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Recent Developments
-- On August 13, 2009, Charming Shoppes announced it had entered into an
agreement for the sale of its credit card receivables program to
Alliance Data Systems Corporation, and expects to receive net cash
proceeds of approximately $110 million related to the transaction at
closing. Charming Shoppes and Alliance Data have also entered into a
ten-year operating agreement for the servicing of Charming Shoppes'
private label credit card receivables program. The benefits of the
transaction include the removal of financing risk associated with the
credit card receivable securitization program and the credit risk of the
underlying credit card portfolio. The Company expects the transaction
to be non-dilutive, and to close before the end of the year, subject to
attaining certain customary regulatory approvals.
-- On August 3, 2009, Charming Shoppes announced it had entered into a
three-year loan agreement through July 2012 for a new senior secured
revolving credit facility in the amount of $225 million.
Results for the quarter, compared to the same quarter of the prior year, include:
-- A net sales decrease of $121.4 million or 18.7%, reflecting a 14%
decrease in comparable store sales and the impact of net store closings.
Same store inventories decreased 18%;
-- Gross Profit was $263.9 million in the quarter, a decrease of $39.0
million, related to lower net sales, and somewhat offset by improvement
in gross margin. Gross margin improved 330 basis points to 50.0% of
sales, compared to 46.7% in the year ago period;
-- Decreases in total operating expenses (excluding restructuring charges)
of $39.5 million or 13.5%;
-- Income from operations was $10.3 million, excluding restructuring
charges of $7.8 million, reflecting a year over year increase of 5.7%
compared to income from operations of $9.8 million, excluding
restructuring charges of $14.9 million, in the prior year period (refer
to GAAP to non-GAAP reconciliation, below);
-- Net income was $5.0 million in the quarter, or $0.04 per diluted share,
compared to a net loss of $(10.7) million or $(0.09) per diluted share
in the year ago period. The current year's results include
restructuring charges offset by a gain on the repurchase of debt; the
prior year's results include restructuring charges and a loss from
discontinued operations.
-- Total liquidity was $316 million, including $117 million in cash and
$199 million of net availability on the Company's undrawn committed
line of credit;
-- The repurchase of $38.2 million face value of the Company's 1.125%
Convertible Notes due 2014 (the "Notes") during the quarter,
at a cost of $21.0 million. In aggregate, as of August 25, 2009, the
Company has repurchased $51.7 million of Notes at a cost of $26.6
million.
Jim Fogarty, President and Chief Executive Officer of Charming Shoppes, Inc., said, "In August, we were pleased to announce the completion of two key initiatives - the signing of an agreement to sell our credit card business and the completion of our revolver refinancing. In addition, last week, we launched brand new websites at lanebryant.com, fashionbug.com, and catherines.com. The new online stores represent fresh and upgraded e-commerce platforms to support our core brands.
Fogarty continued, "Our consolidated results for the quarter continued to reflect a difficult retail environment, delivering both disappointing comparable store sales and earning power. Our sales reflected negative but generally improving comps to last quarter at our Lane Bryant and Catherines brands, as we made progress on more balanced and compelling assortments. Our Fashion Bug brand had a difficult second quarter with spring and summer assortments that were not compelling to our consumer; however, our assortments did not yet reflect our new product leadership. On profitability for the quarter, we were able to offset volume declines with disciplined inventory management, gross margin improvement, and reductions in both SG&A and Occupancy expense. Finally, we are positioned for the third quarter with much less seasonal carry-over inventory than in the prior year.
"We are focused on continuing improvements in our Lane Bryant and Catherines businesses and on stabilizing our Fashion Bug brand. Further, we remain committed to our five key priorities:
-- Focus on the Consumer;
-- Stabilize and Begin to Grow Profitable Revenue;
-- Increase EBITDA;
-- Increase Cash Flow, and;
-- Employee Empowerment with Accountability."
Beginning with the three and six month periods ended August 1, 2009, the Company has changed its financial statement presentation to report Cost of Goods Sold, Occupancy and Buying, and Depreciation and Amortization separately.
Additionally, the Company's fiscal year designations will now be aligned with the calendar years. Results for the current fiscal year ending January 30, 2010 are reported as Fiscal Year 2009. Results for the last fiscal year ended January 31, 2009 refer to Fiscal Year 2008, and so forth.
Second Quarter Consolidated Results
-- Net sales from continuing operations for the three months ended August
1, 2009 decreased $121.4 million or 18.7% to $527.2 million, compared to
$648.6 million for the three months ended August 2, 2008. The decrease
in sales was primarily as a result of a comparable store sales decrease
of 14% and the impact of 120 store closings and 21 store openings during
the last four quarters. Comparable store sales declined 13%, 18% and 9%
at the Company's Lane Bryant, Fashion Bug and Catherines brands,
respectively.
-- Gross Profit decreased $39.0 million or 12.9% to $263.9 million in the
second quarter, compared to $302.8 million in the same quarter last
year, primarily related to lower sales volumes, somewhat offset by
improvement in the gross margin rate. Gross margin improved by 330
basis points to 50.0% for the quarter ended August 1, 2009, compared to
46.7% for the quarter ended August 2, 2008, as a result of lean
inventories and reduced markdowns on spring and summer seasonal
merchandise.
-- Occupancy and Buying expense decreased $5.5 million, or 5.2%, related to
the operation of fewer stores and occupancy reductions secured, somewhat
offset by increases in buying costs.
-- Selling, general and administrative expense decreased $30.2 million or
18.4% to $134.3 million in the second quarter, compared to $164.5
million in the same quarter last year, primarily related to expense
reduction initiatives and the closing of under-performing stores.
SG&A expense, as a percent of sales, was 25.5% and essentially flat
year over year.
-- Depreciation and Amortization expense decreased $3.8 million or 16.5% to
$19.2 million in the quarter, compared to $23.0 million in the same
quarter last year, primarily related to operating fewer stores than in
the year ago period. D&A expense, as a percent of sales, was 3.6%
and essentially flat year over year.
-- Restructuring charges of $7.8 million recorded during the quarter ended
August 1, 2009 primarily represented costs related to the Company's
transformational initiatives and accelerated depreciation on
discontinued or divested catalog businesses. $3.3 million of these
charges were non-cash charges. Restructuring charges of $14.9 million
recorded during the quarter ended August 2, 2008 primarily included
charges related to the severance agreement between Charming Shoppes and
its former Chief Executive Officer and to previously announced
consolidation and streamlining initiatives.
-- Income from operations was $10.3 million, excluding restructuring
charges of $7.8 million, and represented a 5.7% year over year increase
on an 18.7% sales decline. The prior year period was $9.8 million,
excluding restructuring charges of $14.9 million. (Refer to GAAP to
non-GAAP reconciliation, below.)
-- The Company's interest expense of $4.5 million included $2.6
million of non-cash interest expense, related to the adoption of FSP APB
14-1 during the first quarter of the current fiscal year.
-- The tax provision for the second quarter primarily represents certain
state and foreign income taxes, as well as required deferred taxes, due
to the Company continuing to have a valuation allowance recorded against
its net deferred tax assets.
-- Net income was $5.0 million, or $0.04 per diluted share, compared to a
net loss of $(10.7) million or $(0.09) per diluted share in the year ago
period. The current year's results include restructuring charges
offset by a gain on the repurchase of debt; the prior year's
results include restructuring charges of $14.9 million ($9.3 million,
after-tax) or $(0.08) per diluted share and a loss from discontinued
operations of $5.2 million or $(0.05) per diluted share.
Commenting on the quarter and the Company's liquidity, Eric M. Specter, Executive Vice President and Chief Financial Officer, said, "Effective with today's quarterly report, we have changed the presentation of our financial statements to provide additional detail about our operating performance. This change is intended to improve transparency and disclosure.
"Our balance sheet remained strong, and our total liquidity increased to $316 million. Our strong liquidity allowed us to opportunistically repurchase $38.2 million of Notes at a 45% discount for a cash purchase price of $21.0 million. Our liquidity at the end of the quarter includes $117 million in cash and net availability of $199 million on our fully committed and undrawn $225 million line of credit. We remain vigilant in the management of our inventories and operating expenses, and continue to take a conservative planning approach during this difficult economic environment."
For the six months ended August 1, 2009, the Company reported a loss from continuing operations of $(1.6) million or $(0.01) per diluted share, which includes net charges of $(0.04) per diluted share related to restructuring charges and a gain on the repurchase of debt. This compares to a loss from continuing operations for the six months ended August 2, 2008 of $(6.5) million or $(0.06) per diluted share, which included restructuring charges of $(0.10) per diluted share. Non-cash interest expense, related to the adoption of FSP APB 14-1, represented $(0.05) per diluted share in the six month period ended August 1, 2009 and $(0.03) per diluted share in the six month period ended August 2, 2008.
Sales results for the three month periods ended August 1, 2009 and August 2, 2008 were:
Net Sales Net Sales Total Comparable Store
for the for the Net Sales Change
Three Months Three Months Sales for the
Ended 8/1/09 Ended 8/2/08 Change Three Months
-------------- ------------ ------ Ended 8/1/09
($in millions)($in millions) (%) ---------------
Lane Bryant Stores(1) $246.9 $285.4 -13% -13%
Fashion Bug Stores 189.4 246.9 -23% -18%
Catherines Stores 77.1 83.6 -8% -9%
Catalog Sales 6.3 22.5 -72% NA
Other (2) 7.5 10.2 -26% NA
------------ --- ---- --- --
Consolidated $527.2 $648.6 -19% -14%
Sales results for the six month periods ended August 1, 2009 and August 2, 2008 were:
Net Sales Net Sales Total Comparable Store
for the for the Net Sales Change
Six Months Six Months Sales for the
Ended 8/1/09 Ended 8/2/08 Change Six Months
-------------- ------------ ------ Ended 8/1/09
($in millions)($in millions) (%) ---------------
Lane Bryant Stores(1) $500.7 $582.4 -14% -14%
Fashion Bug Stores 368.1 468.8 -21% -16%
Catherines Stores 155.9 170.0 -8% -9%
Catalog Sales 25.8 49.5 -48% NA
Other (2) 14.8 19.3 -23% NA
------------ ---- ---- --- --
Consolidated $1,065.3 $1,290.0 -17% -14%
(1) Includes Lane Bryant Outlet Stores; (2)Includes Petite Sophisticate
Retail and Outlet Stores, Corporate and Other.
Charming Shoppes, Inc. will host its second quarter earnings conference call today at 9:15 am Eastern time. To listen to the conference call, please dial 877-407-8293 approximately 10 minutes prior to the scheduled event. The conference call will also be simulcast and rebroadcast at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives. The general public is invited to listen to the conference call via the webcast or the dial-in telephone number.
A transcript of prepared remarks for the conference call will be accessible at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives following the conference call on Wednesday, August 26, 2009.
The conference call will be recorded on behalf of Charming Shoppes, Inc. and consists of copyrighted material. It may not be re-recorded, reproduced, transmitted or rebroadcast, in whole or in part, without the Company's express written permission. Accessing this call or the rebroadcast constitutes consent to these terms and conditions. Participation in this call serves as consent to having any comments or statements made appear on any transcript, broadcast or rebroadcast of this call.
At August 1, 2009, Charming Shoppes, Inc. operated 2,258 retail stores in 48 states under the names LANE BRYANT(R), LANE BRYANT OUTLET(R), FASHION BUG(R), FASHION BUG PLUS(R), CATHERINES PLUS SIZES(R), and PETITE SOPHISTICATE OUTLET(R). The Company also operates the Figi's Gifts in Good Taste catalog, specializing in holiday fare, gift-giving convenience, and exclusive and personalized items. During the six months ended August 1, 2009 the Company opened 8, relocated 6, and closed 51 retail stores. The Company ended the period with 881 Lane Bryant and Lane Bryant Outlet stores, 868 Fashion Bug and Fashion Bug Plus stores, 465 Catherines stores, and 44 Petite Sophisticate Outlet stores, comprising approximately 14,801,000 square feet of leased space. Please visit www.charmingshoppes.com for additional information about Charming Shoppes, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
For the Three and Six Months Ended August 1, 2009 and August 2, 2008*
---------------------------------------------------------------------
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
8/1/09 8/2/08 8/1/09 8/2/08
$in millions $in millions $in millions $in millions
(pre-tax) (pre-tax) (pre-tax) (pre-tax)
--------- --------- --------- ---------
Income/(Loss) from
operations, on a
GAAP basis $2.5 $(5.2) $1.3 $(1.4)
Impact of restructuring
charges 7.8 14.9 16.5 18.6
--- ---- ---- ----
Income from operations,
on a non-GAAP basis $10.3 $9.8 $17.8 $17.2
*SEC REGULATION G -- Charming Shoppes, Inc. reports its financial results in accordance with generally accepted accounting principles (GAAP). However, management believes that non-GAAP performance measures, which exclude one-time charges, present the operating results of the Company on a basis consistent with those used in managing the Company's business, and provide users of the Company's financial information with a more meaningful report on the condition of the Company's business. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP.
The Company plans to report its sales and operating results for the three and nine months ending October 31, 2009 on Wednesday, December 2, 2009.
Safe Harbor Statement
This press release contains and the Company's conference call may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning the Company's operations, performance, and financial condition. Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those indicated. Such risks and uncertainties may include, but are not limited to: the failure to consummate our announced transaction with Alliance Data, the failure to continue receiving financing at an affordable cost through the availability of our credit card securitization facilities and through the availability of credit we receive from our bankers, suppliers and their agents, the failure to realize the benefits from the sale of our credit card program to, and the operation of our credit card program by, our third-party provider, the failure to consummate our identified strategic alternatives for our non-core assets, the failure to effectively implement our planned consolidation, cost and capital budget reduction plans and store closing plans, the failure to implement the Company's business plan for increased profitability and growth in the Company's retail stores and direct-to-consumer segments, the failure to effectively implement the Company's plans for a new organizational structure and enhancements in the Company's merchandise and marketing, the failure to effectively implement the Company's plans for the transformation of its brands to a vertical specialty store model, the failure to achieve increased profitability through the adoption by the Company's brands of a vertical specialty store model, the failure to achieve improvement in the Company's competitive position, the failure to maintain efficient and uninterrupted order-taking and fulfillment in our direct-to-consumer business, changes in or miscalculation of fashion trends, extreme or unseasonable weather conditions, economic downturns, escalation of energy costs, a weakness in overall consumer demand, the failure to find suitable store locations, increases in wage rates, the ability to hire and train associates, trade and security restrictions and political or financial instability in countries where goods are manufactured, the interruption of merchandise flow from the Company's centralized distribution facilities, competitive pressures, and the adverse effects of natural disasters, war, acts of terrorism or threats of either, or other armed conflict, on the United States and international economies. These, and other risks and uncertainties, are detailed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2009, our report on Form 8-K dated June 19, 2009, our Quarterly Reports on Form 10-Q and other Company filings with the Securities and Exchange Commission. Charming Shoppes assumes no duty to update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
CHARMING SHOPPES, INC.
(Unaudited)
2nd 2nd Quarter
Quarter Ended
(in thousands, Ended Percent Aug. 2 Percent
except per share Percent Aug. 1 of 2008 of
amounts) Change 2009 Sales(a)(as adjusted) Sales(a)
------------------- ------- -------- -------- ------------ --------
Net sales (18.7)% $527,217 100.0% $648,616 100.0%
Cost of goods sold (23.8) 263,358 50.0 345,786 53.3
----- ------- ---- ------- ----
Gross profit (12.9) 263,859 50.0 302,830 46.7
----- ------- ---- ------- ----
Occupancy and buying (5.2) 100,084 19.0 105,620 16.3
Selling, general,
and administrative (18.4) 134,279 25.5 164,469 25.4
Depreciation and
amortization (b) (16.5) 19,192 3.6 22,988 3.5
Restructuring charges (c) (48.0) 7,768 1.5 14,945 2.3
----- ----- --- ------ ---
Total operating
expenses (15.2) 261,323 49.6 308,022 47.5
----- ------- ---- ------- ----
Income/(loss) from
operations 148.8 2,536 0.5 (5,192) (0.8)
Other income, principally
interest (64.3) 283 0.1 792 0.1
Gain on repurchase of debt n/a 7,313 1.4 0 0.0
Non-cash interest
expense (d) (6.7) (2,550) (0.5) (2,733) (0.4)
Interest expense (8.3) (1,935) (0.4) (2,109) (0.3)
---- ------ ---- ------ ----
Income/(loss) from
continuing operations
before income taxes 161.1 5,647 1.1 (9,242) (1.4)
Income tax provision/
(benefit) (117.9) 664 0.1 (3,719) (0.6)
------ --- --- ------ ----
Income/(loss) from
continuing operations 190.2 4,983 0.9 (5,523) (0.9)
Loss from operations
of discontinued component
(including reduction of
loss on disposal of $980),
net of tax (e) n/a 0 0.0 (5,153) (0.8)
--- - --- ------ ----
Net income/(loss) 146.7% $4,983 0.9% $(10,676) (1.6)%
===== ====== === ======== ====
Income/(loss) per share:
Basic:
Income/(loss) from
continuing operations $0.04 $(0.05)
Loss from discontinued
operations, net of tax 0.00 (0.05)
---- -----
Net income/(loss) (a) $0.04 $(0.09)
===== ======
Weighted average shares
and equivalents outstanding 115,612 114,342
======= =======
Diluted:
Income/(loss) from
continuing operations $0.04 $(0.05)
Loss from discontinued
operations, net of tax 0.00 (0.05)
---- -----
Net income/(loss) (a) $0.04 $(0.09)
===== ======
Weighted average shares and
equivalents outstanding 118,931 114,342
======= =======
(a) Results may not add due to rounding.
(b) Includes net loss from disposal of capital assets and excludes
amortization of deferred financing fees included as a component of
interest expense.
(c) Fiscal 2009 costs are related to our multi-year transformational
initiatives and non-cash accelerated depreciation related to fixed
assets retained from the sale of the non-core misses apparel catalog
business; the shutdown of Lane Bryant Woman catalog; and the
outsourcing of our e-commerce platform. Fiscal 2008 costs
represent primarily severance for our former CEO in addition to
lease termination charges, relocation charges and accelerated
depreciation related to the consolidation and streamlining
initiatives announced during the 4th Quarter of Fiscal 2007.
(d) The Company adopted FSP APB 14-1 "Accounting for Convertible Debt
Instruments That May Be Settled in Cash Upon Conversion
(Including Partial Cash Settlements)" on February 1, 2009, which
required retrospective application. Accordingly, the Company's
operating results since the issuance of the Senior Convertible
Notes in Fiscal 2007 and future operating results until maturity
will reflect additional non-cash interest expense.
(e) Loss from operations of discontinued component for the 2nd Quarter
of Fiscal 2008 represents the results of operations and reduction of
estimated loss on disposal, net of taxes of $2,624, related to the
planned sale of the non-core misses apparel catalog businesses.
CHARMING SHOPPES, INC.
(Unaudited)
Six Months
Six Months Ended
Ended Aug. 2
(in thousands, except Percent Aug. 1 Percent of 2008 Percent of
per share amounts) Change 2009 Sales(a) (as adjusted) Sales(a)
--------------------- ------- --------- -------- ------------- ---------
Net sales (17.4)% $1,065,353 100.0% $1,289,962 100.0%
Cost of goods sold (22.2) 513,919 48.2 660,213 51.2
----- ------- ---- ------- ----
Gross profit (12.4) 551,434 51.8 629,749 48.8
----- ------- ---- ------- ----
Occupancy and buying (4.6) 202,640 19.0 212,348 16.5
Selling, general,
and administrative (16.8) 291,781 27.4 350,781 27.2
Depreciation and
amortization (b) (20.7) 39,274 3.7 49,499 3.8
Restructuring
charges (c) (11.2) 16,473 1.5 18,556 1.4
----- ------ --- ------ ---
Total operating
expenses (12.8) 550,168 51.6 631,184 48.9
----- ------- ---- ------- ----
Income/(loss) from
operations 188.2 1,266 0.1 (1,435) (0.1)
Other income,
principally interest (63.2) 481 0.0 1,307 0.1
Gain on repurchase
of debt n/a 11,564 1.1 0 0.0
Non-cash interest
expense (d) 0.3 (5,434) (0.5) (5,417) (0.4)
Interest expense (7.2) (4,071) (0.4) (4,386) (0.3)
---- ------ ---- ------ ----
Income/(loss) from
continuing operations
before income taxes 138.3 3,806 0.4 (9,931) (0.8)
Income tax provision/
(benefit) (255.7) 5,384 0.5 (3,459) (0.3)
------ ----- --- ------ ----
Income/(loss) from
continuing operations 75.6 (1,578) (0.1) (6,472) (0.5)
Loss from operations of
discontinued component
(including loss on
disposal of $38,190),
net of tax (e) n/a 0 0.0 (51,047) (4.0)
--- - --- ------- ----
Net income/(loss) 97.3% $(1,578) (0.1)% $(57,519) (4.5)%
==== ======= ==== ======== ====
Income/(loss) per share:
Basic:
Income/(loss) from
continuing operations $(0.01) $(0.06)
Loss from discontinued
operations, net of tax 0.00 (0.45)
---- -----
Net income/(loss) (a) $(0.01) $(0.50)
====== ======
Weighted average shares
and equivalents outstanding 115,396 114,465
======= =======
Diluted:
Income/(loss) from
continuing operations $(0.01) $(0.06)
Loss from discontinued
operations, net of tax 0.00 (0.45)
---- -----
Net income/(loss) (a) $(0.01) $(0.50)
====== ======
Weighted average shares
and equivalents outstanding 115,396 114,465
======= =======
(a) Results may not add due to rounding.
(b) Includes net loss from disposal of capital assets and excludes
amortization of deferred financing fees included as a component of
interest expense.
(c) Fiscal 2009 costs are related to our multi-year transformational
initiatives and non-cash accelerated depreciation related to fixed
assets retained from the sale of the non-core misses apparel catalog
business; the shutdown of Lane Bryant Woman catalog; and the
outsourcing of our e-commerce platform. Fiscal 2008 costs represent
primarily severance for our former CEO in addition to lease
termination charges, relocation charges and accelerated depreciation
related to the consolidation and streamlining initiatives announced
during the 4th Quarter of Fiscal 2007.
(d) The Company adopted FSP APB 14-1 "Accounting for Convertible Debt
Instruments That May Be Settled in Cash Upon Conversion (Including
Partial Cash Settlements)" on February 1, 2009, which required
retrospective application. Accordingly, the Company's operating
results since the issuance of the Senior Convertible Notes in Fiscal
2007 and future operating results until maturity will reflect
additional non-cash interest expense.
(e) Loss from operations of discontinued component for the Six Months
ended Aug. 2, 2008 represents the results of operations and estimated
loss on disposal, net of taxes of $12,698, related to the planned
sale of the non-core misses apparel catalog businesses.
CHARMING SHOPPES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
August 1, January 31,
(In thousands, except share amounts) 2009 2009
---- ----
(As Adjusted)
ASSETS
Current assets
Cash and cash equivalents $116,699 $93,759
Available-for-sale securities 400 6,398
Accounts receivable, net of allowances
of $2,362 and $6,018 3,359 33,300
Investment in asset-backed securities 100,358 94,453
Merchandise inventories 259,473 268,142
Deferred taxes 3,439 3,439
Prepayments and other 173,352 155,430
------- -------
Total current assets 657,080 654,921
------- -------
Property, equipment, and leasehold
improvements - at cost 1,072,785 1,076,972
Less accumulated depreciation
and amortization 726,478 693,796
------- -------
Net property, equipment, and
leasehold improvements 346,307 383,176
------- -------
Trademarks and other intangible assets 187,132 187,365
Goodwill 23,436 23,436
Other assets 28,251 28,243
------ ------
Total assets $1,242,206 $1,277,141
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $121,165 $99,520
Accrued expenses 152,031 166,631
Current portion - long-term debt 6,483 6,746
----- -----
Total current liabilities 279,679 272,897
------- -------
Deferred taxes 47,885 46,197
Other non-current liabilities 180,062 188,470
Long-term debt, net of debt discount of
$54,459 and $72,913 196,257 232,722
Stockholders' equity
Common Stock $.10 par value:
Authorized - 300,000,000 shares
Issued - 154,041,918 shares and
153,482,368 shares 15,404 15,348
Additional paid-in capital 501,579 498,551
Treasury stock at cost - 38,491,692 shares (347,764) (347,730)
Accumulated other comprehensive income 0 5
Retained earnings 369,104 370,681
------- -------
Total stockholders' equity 538,323 536,855
------- -------
Total liabilities and stockholders'
equity $1,242,206 $1,277,141
========== ==========
Amounts are preliminary and subject to reclassifications and adjustments
CHARMING SHOPPES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Twenty-six Weeks Ended
----------------------
August 1, August 2,
(In thousands) 2009 2008
---- ----
(As Adjusted)
Operating activities
Net loss $(1,578) $(57,519)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation and amortization 40,501 50,382
Stock-based compensation 2,974 5,014
Net loss/(gain) from disposition of capital
assets 237 (1,066)
Net loss/(gain) from securitization activities 178 (83)
Accretion of discount on 1.125% Senior
Convertible Notes 5,434 5,417
Estimated loss on disposition of discontinued
operations 0 42,768
Deferred income taxes 1,691 (2,091)
Gain on repurchases of 1.125% Senior
Convertible Notes (11,564) 0
Write-down of deferred taxes related to
stock-based compensation 0 (1,333)
Write-down of capital assets 7,128 2,217
Changes in operating assets and liabilities
Accounts receivable, net 29,941 29,995
Merchandise inventories 8,669 95
Accounts payable 21,645 32,242
Prepayments and other (23,053) 4,054
Accrued expenses and other (24,790) 1,425
-------- -----
Net cash provided by operating activities 57,413 111,517
------ -------
Investing activities
Investment in capital assets (9,766) (38,459)
Proceeds from sales of capital assets 1,219 4,813
Gross purchases of securities (1,698) (3,489)
Proceeds from sales of securities 8,588 10,719
Decrease in other assets 3,354 459
----- ---
Net cash provided/(used) by investing activities 1,697 (25,957)
----- --------
Financing activities
Proceeds from long term borrowings 0 108
Repayments of long-term borrowings (3,448) (4,579)
Repurchases of 1.125% Senior Convertible Notes (26,617) 0
Net payments for settlements of hedges
on convertible notes (31) 0
Payments of deferred financing costs (6,328) (46)
Purchases of treasury stock 0 (10,969)
Net proceeds/(payments) from shares
issued under employee stock plans 254 (62)
--- ----
Net cash used by financing activities (36,170) (15,548)
-------- --------
Increase in cash and cash equivalents 22,940 70,012
Cash and cash equivalents, beginning of period 93,759 61,842
------ ------
Cash and cash equivalents, end of period $116,699 $131,854
======== ========
Non-cash financing and investing activities
Assets acquired through capital leases $0 $5,959
== ======
Amounts are preliminary and subject to reclassifications and adjustments
SOURCE Charming Shoppes, Inc.
http://www.charmingshoppes.com
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