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True Religion Apparel Announces Fourth Quarter And Full Year 2012 Financial Results And Introduces Full Year 2013 Guidance

Year Ended 2012 Financial Results

  • Total net sales for the year ended December 31, 2012 increased to $467.3 million, an 11.3% increase as compared to the year ended December 31, 2011. Net sales for the Company’s U.S. Consumer Direct segment increased 12.0% to $281.6 million, and same-store sales for the year ended 2012 increased 2.7%. Net sales for the Company’s U.S. Wholesale segment totaled $99.2 million, a 15.0% increase as compared to the prior year, driven by increases in sales to the Off-Price and Specialty Store channels, which was partially offset by a decrease in sales to Major accounts. Net sales for the Company’s International segment for the year increased to $83.8 million, or 6.1% as compared to the year ended December 31, 2011.
  • Gross profit increased 10.2% to $299.5 million, and gross margin decreased by 70 basis points to 64.1% as compared to the year ended December 31, 2011.
  • SG&A expense increased 12.3% to $221.4 million from $197.2 million in the prior year, and as a percentage of net sales increased to 47.4% from 47.0% in the prior year. The increase primarily reflects the opening and operating of 28 new branded stores in 2012. Included in SG&A for the year ended December 31, 2012 were costs associated with the review of strategic alternatives of $1.0 million. Included in SG&A for the year ended December 31, 2011 were net separation costs of $1.2 million associated with the resignation of a former executive.
  • Operating income increased 4.7% to $78.1 million, or 16.7% of net sales, versus $74.6 million or 17.8% of net sales in the prior year.
  • Net income attributable to True Religion Apparel, Inc. was $46.0 million, or $1.82 per diluted share based on weighted average shares outstanding of 25.3 million, as compared to $45.0 million, or $1.80 per diluted share based on weighted average shares outstanding of 25.0 million in the prior year.
  • Excluding the costs associated with the review of strategic alternatives and separation costs described above, 2012 adjusted net income attributable to True Religion Apparel, Inc. was $46.6 million, or $1.84 per diluted share, compared to $45.7 million, or $1.83 per diluted share in 2011.

Balance Sheet and Liquidity

As of December 31, 2012, the Company had $76.8 million of cash and cash equivalents and $140.8 million of short and long-term investments, which combined equals $217.6 million. As of December 31, 2011, the Company had $200.4 million of cash and cash equivalents. The Company paid its regular fourth quarter dividend, aggregating $5.2 million, on December 27, 2012, which impacted cash balances at December 31, 2012. The Company ended the year with no long-term borrowings. The inventory balance as of December 31, 2012 was $65.7 million, a 23.1% increase from December 31, 2011. This increase is primarily the result of an expanded retail store count from 125 retail stores at December 31, 2011 to 152 retail stores at December 31, 2012.

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