COLUMBUS, Ohio, Sept. 13 /PRNewswire-FirstCall/ -- Retail Ventures, Inc. today announced its consolidated financial results for the second quarter ended August 4, 2007.
(Logo: http://www.newscom.com/cgi-bin/prnh/20031208/CLM057LOGO ) -- Total sales for the three months ended August 4, 2007 increased 7.0% to $732.7 million from $684.5 million for the three months ended July 29, 2006. The Company's same store sales increased 0.3% for the comparable three months. Three months ended August 4, July 29, 2007 2006 (in thousands) Total Sales Value City $ 268,095 $ 290,362 DSW 348,718 301,302 Filene's Basement 115,920 92,844 $ 732,733 $ 684,508 Comparable Sales Percentage: Value City (7.3)% (2.2)% DSW 5.9 % 2.2 % Filene's Basement 7.0 % 5.4 % 0.3 % 0.6 % -- Total sales for the six months ended August 4, 2007 increased 5.7% to $1.49 billion from $1.41 billion for the six months ended July 29, 2006. The Company's same store sales decreased 2.6% for the comparable six month period. Six months ended August 4, July 29, 2007 2006 (in thousands) Total Sales: Value City $ 556,330 $ 604,789 DSW 705,715 617,789 Filene's Basement 224,762 183,443 $1,486,807 $1,406,021 Comparable Sales Percentage: Value City (8.0)% 0.2 % DSW 0.9 % 3.2 % Filene's Basement 4.3 % 5.0 % (2.6)% 2.1 % -- Net income for the three months ended August 4, 2007 was $106.2 million, or $2.21 per share on a basic basis and $1.81 per share on a diluted basis, compared to a net loss of $16.0 million, or a negative $0.36 per share on a basic and diluted basis in the second quarter last year. -- Net income for the six months ended August 4, 2007 was $109.0 million, or $2.28 per share on a basic basis and $1.84 per share on a diluted basis, compared to a net loss of $80.9 million, or a negative $1.88 per share on a basic and diluted basis for the six months ended July 29, 2006.
The Company believes 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:
Three months ended Six months ended August 4, July 29, August 4, July 29, 2007 2006 2007 2006 (in thousands, except per share amounts) Operating profit (loss): Non-GAAP operating (loss) profit $ (5,506) $ 11,818 $ 9,817 $ 26,481 Change in fair value of derivative instruments 124,784 (15,343) 137,333 (80,152) GAAP operating profit (loss): 119,278 (3,525) 147,150 (53,671) Net income (loss): Non-GAAP net loss (18,566) (658) (28,375) (797) Change in fair value of derivative instruments 124,784 (15,343) 137,333 (80,152) GAAP net income (loss): 106,218 (16,001) 108,958 (80,949) Basic income (loss) per share: Non-GAAP basic loss per share (0.38) (0.02) (0.60) (0.02) Change in fair value of derivative instruments 2.59 (0.34) 2.88 (1.86) GAAP basic income (loss) per share: 2.21 (0.36) 2.28 (1.88) Diluted income (loss) per share: Non-GAAP diluted loss per share (0.38) (0.02) (0.60) (0.02) Change in weighted average shares outstanding due to Non-GAAP net loss 0.07 0.00 0.12 0.00 Change in fair value of derivative instruments 2.12 (0.34) 2.32 (1.86) GAAP diluted income (loss) per share: $ 1.81 $ (0.36) $ 1.84 $ (1.88)
Retail Ventures, Inc. is a leading off-price retailer operating as of August 4, 2007, 113 Value City Department Stores in the Midwest, mid-Atlantic and southeastern United States, 34 Filene's Basement stores in major metropolitan areas in the Northeast and Midwest and 236 DSW stores located in major metropolitan areas throughout the United States. DSW also supplies shoes, under supply arrangements, to 331 locations for other non-related retailers in the United States.
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 2007 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 success in opening and operating new stores on a timely and profitable basis; 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; disruption of our distribution operations; our dependence on DSW Inc. for key services; failure to retain our key executives or attract qualified new personnel; outcome of the Value City operations strategic analysis; 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 apparel and footwear; and security risks related to our electronic processing and transmission of confidential customer information. 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 4, February 3, July 29, 2007 2007 2006 ASSETS Cash and equivalents $ 165,509 $ 160,221 $ 149,360 Restricted cash 253 511 Short-term investments 100,475 98,650 46,925 Accounts receivable, net 17,768 20,558 20,790 Inventories 582,243 545,584 553,248 Prepaid expenses and other assets 42,559 36,686 27,399 Deferred income taxes 41,817 25,737 78,649 Total current assets 950,624 887,947 876,371 Property and equipment, net 299,604 279,909 261,443 Goodwill 25,899 25,899 25,899 Tradenames and other intangibles, net 32,880 34,976 37,095 Deferred income taxes and other assets 24,832 38,486 8,925 Total assets $1,333,839 $1,267,217 $1,209,733 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable, net $ 292,127 $ 217,336 $ 255,900 Accrued expenses 164,098 179,007 168,321 Warrant liability 99,406 216,400 171,737 Current maturities of long-term obligations 861 765 665 Total current liabilities 556,492 613,508 596,623 Long-term obligations, net of current maturities 274,066 265,783 202,649 Conversion feature of long-term debt 22,819 62,770 Deferred income taxes and other noncurrent liabilities 102,675 95,108 135,972 Minority interest 150,547 138,428 125,502 Total shareholders' equity 227,240 91,620 148,987 Total liabilities and shareholders' equity $1,333,839 $1,267,217 $1,209,733 RETAIL VENTURES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited) Three months ended Six months ended August 4, July 29, August 4, July 29, 2007 2006 2007 2006 Net Sales $ 732,733 $ 684,508 $1,486,807 $1,406,021 Cost of sales (458,073) (409,557) (908,213) (840,445) Gross profit 274,660 274,951 578,594 565,576 Selling, general and administrative expenses (282,537) (264,793) (574,112) (542,317) Change in fair value of derivative instruments 124,784 (15,343) 137,333 (80,152) License fees and other income 2,371 1,660 5,335 3,222 Operating profit (loss) 119,278 (3,525) 147,150 (53,671) Interest expense, net (3,197) (2,343) (6,667) (4,835) Income (loss) before income taxes and minority interest 116,081 (5,868) 140,483 (58,506) Benefit (provision) for income taxes (7,451) (4,473) (20,338) (10,319) Income (loss) before minority interest 108,630 (10,341) 120,145 (68,825) Minority interest (2,412) (5,660) (11,187) (12,124) Net income (loss) $ 106,218 $ (16,001) $ 108,958 $ (80,949) Basic and diluted income (loss) per share: Basic $ 2.21 $ (0.36) $ 2.28 $ (1.88) Diluted $ 1.81 $ (0.36) $ 1.84 $ (1.88) Shares used in per share calculations: Basic 48,157 45,013 47,714 43,037 Diluted 58,776 45,013 59,073 43,037 Same store sales: Value City (7.3)% (2.2)% (8.0)% 0.2 % DSW 5.9 % 2.2 % 0.9 % 3.2 % Filene's Basement 7.0 % 5.4 % 4.3 % 5.0 % Total 0.3 % 0.6 % (2.6)% 2.1 % Store and supply arrangement locations count at end of period: Value City 113 113 DSW 236 205 Filene's Basement 34 26 383 344 Supply arrangement locations 331 214 Total 714 558
The tables below present segment information for the three and six months ended August 4, 2007 and July 29, 2006.
Value Filene's Intersegment City DSW Basement Corporate Eliminations Total (in thousands) Three months ended August 4, 2007 Net Sales $268,095 $348,718 $115,920 $732,733 Operating (loss) profit (11,758) 8,326 (2,074)$124,784 119,278 Depreciation and amortization 5,946 5,684 3,383 783 15,796 Interest expense 3,106 143 1,874 3,153 $(2,038) 6,238 Interest income 96 2,091 15 2,877 (2,038) 3,041 Benefit (provision) for income taxes 5,426 (3,753) 1,117 (10,241) (7,451) Capital expenditures 160 20,546 2,703 50 23,459 As of August 4, 2007 Total assets $418,246 $674,886 $194,296 $325,295 $(278,884) $1,333,839 Value Filene's Intersegment City DSW Basement Corporate Eliminations Total (in thousands) Three months ended July 29, 2006 Net Sales $290,362 $301,302 $92,844 $684,508 Operating (loss) profit (10,112) 23,097 (1,167) $(15,343) (3,525) Depreciation and amortization 6,248 4,891 2,077 700 13,916 Interest expense 3,417 142 1,123 938 $(938) 4,682 Interest income 948 2,117 3 209 (938) 2,339 Benefit (provision) for income taxes 4,286 (9,731) 972 (4,473) Capital expenditures 4,603 8,256 2,988 (2,068) 13,779 As of February 3, 2007 Total assets $438,899 $603,785 $175,287 $328,208 $(278,962) $1,267,217 Value Filene's Intersegment City DSW Basement Corporate Eliminations Total (in thousands) Six months ended August 4, 2007 Net Sales $556,330 $705,715 $224,762 $1,486,807 Operating (loss) profit (24,914) 45,544 (10,813) $137,333 147,150 Depreciation and amortization 11,563 10,874 6,711 1,561 30,709 Interest expense 6,224 281 3,617 6,377 $(4,075) 12,424 Interest income 173 3,948 37 5,674 (4,075) 5,757 Benefit (provision) for income taxes 11,262 (18,946) 5,056 (17,710) (20,338) Capital expenditures 88 39,221 9,272 (16) 48,565 Value Filene's Intersegment City DSW Basement Corporate Eliminations Total (in thousands) Six months ended July 29, 2006 Net Sales $604,789 $617,789 $183,443 $1,406,021 Operating (loss) profit (19,695) 50,986 (4,810) $(80,152) (53,671) Depreciation and amortization 12,497 9,792 4,166 1,302 27,757 Interest expense 6,416 282 2,114 1,798 $(1,798) 8,812 Interest income 1,941 3,581 11 242 (1,798) 3,977 Benefit (provision) for income taxes 8,195 (21,425) 2,911 (10,319) Capital expenditures 4,771 12,488 3,578 (1,588) 19,249
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