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TheStreet Open House

Francesca's Holdings Corporation Reports Fiscal 2012 Second Quarter Results, Increased Guidance For The Full Year 2012 And Senior Leadership Transition Plan

Forward-Looking Statements

Certain statements in this release are "forward-looking statements" made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company's current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected. For a discussion of these and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 21, 2012. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.

About Francesca's Holdings Corporation

Francesca's Collections is a growing specialty retailer with retail locations designed and merchandised to feel like independently owned, upscale boutiques providing customers a fun and differentiated shopping experience. The merchandise assortment is a diverse and balanced mix of apparel, jewelry, accessories and gifts. Francesca's Collections appeals to the 18-35 year-old, fashion conscious, female customers, although the Company finds that women of all ages are attracted to the eclectic and sophisticated merchandise selection and boutique setting. Francesca's Collections' boutiques carry a broad selection but limited quantities of individual styles and new merchandise is introduced five days a week. For additional information on Francesca's, please visit www.francescascollections.com .

 

Francesca's Holdings Corporation
Unaudited Consolidated Statements of Operations
(In thousands, except per share data and percentages)
 
  Thirteen Weeks Ended
  July 28, 2012 July 30, 2011 Variance
  In USD As a % of Net Sales In USD As a % of Net Sales In USD % As a % of Net Sales
Net sales  $ 76,365 100.00% $ 51,221 100.00%  $ 25,144 49.1% 0.00%
Cost of goods sold and occupancy costs  34,549 45.24%  24,220 47.29%  10,329 42.6% (2.05%)
Gross profit  41,816 54.76%  27,001 52.71%  14,815 54.9% 2.05%
Selling, general and administrative expenses  20,931 27.41%  14,394 28.10%  6,537 45.4% (0.69%)
Income from operations  20,885 27.35%  12,607 24.61%  8,278 65.7% 2.74%
Interest expense  (177) (0.23%)  (2,048) (4.00%)  1,871 (91.4%) 3.77%
Loss on early extinguishment of debt —  —   (1,591) (3.11%)  1,591 (100.0%) 3.11%
Other income  115 0.15%  15 0.03%  100 666.7% 0.12%
Income before income tax expense  20,823 27.27%  8,983 17.54%  11,840 131.8% 9.73%
Income tax expense  8,171 10.70%  3,498 6.83%  4,673 133.6% 3.87%
Net earnings  $ 12,652 16.57%  $ 5,485 10.71%  $ 7,167 130.7% 5.86%
               
Diluted earnings (loss) per common share  $ 0.28    $ 0.13        
Weighted average diluted shares outstanding: 44,739   41,513        
           
Change in Comparable Boutique Sales + 20.7% + 5.4%      
   
   
  Twenty Six Weeks Ended
  July 28, 2012 July 30, 2011 Variance
  In USD As a % of Net Sales In USD As a % of Net Sales In USD % As a % of Net Sales
Net sales  $ 137,687 100.00%  $ 92,486 100.00%  $ 45,201 48.9% 0.00
Cost of goods sold and occupancy costs  63,328 45.99%   43,861 47.42%  19,467 44.4% (1.43%)
Gross profit  74,359 54.01%  48,625 52.58%  25,734 52.9% 1.43%
Selling, general and administrative expenses  38,816 28.19%  27,599 29.84%  11,217 40.6% (1.65%)
Income from operations  35,543 25.81%  21,026 22.73%  14,517 69.0% 3.08%
Interest expense  (432) (0.31%)  (4,056) (4.39%)  3,624 (89.3%) 4.08%
Loss on early extinguishment of debt —  —   (1,591) (1.72%)  1,591 (100.0%) 1.72%
Other income  152 0.11%  49 0.05%  103 210.2% 0.06%
Income before income tax expense  35,263 25.61%  15,428 16.68%  19,835 128.6% 8.93%
Income tax expense  13,869 10.07%  6,025 6.51%  7,844 130.2% 3.56%
Net earnings  $ 21,394 15.54%  $ 9,403 10.17%  $ 11,991 127.5% 5.37%
               
Diluted earnings (loss) per common share $0.48   $0.23        
Weighted average diluted shares outstanding: 44,721   41,296        
         
Change in Comparable Boutique Sales + 18.3% + 9.5%    
 
 
Francesca's Holdings Corporation
Unaudited Consolidated Balance Sheets
(In thousands)
 
  July 28, 2012 January 28, 2012 July 30, 2011
       
ASSETS      
       
Current assets:      
Cash and cash equivalents $ 7,312  $ 14,046 $ 13,412
Accounts receivable 6,925  2,156 5,564
Inventories 19,720  14,688 13,809
Deferred income taxes 2,556  2,352 1,722
Prepaid expenses and other current assets 4,195  2,799 2,300
Total current assets 40,708  36,041 36,807
Property and equipment, net 43,687  33,199 30,483
Deferred income taxes 2,200  952
Other assets, net 2,156  2,120 2,431
       
TOTAL ASSETS $ 88,751 $ 72,312 $ 69,721
       
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)      
       
Current liabilities:      
Accounts payable $ 11,621 $ 8,627 $ 8,331
Accrued liabilities 7,623  9,893 5,639
Total current liabilities 19,244  18,520 13,970
Deferred and accrued rents 21,926  14,890 14,602
Deferred income taxes  — 289
Long-term debt 5,000  22,000 41,000
Total liabilities 46,170  55,410 69,861
       
Commitments and contingencies      
       
Stockholders' equity (deficit):      
Common stock -- $.01 par value, 80.0 million shares authorized; 43.8 million shares issued and outstanding at July 28, 2012; 43.5 million shares issued and outstanding at January 28, 2012; 43.5 million shares issued and outstanding at July 30, 2011. 438  435 435
Additional paid-in capital 81,353  77,071 73,127
Accumulated deficit (39,210)  (60,604) (73,702)
Total stockholders' equity (deficit) 42,581  16,902 (140)
       
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 88,751 $ 72,312 $ 69,721
 
 
Francesca's Holdings Corporation
Unaudited Consolidated Statements of Cash Flows
(In thousands)
  Twenty Six Weeks Ended
  July 28, 2012 July 30, 2011
Cash Flows From Operating Activities:    
Net income $ 21,394  $ 9,403
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation expense 3,422 2,154
Stock-based compensation expense 1,648 987
Excess tax benefit from stock-based compensation (1,907) (364)
Loss on sale of assets 20 7
Amortization of debt issuance costs 147 390
Loss on early extinguishment of debt 1,591
Deferred income taxes (1,452) 2,592
Changes in assets and liabilities:    
Accounts receivable (4,769) (1,146)
Inventories (5,032) (1,850)
Prepaid expenses and other assets (1,578) 25
Accounts payable 2,994 2,185
Accrued liabilities (363) (771)
Deferred and accrued rents 7,036 6,379
Net cash provided by operating activities 21,560 21,582
     
Cash Flows Used by Investing Activities:    
Purchase of property and equipment (13,931) (11,374)
Other 30
Net cash used by investing activities (13,931) (11,344)
     
Cash Flows Used by Financing Activities:    
Repayments of borrowings under the prior senior secured credit facility (93,813)
Proceeds from issuance of stock in initial public offering, net of costs 44,118
Proceeds from borrowing under the new revolving credit facility 41,000
Payment of debt issue costs (1,468)
Repayments of borrowings under the new revolving credit facility (17,000)
Proceeds from the exercise of stock options 730 457
Excess tax benefit from stock-based compensation 1,907 364
Net cash used by financing activities (14,363) (9,342)
     
Net increase (decrease) in cash and cash equivalents (6,734) 896
Cash and cash equivalents, beginning of year 14,046 12,516
Cash and cash equivalents, end of period $ 7,312  $ 13,412
     
Supplemental Disclosures of Cash Flow Information:    
Cash paid for income taxes $ 18,328  $ 2,688
Interest paid $ 315  $ 4,979
CONTACT: ICR, Inc.
         Jean Fontana: 646-277-1214
         jean.fontana@icrinc.com

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