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

Conference Call Information:

Due to the pending acquisition by Starbucks, the Company will not host a conference call.

About Teavana:

Teavana is a specialty retailer offering more than 100 varieties of premium loose-leaf teas, authentic artisanal teawares and other tea-related merchandise through 301 company-owned stores and on its website. Founded in 1997, the company offers new tea enthusiasts and tea connoisseurs alike its “Heaven of Tea” retail experience where passionate and knowledgeable “teaologists” engage and educate them about the ritual and enjoyment of tea. The company’s mission is to establish Teavana as the most recognized and respected brand in the tea industry by expanding the culture of tea across the world. To support the tea culture globally, Teavana donates approximately 1% of annual net profits to the Cooperative for Assistance and Relief Everywhere, Inc., or “CARE,” through its Teavana Equatrade program. For more information, visit www.teavana.com.

Forward-Looking Statements:

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect management’s current views and estimates regarding our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. You can identify these statements by the fact that they use words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future” and similar terms and phrases. We cannot assure you that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to risks relating to our strategy and expansion plans, the availability of suitable new store locations, risks that consumer spending may decline and that U.S., Canadian and global macroeconomic conditions may worsen, risks related to our continued retention of our senior management and other key personnel, risks relating to changes in consumer preferences and economic conditions, risks relating to our distribution center, quality or health concerns about our teas and tea-related merchandise, events that may affect our vendors, increased competition from other tea and beverage retailers, risks relating to trade restrictions, risks associated with leasing substantial amounts of space, risks relating to our pending acquisition by Starbucks, including uncertainties as to the timing of the merger, the possibility that various closing conditions for the transaction may not be satisfied or waived, and the effects of disruption from the transaction on relationships with employees, customers and business partners, and other factors that are set forth in the Company’s filings with the Securities and Exchange Commission (“SEC”), including risk factors in our Annual Report on Form 10-K filed with the SEC and available at www.sec.gov and in all filings with the SEC made by us subsequent to the filing of the Form 10-K. Other factors that could change expected outcomes include our ability to integrate Teaopia’s operations as planned and the continued performance of its locations as planned. If one or more of these risks or uncertainties materialize, or if any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements. Any forward-looking statement made by us in this news release speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

Teavana Holdings, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income / (Loss)
(unaudited)
(dollars in thousands, except per share data)
         
Thirteen Weeks Ended Thirty-Nine Weeks Ended
October 28, 2012 October 30, 2011 October 28, 2012 October 30, 2011
 
Net sales $ 46,037 $ 33,426 $ 133,436 $ 99,679
Cost of goods sold (exclusive of depreciation shown separately below)   20,320     12,749   54,089   37,386
Gross profit 25,717 20,677 79,347 62,293
Selling, general and administrative expense 25,349 17,511 69,158 47,636
Depreciation and amortization expense   2,585     1,554   6,530   4,257
Income / (loss) from operations (2,217 ) 1,612 3,659 10,400
Interest expense, net   238     122   441   1,553
Income / (loss) before income taxes (2,455 ) 1,490 3,218 8,847
Provision for / (benefit from) income taxes (1,040 ) 554 1,278 3,556
 

 

     

 

 
Net income / (loss) $ (1,415 ) $ 936 $ 1,940 $ 5,291
Other comprehensive income
Net gain on foreign currency translation   168     -   641   -
Comprehensive income / (loss) $ (1,247 ) $ 936 $ 2,581 $ 5,291
 
Net income / (loss) per share:
Basic $ (0.04 ) $ 0.02 $ 0.05 $ 0.14
Diluted $ (0.04 ) $ 0.02 $ 0.05 $ 0.14
 
Weighted average shares outstanding:
Basic 38,632,149 38,138,070 38,496,953 37,216,444
Diluted 38,632,149 38,965,104 39,152,380 38,029,119
 
 
Teavana Holdings, Inc
Condensed Consolidated Balance Sheets
(dollars in thousands, except per share data)
   
October 28, 2012 January 29, 2012
Assets (unaudited)
Current assets
Cash and cash equivalents $ 908 $ 17,818
Prepaid expenses 6,099 3,995
Income tax receivable 2,211 -
Inventory 34,627 25,676
Other current assets   3,592     2,175  
Total current assets 47,437 49,664
Property and equipment, net 63,510 42,785
Intangible assets, net 1,183 -
Goodwill 20,698 2,394
Other non-current assets 672 775
   
Total assets $ 133,500   $ 95,618  
 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 8,261 $ 3,898
Income taxes payable - 1,821
Other current liabilities   12,223     6,847  
Total current liabilities 20,484 12,566
Long-term liabilities
Deferred rent 16,835 12,905
Deferred tax liability, non-current 2,420 2,570
Long-term debt 19,627 -
Other long-term liabilities   722     575  
Total long-term liabilities   39,604     16,050  
Total liabilities   60,088     28,616  
 
Commitments and contingencies
Stockholders’ equity
Common stock, $0.00003 par value;
100,000,000 shares authorized as of October
28, 2012 and January 29, 2012; 38,685,783
shares and 38,281,836 shares issued and
outstanding as of October 28, 2012 and
January 29, 2012, respectively 1 1
Additional paid-in capital 280,611 276,782
Accumulated deficit (207,852 ) (209,792 )
Accumulated other comprehensive income   652     11  
Total stockholders’ equity   73,412     67,002  
Total liabilities and stockholders’ equity $ 133,500   $ 95,618  




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