ATLANTA--(BUSINESS WIRE)--Carter’s, Inc. (NYSE:CRI), the largest branded marketer in the United States of apparel exclusively for babies and young children, today reported its fourth quarter and fiscal 2012 results.
“We achieved a record level of sales and earnings in our fourth quarter and fiscal year 2012. Our results reflect the strength of our product offerings, our focus on extending the reach of our brands, and the effectiveness of our growth initiatives,” said Michael D. Casey, Chairman and Chief Executive Officer. “We are forecasting good growth in sales and earnings in 2013, and are planning a higher level of investments to support our growth strategies in the United States and international markets.”
Fourth Quarter of Fiscal 2012 compared to Fourth Quarter of Fiscal 2011
Consolidated net sales increased $82.6 million, or 13.6%, to $689.3 million. Net domestic sales of the Company’s Carter’s brands increased $74.6 million, or 16.9%, to $517.0 million. Net domestic sales of the Company’s OshKosh B’gosh brand decreased $2.6 million, or 2.3%, to $107.4 million. Net international sales increased $10.6 million, or 19.5%, to $64.9 million.
Operating income in the fourth quarter of fiscal 2012 was $78.4 million, an increase of $23.3 million, or 42.4%, from $55.0 million in the fourth quarter of fiscal 2011. Fourth quarter fiscal 2012 pre-tax income includes expenses totaling approximately $7.5 million related to costs associated with the previously-announced office consolidation, the revaluation of contingent consideration associated with the June 2011 acquisition of Bonnie Togs, and costs associated with the previously-announced closure of the Company's Hogansville, Georgia distribution center in fiscal 2013. Fourth quarter fiscal 2011 pre-tax income included approximately $3.0 million of expenses related to the Bonnie Togs acquisition. Excluding the facility consolidation and closure-related costs and the acquisition-related expenses noted above in both 2012 and 2011, adjusted operating income in the fourth quarter of fiscal 2012 was $85.9 million, an increase of $27.9 million, or 48.0%, from the fourth quarter of fiscal 2011.
Net income in the fourth quarter of fiscal 2012 increased $13.9 million, or 40.0%, to $48.7 million, or $0.81 per diluted share, compared to $34.8 million, or $0.59 per diluted share, in the fourth quarter of fiscal 2011. Excluding the facility consolidation and closure-related costs and the acquisition-related expenses noted above, adjusted net income in the fourth quarter of fiscal 2012 increased $16.4 million, or 44.1%, to $53.7 million, or $0.89 per diluted share. This compares to adjusted net income of $37.3 million, or $0.63 per diluted share, in the fourth quarter of fiscal 2011.
A reconciliation of income as reported under accounting principles generally accepted in the United States (“GAAP”) to adjusted income is provided at the end of this release.
Business Segment Results (Fourth Quarter of Fiscal 2012 compared to Fourth Quarter of Fiscal 2011)
Carter’s Segments
Carter’s retail segment sales increased $48.8 million, or 23.7%, to $255.1 million. The increase was driven by incremental sales of $23.8 million from new store openings and $18.6 million from eCommerce sales, as well as a comparable store sales increase of $9.4 million, or 5.2%. This growth was partially offset by a sales decrease of $3.0 million attributed to store closings. In the fourth quarter of fiscal 2012, the Company opened 16 Carter’s retail stores and closed one. As of the end of the fourth quarter, the Company operated 413 Carter’s retail stores in the United States.
Carter’s wholesale segment sales grew $25.8 million, or 10.9%, to $261.9 million, reflecting growth in all related brands.
OshKosh B’gosh Segments
OshKosh retail segment sales decreased $0.3 million, or 0.4%, to $89.0 million. The decrease reflects a comparable store sales decline of $4.8 million, or 6.2%, and $3.6 million attributed to store closings. The decreases were partially offset by incremental sales of $6.1 million from eCommerce and $2.0 million from new store openings. In the fourth quarter of fiscal 2012, the Company opened five OshKosh retail stores and closed four. As of the end of the fourth quarter, the Company operated 168 OshKosh retail stores in the United States.
OshKosh wholesale segment sales decreased $2.2 million, or 10.8%, to $18.4 million.
International Segment
International segment sales increased $10.6 million, or 19.5%, to $64.9 million, driven by growth in the Company's Canadian retail stores. In the fourth quarter of fiscal 2012, the Company opened four retail stores in Canada and closed one. As of the end of the fourth quarter, the Company operated 82 retail stores in Canada.
Fiscal 2012 compared to Fiscal 2011
Consolidated net sales increased $272.0 million, or 12.9%, to $2.4 billion. Net domestic sales of the Company’s Carter’s brands increased $189.6 million, or 11.8%, to $1.8 billion. Net domestic sales of the Company’s OshKosh B’gosh brand increased $0.3 million, or 0.1%, to $363.1 million. Net international sales increased $82.0 million to $218.3 million. Consolidated net sales in fiscal 2012 include $46.1 million in off-price channel sales, compared to $79.5 million in fiscal 2011.
Operating income in fiscal 2012 was $262.0 million, an increase of $74.5 million, or 39.8%, from $187.5 million in fiscal 2011. Fiscal 2012 pre-tax income includes expenses totaling approximately $13.1 million related to costs associated with the previously-announced office consolidation, the revaluation of contingent consideration associated with the acquisition of Bonnie Togs, and the previously-announced closure of the Company's Hogansville, Georgia distribution center. Fiscal 2011 pre-tax income included approximately $12.2 million of expenses related to the Bonnie Togs acquisition. Excluding the facility consolidation and closure-related costs and the acquisition-related expenses noted above in both 2012 and 2011, adjusted operating income in fiscal 2012 was $275.1 million, an increase of $75.4 million, or 37.8%, from fiscal 2011.
Net income in fiscal 2012 increased $47.1 million, or 41.3%, to $161.2 million, or $2.69 per diluted share, compared to $114.0 million, or $1.94 per diluted share, in fiscal 2011. Excluding the facility consolidation and closure-related costs and the acquisition-related expenses noted above, adjusted net income in fiscal 2012 increased $47.5 million, or 38.5%, to $170.7 million, or $2.85 per diluted share. This compares to adjusted net income of $123.2 million, or $2.09 per diluted share, in fiscal 2011.
A reconciliation of income as reported under GAAP to adjusted income is provided at the end of this release.
Cash flow from operations in fiscal 2012 was $278.6 million compared to cash flow from operations of $81.1 million in fiscal 2011. The increase was primarily due to favorable net changes in working capital and increased earnings.
Business Segment Results (Fiscal 2012 compared to Fiscal 2011)
Carter’s Segments
Carter’s retail segment sales increased $147.3 million, or 21.9%, to $818.9 million, driven by incremental sales of $77.3 million generated by new store openings and $54.3 million from eCommerce sales, as well as a comparable store sales increase of $23.5 million, or 3.9%. This growth was partially offset by a sales decrease of $7.8 million attributed to store closings. In fiscal 2012, the Company opened 63 Carter’s retail stores and closed nine.
Carter’s wholesale segment sales increased $42.3 million, or 4.5%, to $981.4 million, reflecting growth in all segment brands, partially offset by lower off-price channel sales.
OshKosh B’gosh Segments
OshKosh retail segment sales increased $2.4 million, or 0.9%, to $283.3 million, driven by incremental sales of $15.1 million generated by eCommerce and $3.8 million generated by new store openings, partially offset by a decrease of $11.4 million attributed to store closings and a comparable store sales decrease of $5.1 million, or 2.0%. In fiscal 2012, the Company opened eight OshKosh retail stores and closed ten.
OshKosh wholesale segment sales decreased $2.1 million, or 2.6%, to $79.8 million.
International Segment
International segment sales increased $82.0 million to $218.3 million, principally reflecting the contribution of the Company's business in Canada and higher wholesale sales in other countries. In fiscal 2012, the Company opened 18 retail stores in Canada and closed one.
Japan Operations
Consistent with its strategy to extend the reach of its brands, on February 1, 2013, the Company closed on a transaction with a former licensee in Japan. The Company currently sells Carter's and OshKosh B’gosh branded products through 97 retail locations, which include 14 branded stores and 83 additional retail points of distribution.
Japan, the third largest children's apparel market in the world, provided the largest international contribution to the Company's royalty income in 2012. To support direct retail operations, the Company has engaged a new leadership team in Japan and has retained substantially all of the former licensee's retail employees.
The Company's near-term priorities for its new operations in Japan include strengthening brand presentation and retail execution, and leveraging its supply chain capabilities to improve product costs and profitability. In 2013, the Company expects this acquisition to generate net sales of approximately $15 million to $17 million and to be approximately $0.10 dilutive to adjusted earnings per share.
2013 Business Outlook
For fiscal 2013, the Company projects net sales will increase approximately 8% to 10% over fiscal 2012. The Company expects adjusted diluted earnings per share, excluding expenses of approximately $32 million to $36 million related to the previously-announced corporate office consolidation, expenses totaling approximately $4 million to $5 million related to the Bonnie Togs acquisition and the previously-announced distribution center closure, or other items the Company believes to be nonrepresentative of underlying business performance, to increase approximately 15% compared to adjusted diluted earnings per share of $2.85 in fiscal 2012.
For the first quarter of fiscal 2013, the Company expects net sales will increase approximately 5% over the first quarter of fiscal 2012. The Company expects adjusted diluted earnings per share, excluding expenses of approximately $8 million to $10 million related to the previously-announced corporate office consolidation, expenses totaling approximately $1 million to $2 million related to the Bonnie Togs acquisition and the previously-announced distribution center closure, or other items the Company believes to be nonrepresentative of underlying business performance, to increase approximately 20% compared to adjusted diluted earnings per share of $0.56 in the first quarter of fiscal 2012.
Conference Call
The Company will hold a conference call with investors to discuss fourth quarter and fiscal 2012 results and its business outlook on February 27, 2013 at 8:30 a.m. Eastern Time. To participate in the call, please dial 913-312-0644, passcode 7377345. To listen to a live broadcast of the call on the internet, please log on to www.carters.com and select the “Fourth Quarter 2012 Earnings Conference Call” link under the “Investor Relations” tab. Presentation materials for the call can be accessed under the same "Investor Relations" tab by selecting the “Webcasts & Presentations” link under the “News & Events” tab. A replay of the call will be available shortly after the broadcast through March 8, 2013, at 888-203-1112 (U.S. / Canada) or 719-457-0820 (International), passcode 7377345. The replay will also be archived on the Company's website.
About Carter's, Inc.
Carter's, Inc. is the largest branded marketer in the United States of apparel and related products exclusively for babies and young children. The Company owns the Carter's and OshKosh B'gosh brands, two of the most recognized brands in the marketplace. These brands are sold in leading department stores, national chains, and specialty retailers domestically and internationally. They are also sold through more than 600 Company-operated stores in the United States, Canada, and Japan and on-line at www.carters.com and www.oshkoshbgosh.com. The Company's Just One You, Precious Firsts, and Genuine Kids brands are available at Target, and its Child of Mine brand is available at Walmart. Carter's is headquartered in Atlanta, Georgia. Additional information may be found at www.carters.com.
Cautionary Language
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to the Company's future performance, including, without limitation, statements with respect to the Company's anticipated financial results for the first quarter of fiscal 2013 and fiscal year 2013, or any other future period, assessment of the Company's performance and financial position, and drivers of the Company's sales and earnings growth. Such statements are based on current expectations only, and are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. Factors that could cause actual results to materially differ include the risks of: losing one or more major customers; the Company's products not being accepted in the marketplace; changes in consumer preference and fashion trends; negative publicity; the Company failing to protect its intellectual property; the breach of the Company's consumer databases; increased production costs; deflationary pricing pressures; decreases in the overall level of consumer spending; disruptions resulting from the Company's dependence on foreign supply sources; the Company's foreign supply sources not meeting the Company's quality standards or regulatory requirements; disruption to the Company's eCommerce business or distribution facilities due to the planned transition or otherwise; disruptions in the Company's supply chain or in-sourcing capabilities resulting from sourcing through a single port or otherwise; the loss of the Company's principal product sourcing agent; increased competition in the baby and young children's apparel market; the Company being unable to identify new retail store locations or negotiate appropriate lease terms for the retail stores; the Company not adequately forecasting demand, which could, among other things, create significant levels of excess inventory; failure to achieve sales growth plans, cost savings, and other assumptions that support the carrying value of the Company's intangible assets; not attracting and retaining key individuals within the organization; failure to implement needed upgrades to the Company's information technology systems; disruptions resulting from the Company's transition of distribution functions to its new Braselton facility; charges related to the consolidation of the company's Shelton, Connecticut-based operations with the company's Atlanta, Georgia-based operations being greater than estimated; the office consolidation not being completed during the expected time frame; the Company not achieving the expected benefits of the office consolidation; being unsuccessful in expanding into international markets and failing to successfully manage legal, regulatory, political and economic risks of international operations, including maintaining compliance with world-wide anti-bribery laws. Many of these risks are further described in the most recently filed Quarterly Report on Form 10-Q and other reports filed with the Securities and Exchange Commission under the headings "Risk Factors" and "Forward-Looking Statements." The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(dollars in thousands, except for share data) |
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(unaudited) |
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For the
quarters ended |
For the |
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December 29, |
December 31, |
December 29, |
December 31, |
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| Net sales | $ | 689,253 | $ | 606,629 | $ | 2,381,734 | $ | 2,109,734 | |||||||||
| Cost of goods sold | 399,364 | 399,592 | 1,443,786 | 1,417,456 | |||||||||||||
| Gross profit | 289,889 | 207,037 | 937,948 | 692,278 | |||||||||||||
| Selling, general, and administrative expenses | 222,049 | 161,174 | 713,211 | 542,086 | |||||||||||||
| Royalty income | (10,527 | ) | (9,182 | ) | (37,249 | ) | (37,274 | ) | |||||||||
| Operating income | 78,367 | 55,045 | 261,986 | 187,466 | |||||||||||||
| Interest expense | 1,427 | 1,878 | 6,995 | 7,534 | |||||||||||||
| Interest income | (98 | ) | (35 | ) | (255 | ) | (386 | ) | |||||||||
| Foreign currency loss (gain) | 5 | (251 | ) | (145 | ) | (570 | ) | ||||||||||
| Income before income taxes | 77,033 | 53,453 | 255,391 | 180,888 | |||||||||||||
| Provision for income taxes | 28,341 | 18,668 | 94,241 | 66,872 | |||||||||||||
| Net income | $ | 48,692 | $ | 34,785 | $ | 161,150 | $ | 114,016 | |||||||||
| Basic net income per common share | $ | 0.82 | $ | 0.59 | $ | 2.73 | $ | 1.96 | |||||||||
| Diluted net income per common share | $ | 0.81 | $ | 0.59 | $ | 2.69 | $ | 1.94 | |||||||||
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BUSINESS SEGMENT RESULTS |
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(dollars in thousands) |
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(unaudited) |
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| For the quarters ended | For the fiscal years ended | ||||||||||||||||||||||||||||
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December 29, 2012 |
% of Total |
December 31, 2011 |
% of Total |
December 29, 2012 |
% of Total |
December 31, 2011 |
% of Total |
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| Net sales: | |||||||||||||||||||||||||||||
| Carter’s Wholesale | $ | 261,860 | 38.0 | % | $ | 236,087 | 38.9 | % | $ | 981,445 | 41.2 | % | $ | 939,115 | 44.5 | % | |||||||||||||
| Carter’s Retail (a) | 255,145 | 37.0 | % | 206,309 | 34.0 | % | 818,909 | 34.4 | % | 671,590 | 31.8 | % | |||||||||||||||||
| Total Carter’s | 517,005 | 75.0 | % | 442,396 | 72.9 | % | 1,800,354 | 75.6 | % | 1,610,705 | 76.3 | % | |||||||||||||||||
| OshKosh Retail (a) | 88,984 | 12.9 | % | 89,322 | 14.7 | % | 283,343 | 11.9 | % | 280,900 | 13.3 | % | |||||||||||||||||
| OshKosh Wholesale | 18,413 | 2.7 | % | 20,640 | 3.4 | % | 79,752 | 3.3 | % | 81,888 | 3.9 | % | |||||||||||||||||
| Total OshKosh | 107,397 | 15.6 | % | 109,962 | 18.1 | % | 363,095 | 15.2 | % | 362,788 | 17.2 | % | |||||||||||||||||
| International (b) | 64,851 | 9.4 | % | 54,271 | 9.0 | % | 218,285 | 9.2 | % | 136,241 | 6.5 | % | |||||||||||||||||
| Total net sales | $ | 689,253 | 100.0 | % | $ | 606,629 | 100.0 | % | $ | 2,381,734 | 100.0 | % | $ | 2,109,734 | 100.0 | % | |||||||||||||
| Operating income (loss): |
% of segment net sales |
% of segment net sales |
% of segment net sales |
% of segment net sales |
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| Carter’s Wholesale | $ | 43,550 | 16.6 | % | $ | 28,684 | 12.1 | % | $ | 172,673 | 17.6 | % | $ | 117,897 | 12.6 | % | |||||||||||||
| Carter’s Retail (a) | 52,401 | 20.5 | % | 33,672 | 16.3 | % | 145,940 | 17.8 | % | 105,818 | 15.8 | % | |||||||||||||||||
| Total Carter’s | 95,951 | 18.6 | % | 62,356 | 14.1 | % | 318,613 | 17.7 | % | 223,715 | 13.9 | % | |||||||||||||||||
| OshKosh Retail (a) | 5,533 | 6.2 | % | (230 | ) | (0.3 | )% | (7,752 | ) | (2.7 | )% | (9,658 | ) | (3.4 | )% | ||||||||||||||
| OshKosh Wholesale | 955 | 5.2 | % | (646 | ) | (3.1 | )% | 4,086 | 5.1 | % | 822 | 1.0 | % | ||||||||||||||||
| Total OshKosh | 6,488 | 6.0 | % | (876 | ) | (0.8 | )% | (3,666 | ) | (1.0 | )% | (8,836 | ) | (2.4 | )% | ||||||||||||||
| International (b) (c) | 14,391 | 22.2 | % | 10,754 | 19.8 | % | 43,376 | 19.9 | % | 27,273 | 20.0 | % | |||||||||||||||||
| Total segment operating income | 116,830 | 17.0 | % | 72,234 | 11.9 | % | 358,323 | 15.0 | % | 242,152 | 11.5 | % | |||||||||||||||||
| Corporate expenses (d) (e) (f) | (38,463 | ) | (5.6 | )% | (17,189 | ) | (2.8 | )% | (96,337 | ) | (4.0 | )% | (54,686 | ) | (2.6 | )% | |||||||||||||
| Total operating income | $ | 78,367 | 11.4 | % | $ | 55,045 | 9.1 | % | $ | 261,986 | 11.0 | % | $ | 187,466 | 8.9 | % | |||||||||||||
(a) Includes eCommerce results.
(b) Net sales includes international retail, eCommerce, and wholesale sales. Operating income includes international licensing income.
(c) Includes charges of $0.7 million and $3.6 million for the quarter and fiscal year ended December 29, 2012, respectively, associated with the revaluation of the Company’s contingent consideration. Includes $1.5 million and $2.5 million for the quarter and fiscal year ended December 31, 2011, respectively, associated with the revaluation of the Company’s contingent consideration. Includes charges of $0.7 million and $6.7 million for the quarter and fiscal year ended December 31, 2011, respectively, related to the amortization of the fair value step-up for Bonnie Togs inventory acquired.
(d) Corporate expenses generally include expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, building occupancy, information technology, certain legal fees, consulting, and audit fees.
(e) Includes $0.4 million and $3.1 million in facility closure-related costs related to the closure of a distribution facility located in Hogansville, GA, for the quarter and fiscal year ended December 29, 2012, and $6.4 million related to the Shelton, CT office consolidation, for the quarter and fiscal year ended December 29, 2012.
(f) Includes $0.7 million and $3.0 million of professional service fees and other expenses associated with the acquisition of Bonnie Togs for the quarter and fiscal year ended December 31, 2011.
Certain prior year amounts have been reclassified for comparative purposes.
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CONSOLIDATED BALANCE SHEETS |
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December 29, 2012 |
December 31, 2011 |
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| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 382,236 | $ | 233,494 | |||||
| Accounts receivable, net | 168,046 | 157,754 | |||||||
| Finished goods inventories, net | 349,530 | 347,215 | |||||||
| Prepaid expenses and other current assets | 22,216 | 18,519 | |||||||
| Deferred income taxes | 35,675 | 25,165 | |||||||
| Total current assets | 957,703 | 782,147 | |||||||
| Property, plant, and equipment, net | 170,110 | 122,346 | |||||||
| Tradenames | 305,884 | 306,176 | |||||||
| Goodwill | 189,749 | 188,679 | |||||||
| Deferred debt issuance costs, net | 2,878 | 2,624 | |||||||
| Other intangible assets, net | 188 | 258 | |||||||
| Other assets | 3,597 | 479 | |||||||
| Total assets | $ | 1,630,109 | $ | 1,402,709 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
| Current liabilities: | |||||||||
| Current maturities of long-term debt | $ | — | $ | — | |||||
| Accounts payable | 149,625 | 102,804 | |||||||
| Other current liabilities | 94,610 | 49,949 | |||||||
| Total current liabilities | 244,235 | 152,753 | |||||||
| Long-term debt | 186,000 | 236,000 | |||||||
| Deferred income taxes | 114,341 | 114,421 | |||||||
| Other long-term liabilities | 100,054 | 93,826 | |||||||
| Total liabilities | 644,630 | 597,000 | |||||||
| Commitments and contingencies | |||||||||
| Stockholders’ equity: | |||||||||
| Preferred stock; par value $.01 per share; 100,000 shares authorized; none issued or outstanding at December 29, 2012 and December 31, 2011, respectively | — | — | |||||||
| Common stock, voting; par value $.01 per share; 150,000,000 shares authorized; 59,126,639 and 58,595,421 shares issued and outstanding at December 29, 2012 and December 31, 2011, respectively | 591 | 586 | |||||||
| Additional paid-in capital | 250,276 | 231,738 | |||||||
| Accumulated other comprehensive loss | (11,205 | ) | (11,282 | ) | |||||
| Retained earnings | 745,817 | 584,667 | |||||||
| Total stockholders’ equity | 985,479 | 805,709 | |||||||
| Total liabilities and stockholders’ equity | $ | 1,630,109 | $ | 1,402,709 | |||||
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CONSOLIDATED STATEMENTS OF CASH FLOW |
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(dollars in thousands) |
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(unaudited) |
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| For the fiscal years ended | ||||||||||
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December 29, |
December 31, |
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| Cash flows from operating activities: | ||||||||||
| Net income | $ | 161,150 | $ | 114,016 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
| Depreciation and amortization | 39,473 | 32,548 | ||||||||
| Amortization of Bonnie Togs inventory step-up | — | 6,672 | ||||||||
| Non-cash revaluation of contingent consideration | 3,589 | 2,484 | ||||||||
| Amortization of Bonnie Togs tradename and non-compete agreements | 375 | 187 | ||||||||
| Amortization of debt issuance costs | 877 | 708 | ||||||||
| Non-cash stock-based compensation expense | 13,049 | 9,644 | ||||||||
| Income tax benefit from stock-based compensation | (2,760 | ) | (6,900 | ) | ||||||
| Loss on disposal of property, plant, and equipment | 802 | 139 | ||||||||
| Deferred income taxes | (9,651 | ) | 9,128 | |||||||
| Effect of changes in operating assets and liabilities: | ||||||||||
| Accounts receivable | (10,200 | ) | (33,222 | ) | ||||||
| Inventories | (1,790 | ) | (20,571 | ) | ||||||
| Prepaid expenses and other assets | (6,004 | ) | (948 | ) | ||||||
| Accounts payable and other liabilities | 89,709 | (32,811 | ) | |||||||
| Net cash provided by operating activities | 278,619 | 81,074 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Capital expenditures | (83,398 | ) | (45,495 | ) | ||||||
| Acquisition of Bonnie Togs, net of cash acquired | — | (61,207 | ) | |||||||
| Proceeds from sale of property, plant, and equipment | 6 | 10 | ||||||||
| Net cash used in investing activities | (83,392 | ) | (106,692 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Borrowings under revolving credit facility | 2,500 | — | ||||||||
| Payments on revolving credit facility | (52,500 | ) | — | |||||||
| Payment of debt issuance costs | (1,916 | ) | — | |||||||
| Income tax benefit from stock-based compensation | 2,760 | 6,900 | ||||||||
| Withholdings from vesting of restricted stock | (2,846 | ) | (2,181 | ) | ||||||
| Proceeds from exercise of stock options | 5,685 | 6,786 | ||||||||
| Net cash (used in) provided by financing activities | (46,317 | ) | 11,505 | |||||||
| Effect of exchange rate changes on cash | (168 | ) | 225 | |||||||
| Net increase (decrease) in cash and cash equivalents | 148,742 | (13,888 | ) | |||||||
| Cash and cash equivalents, beginning of period | 233,494 | 247,382 | ||||||||
| Cash and cash equivalents, end of period | $ | 382,236 | $ | 233,494 | ||||||
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RECONCILIATION OF GAAP TO ADJUSTED RESULTS |
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(dollars in millions, except earnings per share) |
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| Quarter ended December 29, 2012 | ||||||||||||||||||||||||||||||
| SG&A | Operating Income | Net Income | Diluted EPS | |||||||||||||||||||||||||||
| As reported (GAAP): | $ | 222.0 | $ | 78.4 | $ | 48.7 | $ | 0.81 | ||||||||||||||||||||||
| Shelton office consolidation costs (a) | (6.4 | ) | 6.4 | 4.0 | 0.07 | |||||||||||||||||||||||||
| Revaluation of contingent consideration (b) | (0.7 | ) | 0.7 | 0.7 | 0.01 | |||||||||||||||||||||||||
| Facility closure costs - Hogansville DC (c) | (0.4 | ) | 0.4 | 0.3 | — | |||||||||||||||||||||||||
| As adjusted (f): | $ | 214.6 | $ | 85.9 | $ | 53.7 | $ | 0.89 | ||||||||||||||||||||||
| Fiscal year ended December 29, 2012 | ||||||||||||||||||||||||||||||
| SG&A | Operating Income | Net Income | Diluted EPS | |||||||||||||||||||||||||||
| As reported (GAAP): | $ | 713.2 | $ | 262.0 | $ | 161.2 | $ | 2.69 | ||||||||||||||||||||||
| Shelton office consolidation costs (a) | (6.4 | ) | 6.4 | 4.0 | 0.07 | |||||||||||||||||||||||||
| Revaluation of contingent consideration (b) | (3.6 | ) | 3.6 | 3.6 | 0.06 | |||||||||||||||||||||||||
| Facility closure costs - Hogansville DC (c) | (3.1 | ) | 3.1 | 1.9 | 0.03 | |||||||||||||||||||||||||
| As adjusted (f): | $ | 700.1 | $ | 275.1 | $ | 170.7 | $ | 2.85 | ||||||||||||||||||||||
| Quarter ended December 31, 2011 | ||||||||||||||||||||||||||||||
| Gross Margin | SG&A | Operating Income | Net Income | Diluted EPS | ||||||||||||||||||||||||||
| As reported (GAAP): | $ | 207.0 | $ | 161.2 | $ | 55.0 | $ | 34.8 | $ | 0.59 | ||||||||||||||||||||
| Amortization of fair value step-up of inventory (d) | 0.7 | — | 0.7 | 0.5 | 0.01 | |||||||||||||||||||||||||
| Revaluation of contingent consideration (b) | — | (1.5 | ) | 1.5 | 1.5 | 0.02 | ||||||||||||||||||||||||
| Professional fees / other expenses (e) | — | (0.7 | ) | 0.7 | 0.5 | 0.01 | ||||||||||||||||||||||||
| As adjusted (f): | $ | 207.8 | $ | 158.9 | $ | 58.0 | $ | 37.3 | $ | 0.63 | ||||||||||||||||||||
| Fiscal year ended December 31, 2011 | ||||||||||||||||||||||||||||||
| Gross Margin | SG&A | Operating Income | Net Income | Diluted EPS | ||||||||||||||||||||||||||
| As reported (GAAP): | $ | 692.3 | $ | 542.1 | $ | 187.5 | $ | 114.0 | $ | 1.94 | ||||||||||||||||||||
| Amortization of fair value step-up of inventory (d) | 6.7 | — | 6.7 | 4.8 | 0.08 | |||||||||||||||||||||||||
| Revaluation of contingent consideration (b) | — | (2.5 | ) | 2.5 | 2.5 | 0.04 | ||||||||||||||||||||||||
| Professional fees / other expenses (e) | — | (3.0 | ) | 3.0 | 1.9 | 0.03 | ||||||||||||||||||||||||
| As adjusted (f): | $ | 699.0 | $ | 536.6 | $ | 199.7 | $ | 123.2 | $ | 2.09 | ||||||||||||||||||||
(a) Includes costs related to the Shelton, CT office consolidation, announced in the fourth quarter of fiscal 2012.
(b) Revaluation of the contingent consideration liability associated with the Company's June 2011 acquisition of Bonnie Togs.
(c) Includes costs related to the closure of a distribution facility located in Hogansville, GA, announced in the first quarter of fiscal 2012.
(d) Expense related to the amortization of the fair value step-up for Bonnie Togs inventory acquired.
(e) Professional service fees and other expenses associated with the acquisition of Bonnie Togs.
(f) In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present gross margin, SG&A, operating income, net income, and net income on a diluted share basis excluding the adjustments discussed above. The Company believes these adjustments provide a meaningful comparison of the Company’s results. The adjusted, non-GAAP financial measurements included in this earnings release should not be considered as an alternative to net income or as any other measurement of performance derived in accordance with GAAP. The adjusted, non-GAAP financial measurements are presented for informational purposes only and are not necessarily indicative of the Company’s future condition or results of operations.
Note: Results may not be additive due to rounding. Certain prior year amounts have been reclassified for comparative purposes.
|
CARTER’S, INC. |
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|
RECONCILIATION OF GAAP TO ADJUSTED RESULTS |
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|
(dollars in millions, except earnings per share) |
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| Quarter ended March 31, 2012 | |||||||||||||||||
| SG&A | Operating Income | Net Income | Diluted EPS | ||||||||||||||
| As reported (GAAP): | $ | 149.7 | $ | 53.8 | $ | 32.3 | $ | 0.54 | |||||||||
| Revaluation of contingent consideration (a) | (0.7 | ) | 0.7 | 0.7 | 0.01 | ||||||||||||
| Facility closure costs - Hogansville DC (b) | (1.1 | ) | 1.1 | 0.7 | 0.01 | ||||||||||||
| As adjusted (c): | $ | 147.9 | $ | 55.6 | $ | 33.7 | $ | 0.56 | |||||||||
(a) Revaluation of the contingent consideration liability associated with the Company's June 2011 acquisition of Bonnie Togs.
(b) Includes costs related to the closure of a distribution facility located in Hogansville, GA, announced in the first quarter of fiscal 2012.
(c) In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present SG&A, operating income, net income, and net income on a diluted share basis excluding the adjustments discussed above. The Company believes these adjustments provide a meaningful comparison of the Company’s results. The adjusted, non-GAAP financial measurements included in this earnings release should not be considered as an alternative to net income or as any other measurement of performance derived in accordance with GAAP. The adjusted, non-GAAP financial measurements are presented for informational purposes only and are not necessarily indicative of the Company’s future condition or results of operations.
Note: Results may not be additive due to rounding. Certain prior year amounts have been reclassified for comparative purposes.
|
CARTER’S, INC. |
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|
RECONCILIATION OF NET INCOME ALLOCABLE TO COMMON SHAREHOLDERS |
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|
For the
quarters ended |
For the |
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|
December 29, 2012 |
December 31, 2011 |
December 29, 2012 |
December 31, 2011 |
|||||||||||||||
| Weighted-average number of common and common equivalent shares outstanding: | ||||||||||||||||||
| Basic number of common shares outstanding | 58,344,635 | 57,955,394 | 58,217,503 | 57,513,748 | ||||||||||||||
| Dilutive effect of unvested restricted stock | 203,105 | 180,569 | 186,018 | 129,262 | ||||||||||||||
| Dilutive effect of stock options | 668,564 | 486,570 | 665,666 | 571,907 | ||||||||||||||
| Diluted number of common and common equivalent shares outstanding | 59,216,304 | 58,622,533 | 59,069,187 | 58,214,917 | ||||||||||||||
| As reported on a GAAP Basis: | ||||||||||||||||||
| Basic net income per common share: | ||||||||||||||||||
| Net income | $ | 48,692,000 | $ | 34,785,000 | $ | 161,150,000 | $ | 114,016,000 | ||||||||||
| Income allocated to participating securities | (631,743 | ) | (366,660 | ) | (2,095,309 | ) | (1,210,944 | ) | ||||||||||
| Net income available to common shareholders | $ | 48,060,257 | $ | 34,418,340 | $ | 159,054,691 | $ | 112,805,056 | ||||||||||
| Basic net income per common share | $ | 0.82 | $ | 0.59 | $ | 2.73 | $ | 1.96 | ||||||||||
| Diluted net income per common share: | ||||||||||||||||||
| Net income | $ | 48,692,000 | $ | 34,785,000 | $ | 161,150,000 | $ | 114,016,000 | ||||||||||
| Income allocated to participating securities | (624,678 | ) | (363,639 | ) | (2,071,926 | ) | (1,199,147 | ) | ||||||||||
| Net income available to common shareholders | $ | 48,067,322 | $ | 34,421,361 | $ | 159,078,074 | $ | 112,816,853 | ||||||||||
| Diluted net income per common share | $ | 0.81 | $ | 0.59 | $ | 2.69 | $ | 1.94 | ||||||||||
| As adjusted (a): | ||||||||||||||||||
| Basic net income per common share: | ||||||||||||||||||
| Net income | $ | 53,669,000 | $ | 37,257,000 | $ | 170,717,000 | $ | 123,229,000 | ||||||||||
| Income allocated to participating securities | (696,316 | ) | (392,717 | ) | (2,219,701 | ) | (1,308,794 | ) | ||||||||||
| Net income available to common shareholders | $ | 52,972,684 | $ | 36,864,283 | $ | 168,497,299 | $ | 121,920,206 | ||||||||||
| Basic net income per common share | $ | 0.91 | $ | 0.64 | $ | 2.89 | $ | 2.12 | ||||||||||
| Diluted net income per common share: | ||||||||||||||||||
| Net income | $ | 53,669,000 | $ | 37,257,000 | $ | 170,717,000 | $ | 123,229,000 | ||||||||||
| Income allocated to participating securities | (688,528 | ) | (389,481 | ) | (2,194,930 | ) | (1,296,043 | ) | ||||||||||
| Net income available to common shareholders | $ | 52,980,472 | $ | 36,867,519 | $ | 168,522,070 | $ | 121,932,957 | ||||||||||
| Diluted net income per common share | $ | 0.89 | $ | 0.63 | $ | 2.85 | $ | 2.09 | ||||||||||
(a) In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present per share data excluding the adjustments discussed above. The Company has excluded $5.0 million and $9.6 million in after-tax expenses from these results for quarter and fiscal year ended December 29, 2012. The Company has excluded $2.5 million and $9.2 million in after-tax expenses from these results for the quarter and fiscal year ended December 31, 2011, respectively.