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Teavana Holdings, Inc. Announces Second Quarter Fiscal 2012 Financial Results

Highlights for fiscal year-to-date:

  • Net sales increased by 32% to $87.4 million from $66.3 million in the prior year period. Net sales includes $2.0 million of net sales from the 46 Teaopia stores acquired on June 11, 2012.
  • The Company opened 38 new stores and acquired 46 Teaopia stores to end the period with 284 company-owned stores.
  • Comparable sales increased by 2.5%. Comparable sales include e-commerce and exclude the acquired Teaopia stores.
  • Income from operations, which includes a loss from Teaopia of $2.3 million, was $5.9 million as compared to $8.8 million in the prior year period. The Teaopia loss was driven by a $0.8 million loss from operations and $1.5 million in one-time transaction and integration expenses.
  • Net income, which includes a loss from Teaopia of $1.4 million after tax, was $3.4 million as compared to $4.4 million in the prior year period. The Teaopia loss was driven by a $0.5 million after tax loss from operations and $0.9 million after tax in one-time transaction and integration expenses.
  • Net income per diluted share, which includes a loss from Teaopia of $0.03 per diluted share, was $0.09 per diluted share as compared to $0.12 per diluted share in the prior year period. The Teaopia loss was driven by a $0.01 per diluted share loss from operations and $0.02 per diluted share in one-time transaction and integration expenses.

Balance sheet highlights as of July 29, 2012:

  • The Company had $9.5 million in credit facility borrowings and $40.5 million of availability on the credit facility at the end of the second quarter of fiscal 2012, compared to $5.4 million in borrowings and $34.6 million of availability at the end of the second quarter of fiscal 2011.
  • Inventory was $24.9 million at the end of the second quarter of fiscal 2012. Excluding Teaopia, inventory was $23.8 million as compared to $22.7 million at the end of the second quarter of fiscal 2011.

Outlook:

  • For fiscal 2012, net sales including Teaopia are expected to be in the range of $222 million to $231 million based on opening 60 new stores and an increase in comparable sales, including e-commerce and excluding Teaopia, in the low single digit range. Net sales from the acquired Teaopia stores are expected to be in the range of $14 million to $16 million. Net income, including Teaopia, is expected to be in the range of $20.8 million to $21.8 million, or $0.53 to $0.55 per diluted share, based on 39.4 million shares, compared to net income of $17.8 million, or $0.46 per diluted share, based on 38.4 million shares in fiscal 2011. Teaopia is expected to reduce net income per diluted share by $0.03, driven by a neutral impact from operations and $0.03 per diluted share in one-time transaction and integration expenses.
  • For the third quarter of fiscal 2012, net sales including Teaopia are expected to be in the range of $42 million to $45 million based on opening 15 new stores and an increase in comparable sales, including e-commerce and excluding Teaopia, in the low single digit range. Net sales from the acquired Teaopia stores are expected to be in the range of $3 million to $4 million. Net loss, including Teaopia, is expected to be in the range of $0.8 million to $1.2 million, or $0.02 to $0.03 per diluted share, based on 38.6 million shares, compared to net income of $0.9 million, or $0.02 per diluted share based on 39.0 million shares in fiscal 2011. Teaopia is expected to increase net loss per diluted share in the range of $0.04 to $0.05, driven by a $0.03 to $0.04 per diluted share loss from operations and $0.01 per diluted share in one-time transaction and integration expenses.

Conference Call Information:

A conference call to discuss the second quarter of fiscal 2012 financial results is scheduled for today, September 4, 2012, at 5:00 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (888) 277-7112 (International (913) 312-0641) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at www.teavana.com in the investor relations section of the website.

A taped replay of the conference call will be available within two hours of the conclusion of the call and can be accessed both online and by dialing (877) 870-5176 for domestic callers and (858) 384-5517 for international callers. The pin number to access the telephone replay is 8407655. The replay will be available until September 11, 2012.

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