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Francesca's Reports First Fiscal Quarter 2013 Financial Results

Stocks in this article: FRAN

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 on March 22, 2013. 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® 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. Today francesca's® operates 429 boutiques in 44 states and also serves its customers through francescas.com. For additional information on francesca's®, please visit www.francescas.com .

Francesca's Holdings Corporation
Consolidated Statements of Operations
               
               
               
  Thirteen Weeks Ended
   May 4, 2013 April 28, 2012 Variance
  In USD As a % of Net Sales (1) In USD As a % of Net Sales (1) In USD % Basis Points
  (In thousands except per share data)
Net sales  $78,987 100.0% $61,322 100.0% $17,665 29% 0.0%
Cost of goods sold and occupancy costs  37,615 47.6% 28,779 46.9% 8,836 31% 0.7%
Gross profit  41,372 52.4% 32,543 53.1% 8,829 27% (0.7)%
Selling, general and administrative expenses  23,351 29.6% 17,885 29.2% 5,466 31% 0.4%
Income from operations  18,021 22.8% 14,658 23.9% 3,363 23% (1.1)%
Interest expense  (116) (0.1)% (255) (0.4)% 139 (55)% 0.3%
Other income  83 0.1% 37 0.1% 46 124% 0.0%
Income before income tax expense  17,988 22.8% 14,440 23.5% 3,548 25% (0.7)%
Income tax expense  7,051 8.9% 5,698 9.3% 1,353 24% (0.4)%
Net income  $10,937 13.8% $8,742 14.3% $2,195 25% (0.5)%
               
Diluted earnings (loss) per common share  $0.24   $0.20        
Weighted average diluted shares outstanding: 44,880   44,702        
Comparable sales change 2% 16%      
               
(1) Percentage totals in the above table may not equal the sum of the components due to rounding.    
     
Francesca's Holdings Corporation Consolidated Balance Sheets (In thousands)
       
       
  May 4, 2013 February 2, 2013 April 28, 2012
       
ASSETS      
       
Current assets:      
Cash and cash equivalents  $33,763 $29,877 $8,221
Accounts receivable  7,645 2,504 6,479
Inventories  23,330 19,049 17,642
Deferred income taxes  3,567 3,506 2,456
Prepaid expenses and other current assets  4,772 4,749 3,248
       
Total current assets  73,077 59,685 38,046
Property and equipment, net  55,729 49,559 38,205
Deferred income taxes  2,893 2,357 2,200
Other assets, net  1,383 1,573 2,069
       
       
TOTAL ASSETS $133,082 $113,174 $80,520
       
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
       
Current liabilities:      
Accounts payable  $8,623 $8,358 $10,077
Accrued liabilities  14,010 10,667 11,458
       
Total current liabilities  22,633 19,025 21,535
Deferred and accrued rents  26,151 22,092 19,245
Long-term debt  —  12,000
       
Total liabilities  48,784 41,117 52,780
       
       
Commitments and contingencies      
       
Stockholders' equity:      
Common stock -- $.01 par value, 80.0 million shares authorized; 44.0 million shares issued and outstanding at May 4, 2013; 43.9 million shares issued and outstanding at February 2, 2013; 43.6 million shares issued and outstanding at April 28, 2012.  440 439 436
Additional paid-in capital  86,464 85,161 79,166
Accumulated deficit  (2,606) (13,543) (51,862)
       
Total stockholders' equity  84,298 72,057 27,740
       
       
Total liabilities and stockholders' equity  $133,082 $113,174 $80,520
 
Francesca's Holdings Corporation
Consolidated Statements of Cash flows
(In thousands)
     
     
     
  Thirteen Weeks Ended
  May 4, 2013 April 28, 2012
     
Cash Flows From Operating Activities:    
Net income  $10,937 $8,742
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation expense  2,237 1,607
Stock-based compensation expense  990 734
Excess tax benefit from stock-based compensation  (2,373) (1,014)
Loss on sale of assets  110 7
Amortization of debt issuance costs  73 73
Deferred income taxes  (597) (1,352)
Changes in assets and liabilities:    
Accounts receivable  (5,141) (4,045)
Inventories  (4,281) (3,180)
Prepaid expenses and other assets  93 (245)
Accounts payable  265 1,172
Accrued liabilities  5,717 2,579
Deferred and accrued rents  4,059 4,355
     
Net cash provided by operating activities  12,089 9,433
     
     
Cash Flows Used in Investing Activities:    
Purchase of property and equipment  (8,517) (6,620)
     
Net cash used in investing activities  (8,517) (6,620)
     
     
Cash Flows Provided by (Used in) Financing Activities:    
Repayments of borrowings under the revolving credit facility  (10,000)
Proceeds from the exercise of stock options  221 348
Taxes paid related to net settlement of equity awards  (2,280)
Excess tax benefit from stock-based compensation  2,373 1,014
     
Net cash provided by (used in) financing activities  314 (8,638)
     
     
Net increase (decrease) in cash and cash equivalents  3,886 (5,825)
Cash and cash equivalents, beginning of year  29,877 14,046
     
Cash and cash equivalents, end of period $33,763 $8,221
     
     
Supplemental Disclosures of Cash Flow Information:    
Cash paid for income taxes  $2,372 $4,661
Interest paid  $40 $210
CONTACT: Investors
         
         ICR, Inc.
         Jean Fontana
         646-277-1214
         
         Company
         Randi Sonenshein, Vice President,
         Finance and Investor Relations
         832-494-2250

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