Published:
Kirkland's Reports Second Quarter Results
JACKSON, Tenn., Aug. 28 /PRNewswire-FirstCall/ -- Kirkland's, Inc.
(Nasdaq: KIRK) today reported financial results for the 13-week and 26-week
periods ended August 2, 2008.
Net sales for the 13-week period ended August 2, 2008, were $87.7 million
compared with $87.4 million for the 13-week period ended August 4, 2007.
Comparable store sales for the second quarter of fiscal 2008 increased 2.8%
compared with a 10.5% comparable stores sales decrease in the second quarter
of fiscal 2007. Comparable store sales in mall stores increased 7.2% for the
second quarter, and comparable store sales in off-mall stores increased 0.7%.
The Company opened one store and closed two stores during the quarter to end
the period with 324 stores, as compared to 347 stores at the end of the prior
year quarter.
Net sales for the 26-week period ended August 2, 2008, increased 1.2% to
$171.8 million compared with $169.7 million for the 26-week period ended
August 4, 2007. Comparable store sales for the 26 weeks ended August 2, 2008,
increased 3.5% compared with a 14.7% decrease in the prior-year period.
Comparable store sales in mall stores increased 8.2% while comparable store
sales in off-mall stores increased 1.3%. The Company opened 3 stores and
closed 14 stores during the 26-week period.
The Company reported a net loss of $1.7 million, or $0.09 per diluted
share, for the 13-week period ended August 2, 2008, compared with a net loss
of $9.2 million, or $0.47 per diluted share, in the 13-week period ended
August 4, 2007. The prior-year period also included a net tax benefit in the
amount of $0.7 million, or $0.04 per share, a pre-tax impairment charge of
$540,000, or $0.02 per share, related to the write down of assets in
underperforming stores, and a pre-tax charge of approximately $552,000, or
$0.02 per share, related to the opening of the Company's sales support office
inNashville, Tennessee.
Robert Alderson, Kirkland's President and Chief Executive Officer, said,
"We are pleased with the positive momentum in comparable store sales, the
significant year-over-year improvement in margin, and the success of our Big
Sale in July. We experienced the highest merchandise margin for the second
quarter in over five years. Although traffic remains flat from a year ago,
the customer is responding to our merchandise, which is reflected in more
items per ticket, higher conversions and better sell-through.
"Our plan for fiscal 2008 is to produce year-over-year improvement in
financial performance each quarter and leverage our lower cost structure. We
remain solidly on track with that plan. Inventories are on plan and
exceptionally clean as we head into the third quarter. Our liquidity position
is very strong as we continue to fund our inventory purchases from operations
and have yet to borrow from our credit line."
Investor Conference Call and Web Simulcast
Kirkland's will host a conference call on August 28, 2008, at 11:00 a.m.
ET to discuss its results of operations for the second quarter of fiscal 2008.
The number to call for this interactive teleconference is (303) 262-2130. A
replay of the conference call will be available through September 5, 2008, by
dialing (303) 590-3000 and entering the confirmation number, 11117855#.
The live broadcast of Kirkland's quarterly conference call will be
available online at the Company's website, www.kirklands.com , or at
http://www.videonewswire.com/event.asp?id=50491 on August 28, 2008, beginning
at 11:00 a.m. ET. The online replay will follow shortly after the call and
continue for one year.
Kirkland's, Inc. was founded in 1966 and is a specialty retailer of home
decor inthe United States. Although originally focused in the Southeast, the
Company has grown beyond that region and currently operates 323 stores in 34
states. The Company's stores present a broad selection of distinctive
merchandise, including framed art, mirrors, candles, lamps, picture frames,
accent rugs, garden accessories and artificial floral products. The Company's
stores also offer an extensive assortment of gifts, as well as seasonal
merchandise. More information can be found at www.kirklands.com
Except for historical information contained herein, the statements in this
release are forward-looking and made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties, which may cause
Kirkland's actual results to differ materially from forecasted results. Those
risks and uncertainties include, among other things, the competitive
environment in the home decor industry in general and in Kirkland's specific
market areas, inflation, product availability and growth opportunities,
seasonal fluctuations, and economic conditions in general. Those and other
risks are more fully described in Kirkland's filings with the Securities and
Exchange Commission, including the Company's Annual Report on Form 10-K filed
on May 1, 2008. Kirkland's disclaims any obligation to update any such
factors or to publicly announce results of any revisions to any of the
forward-looking statements contained herein to reflect future events or
developments.
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
13 Week Period Ended
August 2, August 4,
2008 2007
Net sales $87,684 $87,359
Cost of sales 59,815 63,548
Gross profit 27,869 23,811
Operating expenses:
Other operating expenses 25,132 27,653
Depreciation and amortization 4,473 4,865
Nashville relocation expenses - 552
Store impairment charge - 540
Operating loss (1,736) (9,799)
Interest expense 29 157
Interest income (16) (1)
Other expense (income) (64) 27
Loss before income taxes (1,685) (9,982)
Income tax expense (benefit) 9 (3,517)
Valuation allowance - 2,781
Net loss $(1,694) $(9,246)
Earnings per share:
Basic $(0.09) $(0.47)
Diluted $(0.09) $(0.47)
Shares used to calculate earnings per
share:
Basic 19,623 19,501
Diluted 19,623 19,501
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
26 Week Period Ended
August 2, August 4,
2008 2007
Net sales $171,761 $169,673
Cost of sales 116,984 123,630
Gross profit 54,777 46,043
Operating expenses:
Other operating expenses 49,830 57,082
Depreciation and amortization 9,156 9,882
Nashville relocation expenses - 762
Store impairment charge 352 813
Operating loss (4,561) (22,496)
Interest expense 59 185
Interest income (47) (180)
Other income (336) (31)
Loss before income taxes (4,237) (22,470)
Income tax expense (benefit) 9 (8,506)
Valuation allowance - 2,781
Net loss $(4,246) $(16,745)
Earnings per share:
Basic $(0.22) $(0.86)
Diluted $(0.22) $(0.86)
Shares used to calculate earnings per
share:
Basic 19,614 19,492
Diluted 19,614 19,492
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in thousands)
August 2, February 2, August 4,
2008 2008 2007
ASSETS
Current assets:
Cash and cash equivalents $4,699 $5,820 $2,465
Inventories, net 42,718 41,246 47,372
Other current assets 6,646 10,868 15,936
Total current assets 54,063 57,934 65,773
Property and equipment, net 54,188 63,002 68,101
Other long-term assets 1,162 1,196 2,075
Total assets $109,413 $122,132 $135,949
LIABILITIES AND SHAREHOLDERS' EQUITY
Revolving line of credit $- $- $12,911
Accounts payable 13,834 15,786 11,934
Other current liabilities 22,393 25,566 23,475
Total current liabilities 36,227 41,352 48,320
Deferred rent and other long-term
liabilities 34,678 38,210 35,912
Total liabilities 70,905 79,562 84,232
Net shareholders' equity 38,508 42,570 51,717
Total liabilities and shareholders'
equity $109,413 $122,132 $135,949
KIRKLAND'S, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(dollars in thousands)
26 Week Period Ended
August 2, August 4,
2008 2007
Net cash provided by (used in):
Operating activities $(155) $(28,283)
Investing activities (1,013) (7,643)
Financing activities 47 13,033
Cash and cash equivalents:
Net decrease $(1,121) $(22,893)
Beginning of the period 5,820 25,358
End of the period $4,699 $2,465
SOURCE Kirkland's, Inc.
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