COLUMBUS, Ohio, Dec. 13 /PRNewswire-FirstCall/ -- Retail Ventures, Inc. today announced its consolidated financial results for the third quarter ended November 3, 2007.
(Logo: http://www.newscom.com/cgi-bin/prnh/20031208/CLM057LOGO ) -- Total sales for the three months ended November 3, 2007 were $787.8 million compared to $787.6 million for the three months ended October 28, 2006. The Company's same store sales decreased 7.3% for the comparable three month period. Three months ended November 3, October 28, 2007 2006 (in thousands) Total Sales: Value City $ 298,447 $ 341,205 DSW 367,380 332,219 Filene's Basement 122,014 114,195 $ 787,841 $ 787,619 Comparable Sales Percentage: Value City (13.4)% 1.4 % DSW (3.0)% 2.6 % Filene's Basement 1.2 % 4.5 % (7.3)% 2.3 % -- Total sales for the nine months ended November 3, 2007 increased 3.7% to $2.27 billion from $2.19 billion for the nine months ended October 28, 2006. The Company's same store sales decreased 4.2% for the comparable nine month period. Nine months ended November 3, October 28, 2007 2006 (in thousands) Total Sales: Value City $ 854,777 $ 945,994 DSW 1,073,095 950,008 Filene's Basement 346,776 297,638 $ 2,274,648 $ 2,193,640 Comparable Sales Percentage: Value City (10.0)% 0.6 % DSW (0.5)% 3.0 % Filene's Basement 3.3 % 4.8 % (4.2)% 2.1 % -- Net income for the three months ended November 3, 2007 was $68.2 million, or $1.40 per share on a basic basis and $1.20 per share on a diluted basis, compared to a net loss of $34.1 million, or a negative $0.72 per share on a basic and diluted basis in the third quarter last year. -- Net income for the nine months ended November 3, 2007 was $177.2 million, or $3.69 per share on a basic basis and $3.04 per share on a diluted basis, compared to a net loss of $115.0 million, or a negative $2.59 per share on a basic and diluted basis for the nine months ended October 28, 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 Nine months ended November 3, October 28, November 3, October 28, 2007 2006 2007 2006 (in thousands, except per share amounts) Operating profit (loss): Non-GAAP operating profit $ 10,260 $ 15,782 $ 20,077 $ 42,263 Change in fair value of derivative instruments 91,347 (30,574) 228,680 (110,726) GAAP operating profit (loss): 101,607 (14,792) 248,757 (68,463) Net income (loss): Non-GAAP net loss (23,125) (3,500) (51,500) (4,297) Change in fair value of derivative instruments 91,347 (30,574) 228,680 (110,726) GAAP net income (loss): 68,222 (34,074) 177,180 (115,023) Basic income (loss) per share: Non-GAAP basic loss per share (0.48) (0.07) (1.07) (0.09) Change in fair value of derivative instruments 1.88 (0.65) 4.76 (2.50) GAAP basic income (loss) per share: 1.40 (0.72) 3.69 (2.59) Diluted income (loss) per share: Non-GAAP diluted loss per share (0.48) (0.07) (1.07) (0.09) Change in weighted average shares outstanding due to Non-GAAP net loss 0.07 0.00 0.19 0.00 Change in fair value of derivative instruments 1.61 (0.65) 3.92 (2.50) GAAP diluted income (loss) per share: $ 1.20 $ (0.72) $ 3.04 $ (2.59)
Retail Ventures, Inc. is a leading off-price retailer operating as of November 3, 2007, 113 Value City Department Stores in the Midwest, mid-Atlantic and southeastern United States, 36 Filene's Basement stores in major metropolitan areas in the Northeast and Midwest and 250 DSW stores located in major metropolitan areas throughout the United States. DSW also supplies shoes, under supply arrangements, to 339 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: uncertainty as to whether we will consummate a significant transaction for Value City or instead discontinue its operations, and the ability of RVI to continue to meet its obligations and continue operations in the event of a significant transaction or discontinuance of Value City operations; whether the outcome of the Value City strategic analysis will create an event of default or accelerate our obligations under the PIES or the VCDS Revolving Loan; 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; 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 the 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) November 3, February 3, October 28, 2007 2007 2006 ASSETS Cash and equivalents $ 145,722 $ 160,221 $ 184,026 Restricted cash 255 511 500 Short-term investments 94,700 98,650 75,350 Accounts receivable, net 17,866 20,558 26,515 Inventories 656,412 545,584 643,976 Prepaid expenses and other assets 43,375 36,686 33,442 Deferred income taxes 43,620 25,737 85,780 Total current assets 1,001,950 887,947 1,049,589 Property and equipment, net 317,905 279,909 266,907 Goodwill 25,899 25,899 25,899 Tradenames and other intangibles, net 31,822 34,976 36,034 Deferred income taxes and other assets 35,301 38,486 11,493 Total assets $ 1,412,877 $ 1,267,217 $ 1,389,922 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable, net $ 310,868 $ 217,336 $ 317,664 Accrued expenses 153,250 179,007 193,328 Warrant liability 50,690 216,400 174,267 Current maturities of long-term obligations 882 765 715 Total current liabilities 515,690 613,508 685,974 Long-term obligations, net of current maturities 317,340 265,783 271,033 Conversion feature of long-term debt 62,770 39,673 Deferred income taxes and other noncurrent liabilities 122,090 95,108 143,635 Minority interest 159,272 138,428 131,859 Total shareholders' equity 298,485 91,620 117,748 Total liabilities and shareholders' equity $ 1,412,877 $ 1,267,217 $ 1,389,922 RETAIL VENTURES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited) Three months ended Nine months ended November 3, October 28, November 3, October 28, 2007 2006 2007 2006 Net Sales $ 787,841 $ 787,619 $2,274,648 $2,193,640 Cost of sales (479,020) (472,090) (1,387,233) (1,312,535) Gross profit 308,821 315,529 887,415 881,105 Selling, general and administrative expenses (301,711) (301,939) (875,823) (844,256) Change in fair value of derivative instruments 91,347 (30,574) 228,680 (110,726) License fees and other income 3,150 2,192 8,485 5,414 Operating profit (loss) 101,607 (14,792) 248,757 (68,463) Interest expense, net (3,518) (9,962) (10,185) (14,797) Income (loss) before income taxes and minority interest 98,089 (24,754) 238,572 (83,260) Provision for income taxes (21,572) (3,411) (41,910) (13,730) Income (loss) before minority interest 76,517 (28,165) 196,662 (96,990) Minority interest (8,295) (5,909) (19,482) (18,033) Net income (loss) $ 68,222 $ (34,074) $ 177,180 $ (115,023) Basic and diluted income (loss) per share: Basic $ 1.40 $ (0.72) $ 3.69 $ (2.59) Diluted $ 1.20 $ (0.72) $ 3.04 $ (2.59) Shares used in per share calculations: Basic 48,616 47,053 48,014 44,376 Diluted 56,655 47,053 58,267 44,376 Same store sales: Value City (13.4)% 1.4 % (10.0)% 0.6% DSW (3.0)% 2.6 % (0.5)% 3.0% Filene's Basement 1.2 % 4.5 % 3.3 % 4.8% Total (7.3)% 2.3 % (4.2)% 2.1% Store and supply arrangement locations count at end of period: Value City 113 113 DSW 250 215 Filene's Basement 36 30 399 358 Supply arrangement locations 339 225 Total 738 583
The tables below present segment information for the three and nine months ended November 3, 2007 and October 28, 2006.
Value Filene's Intersegment City DSW Basement Corporate Eliminations Total (in thousands) Three months ended November 3, 2007 Net Sales $298,447 $367,380 $122,014 $787,841 Operating (loss) profit (19,368) 34,805 (5,177) $ 91,347 101,607 Depreciation and amortization 5,607 6,277 3,023 916 15,823 Interest expense (income), net 2,972 (1,533) 1,841 238 3,518 Benefit (provision) for income taxes 8,130 (13,906) 2,577 (18,373) (21,572) Capital expenditures 735 30,853 5,416 (746) 36,258 As of November 3, 2007 Total assets $397,262 $680,734 $202,606 $411,158 $(278,883) $1,412,877 Value Filene's Intersegment City DSW Basement Corporate Eliminations Total (in thousands) Three months ended October 28, 2006 Net Sales $341,205 $332,219 $114,195 $787,619 Operating (loss) profit (11,343) 25,224 1,901 $(30,574) (14,792) Depreciation and amortization 6,100 4,409 2,170 635 13,314 Interest expense (income), net 7,933 (1,563) 2,876 716 9,962 Benefit (provision) for income taxes 8,290 (10,786) (717) (198) (3,411) Capital expenditures 2,068 9,309 6,205 419 18,001 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) Nine months ended November 3, 2007 Net Sales $854,777 $1,073,095 $346,776 $2,274,648 Operating (loss) profit (44,282) 80,349 (15,990) $228,680 248,757 Depreciation and amortization 17,170 17,151 9,734 2,477 46,532 Interest expense (income), net 9,023 (5,200) 5,421 941 10,185 Benefit (provision) for income taxes 19,392 (32,852) 7,633 (36,083) (41,910) Capital expenditures 823 70,074 14,688 (762) 84,823 Value Filene's Intersegment City DSW Basement Corporate Eliminations Total (in thousands) Nine months ended October 28, 2006 Net Sales $945,994 $950,008 $297,638 $2,193,640 Operating (loss) profit (31,038) 76,210 (2,909) $(110,726) (68,463) Depreciation and amortization 18,597 14,201 6,336 1,937 41,071 Interest expense (income), net 12,407 (4,862) 4,979 2,273 14,797 Benefit (provision) for income taxes 16,485 (32,211) 2,194 (198) (13,730) Capital expenditures 6,839 21,798 9,783 (1,170) 37,250
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