retail chain and our potential inability to recover these
costs due to sluggish sales; the inherent difficulty in forecasting consumer
buying patterns and trends and the possibility that any recent improvements in
our product margins, or in customer response to our merchandise, may not be
sustained; our inability to continue to fund our retail expansion with
operating cash as a result of either lower sales or higher than anticipated
costs, or both; uncertainties related to our shift to a triple-channel model,
in particular, the effects of shifting patterns of e-commerce or retail
purchases versus catalog purchases; and such other factors as are discussed in
our Form 10-Q Quarterly Reports and in our most recent Form 10-K Annual Report
filed with the U.S. Securities and Exchange Commission ("SEC"). We believe
that these forward-looking statements are reasonable; however, you should not
place undue reliance on forward-looking statements, which are based on current
expectations and speak only as of the date of this release. We are not
obligated to publicly release any revisions to forward-looking statements to
reflect events after the date of this release. We provide a detailed
discussion of risk factors in periodic SEC filings, and you are encouraged to
review these filings in connection with this release.
Contact:
David Gunter
Divisional Vice President of Corporate Communications & Investor Relations
208-263-2266
COLDWATER CREEK INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND SUPPLEMENTAL DATA
(unaudited, in thousands except for per share data and store counts)
Three Months Ended Nine Months Ended
Oct. 29, Oct. 30, Oct. 29, Oct. 30,
Statements of Operations: 2005 2004 (a) 2005 2004 (a)
Net sales $190,115 $150,504 $500,320 $386,179
Cost of sales 99,325 81,942 269,020 216,676
Gross profit 90,790 68,562 231,300 169,503
Selling, general and
administrative expenses 71,118 53,403 187,605 140,248
Income from operations 19,672 15,159 43,695 29,255
Interest, net, and other 1,015 (168) 2,736 84
Income before income taxes 20,687 14,991 46,431 29,339
Income tax provision 8,254 5,921 18,525 11,610
Net income $12,433 $9,070 $27,906 $17,729
Net income per share - Basic $0.20 $0.15 $0.46 $0.31
Weighted average shares
outstanding - Basic 61,104 60,330 60,902 57,743
Net income per share - Diluted $0.20 $0.15 $0.44 $0.30
Weighted average shares
outstanding - Diluted 63,007 62,290 62,845 59,771
Supplemental Data:
Three Months Ended Nine Months Ended
Oct. 29, Oct. 30, Oct. 29, Oct. 30,
Operating
Statistics: 2005 2004 2005 2004
Catalogs mailed 23,801 26,412 67,593 65,512
Full-line retail store count 163 107
Resort store count 2 2
Outlet store count 21 19
Full-line retail store square footage 894 616
Three Months Ended Nine Months Ended
Oct. 29, Oct. 30, Oct. 29, Oct. 30,
Channel Net Sales: 2005 2004 2005 2004
Retail $115,180 $80,114 $294,162 $197,889
Internet 47,006 39,022 126,833 99,911
Catalog 27,929 31,368 79,325 88,379
Total $190,115 $150,504 $500,320 $386,179
Note (a): The amounts for the three and nine-month periods ended October
30, 2004, reflect adjustments relating to a revision in the
method of accounting for rental expense during the retail store
construction period.
COLDWATER CREEK INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except for share data)
ASSETS
October 29, January 29, October 30,
2005 2005 2004 (a)
CURRENT ASSETS:
Cash and cash equivalents $104,677 $111,204 $113,128
Receivables 32,089 12,708 19,165
Inventories 113,019 63,752 91,151
Prepaid and other 8,057 6,628 6,547
Prepaid and deferred marketing
costs 18,333 6,905 9,583
Deferred income taxes 434 1,079 --
Total current assets 276,609 202,276 239,574
Property and equipment, net 162,336 120,689 116,667
Deferred income taxes 2,788 1,233 --
Escrow and restricted cash 1,012 -- --
Other 306 388 425
Total assets $443,051 $324,586 $356,666
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $111,329 $49,406 $94,934
Accrued liabilities 35,889 31,646 30,979
Income taxes payable 3,748 4,736 2,365
Deferred income taxes -- -- 115
Total current liabilities 150,966 85,788 128,393
Deferred rents 59,862 40,319 39,929
Deferred income taxes -- -- 2,043
Other 195 200 200
Total liabilities 211,023 126,307 170,565
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value,
1,000,000 shares authorized,
none issued and outstanding -- -- --
Common stock, $.01 par value,
150,000,000 shares authorized,
61,160,755, 60,652,538 and
60,548,985 shares issued,
respectively 612 607 605
Additional paid-in capital 105,773 98,861 98,086
Deferred compensation on
restricted stock (1,074) -- --
Retained earnings 126,717 98,811 87,410
Total stockholders' equity 232,028 198,279 186,101
Total liabilities and
stockholders' equity $443,051 $324,586 $356,666
Note (a): The amounts as of October 30, 2004, reflect adjustments
relating to a revision in the method of accounting for rental
expense during the retail store construction period.
COLDWATER CREEK INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Nine Months Ended
October 29, October 30,
2005 2004 (a)
OPERATING ACTIVITIES:
Net income $27,906 $17,729
Non cash items:
Depreciation and amortization 18,411 14,432
Amortization of deferred compensation 252 --
Deferred rent amortization (1,494) (772)
Deferred income taxes (910) (647)
Tax benefit from exercises of stock options 3,224 3,558
(Gain) loss on asset disposition (112) 128
Other 19 200
Net change in current assets and liabilities:
Receivables (19,381) (8,482)
Inventories (49,267) (38,450)
Prepaid and other (1,493) (1,578)
Prepaid and deferred marketing costs (11,428) (5,364)
Accounts payable 60,393 54,923
Accrued liabilities 2,248 5,400
Income taxes payable (988) (1,724)
Deferred rents 23,539 19,049
Net cash provided by operating activities 50,919 58,402
INVESTING ACTIVITIES:
Purchase of property and equipment (58,270) (37,648)
Escrows and restricted cash (1,012) --
Repayments of executive loans -- 191
Net cash used in investing activities (59,282) (37,457)
FINANCING ACTIVITIES:
Net proceeds from stock offering -- 42,616
Net proceeds from exercises of stock options 1,836 3,813
Net cash provided by financing activities 1,836 46,429
Net (decrease) increase in
cash and cash equivalents (6,527) 67,374
Cash and cash equivalents,
beginning 111,204 45,754
Cash and cash equivalents, ending $104,677 $113,128
Note (a): The amounts for the nine-month period ended October 30, 2004,
reflect adjustments relating to a revision in the method of
accounting for rental expense during the retail store
construction period.
SOURCE Coldwater Creek Inc.
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Related links:
http://www.coldwatercreek.com
CONTACT:
David Gunter, Divisional Vice President of
Corporate Communications & Investor Relations of Coldwater Creek
Inc., +1-208-263-2266
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