updated 12/7/2010 4:17:07 PM ET 2010-12-07T21:17:07

FORT WAYNE, Ind., Dec. 7, 2010 (GLOBE NEWSWIRE) -- Vera Bradley, Inc. (Nasdaq:VRA) today announced its financial results for the fiscal 2011 third quarter ended October 30, 2010.

Third Quarter Highlights

  • Revenues increased 26% to $91.6 million, with Indirect revenues increasing 10% and Direct revenues increasing 74%, including an increase of 32.5% in comparable-store sales.
  • On a GAAP basis, the operating loss was $0.2 million, which included a one-time charge of $15.7 million related to restricted-stock awards that vested upon the completion of the Company's IPO on October 21, 2010. On an adjusted basis, excluding this one-time charge, operating income increased 17% to $15.5 million.
  • On a GAAP basis, diluted EPS was $0.17 for the quarter, compared to $0.36 for the same period of the prior year. On an adjusted basis, excluding the restricted-stock charge and including an adjustment for income taxes, diluted EPS was $0.25 on 36.2 million weighted-average shares outstanding, compared to $0.22 on 35.4 million weighted-average shares outstanding in the comparable prior-year period.

"We are pleased with our strong financial results for the third quarter, our first as a public company," said Mike Ray, Vera Bradley's Chief Executive Officer. "Our solid sales momentum continued during the quarter, reflecting the strength and expanding appeal of our brand, the ongoing loyalty of our customers, and the strong response to our product offerings. Looking ahead, we remain focused on executing our growth strategies, which include expanding our product offerings and growing in underpenetrated markets in our Indirect and Direct channels."

Third Quarter Results

Vera Bradley reported net revenues of $91.6 million for the third quarter, compared to $72.8 million in the same period of the prior year, an increase of $18.8 million, or 26%. By segment, Indirect revenues increased 10% to $59.8 million, and Direct revenues increased 74% to $31.8 million, with comparable-store sales increasing 32.5%. For the quarter, gross profit rose 30% to $51.7 million, and gross margin improved from 54.8% to 56.4%.

During the quarter, the Company opened five new stores, bringing the total to 34 full-price stores and four outlet stores as of October 30, 2010. The Company opened one additional full-price store subsequent to the end of the third quarter, its final anticipated store opening of fiscal 2011.

The operating loss for the quarter was $0.2 million, compared to operating income of $13.2 million in the third quarter of fiscal 2010. On an adjusted basis, excluding stock-based compensation expense of $15.7 million related to restricted-stock awards that vested upon the completion of the Company's IPO, operating income increased 17% to $15.5 million.

On a GAAP basis, net income for the quarter was $6.0 million, compared to $12.8 million in the comparable prior-year period. GAAP earnings per diluted share totaled $0.17 for the quarter, compared to $0.36 for the same period of the prior year. Net income for the current quarter included the previously discussed restricted-stock expense and a tax benefit of $6.8 million related in part to the Company's conversion from an "S" Corporation to a "C" Corporation for tax purposes. On an adjusted basis, excluding the restricted-stock expense and including an adjustment for income taxes as if the Company had been a "C" Corporation at the beginning of each period described (at an assumed combined effective tax rate of 40%), net income for the quarter increased 15% to $9.0 million, from $7.8 million a year ago, and diluted earnings per share increased to $0.25 on 36.2 million weighted-average shares outstanding, from $0.22 on 35.4 million weighted-average shares outstanding in the comparable prior-year period.

Year-to-Date Results

For the thirty-nine weeks ended October 30, 2010, net revenues increased 26% to $256.7 million, from $203.8 million in the comparable prior-year period. By segment, Indirect revenues increased 13% to $161.3 million, and Direct revenues increased 55% to $95.4 million, with comparable-store sales increasing 28.2%.

Operating income for the thirty-nine weeks totaled $26.8 million, down 3% from $27.7 million a year ago. On an adjusted basis, excluding $15.8 million of stock-based compensation expense related to the restricted-stock awards and $6.1 million of compensation expense for bonuses paid to recipients of the restricted-stock awards to satisfy tax obligations, operating income increased 76% to $48.7 million.

On a GAAP basis, net income for the thirty-nine weeks rose 23% to $32.0 million, from $25.9 million a year ago. Net income for the thirty-nine weeks included the previously discussed restricted-stock and bonus expenses as well as the tax benefit recognized in the third quarter. On an adjusted basis, excluding the restricted-stock and bonus expenses and including an adjustment for income taxes as if the Company had been a "C" Corporation at the beginning of each period described (at an assumed combined effective tax rate of 40%), net income for the thirty-nine weeks increased 79% to $28.5 million, from $15.9 million in the comparable prior-year period, and diluted earnings per share increased to $0.80 on 35.7 million weighted-average shares outstanding, from $0.45 on 35.4 million weighted-average shares outstanding in the comparable prior-year period.

Call Information

A conference call to discuss third quarter results is scheduled for today, December 7, 2010, at 4:30 PM Eastern Time. A broadcast of the call will be available on the Company's website, www.verabradley.com. In addition, a replay of the call will be available shortly after the conclusion of the call and remain available until December 21, 2010. To access the telephone replay, listeners should dial (877) 870-5176. The access code for the replay is 7269477.

About Vera Bradley, Inc.

Friends Barbara Bradley Baekgaard and Patricia R. Miller founded Vera Bradley in 1982. Today, Vera Bradley is sold through 3,300 specialty stores as well as 39 Vera Bradley stores nationwide. Vera Bradley accessories, handbags, and travel and paper & gift items have recently been spotted on Desperate Housewives, Brothers and Sisters, Entourage, and Modern Family, and in over 20 feature-length films. Visit www.verabradley.com for a store near you or to learn more.

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, including: possible adverse changes in general economic conditions and their impact on consumer confidence and spending; possible inability to predict and respond in a timely manner to changes in consumer demand; possible loss of key management or design associates or inability to attract and retain the talent required for our business; possible inability to maintain and enhance our brand; possible inability to successfully implement our growth strategies or manage our growing business; possible inability to successfully open new stores as planned; and possible inability to sustain levels of comparable-store sales. 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 Registration Statement on Form S-1, as amended (File No. 333-167934), which became effective on October 20, 2010. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.

 
 
Vera Bradley, Inc.
Consolidated Balance Sheets
($ in thousands)
(unaudited)
       
       
Assets October 30,

2010
January 30,

2010
October 31,

2009
Current assets:      
 Cash and cash equivalents  $ 5,873  $ 6,509  $ 4,355
 Accounts receivable, net  28,842  31,013  25,128
 Inventories  83,688  66,535  50,836
 Other current assets  5,724  6,468  4,532
 Deferred income taxes  9,105  --  --
 Total current assets  133,232  110,525  84,851
       
Property, plant, and equipment, net  41,140  40,123  44,116
Restricted cash  --  1,500  1,500
Other assets  2,525  1,604  1,481
 Total assets  $ 176,897  $ 153,752  $ 131,948
       
Liabilities and Shareholders' Equity      
Current liabilities:      
 Accounts payable  $ 20,785  $ 19,221  $ 18,464
 Distributions payable  --  1,091  3,865
 Accrued employment costs  13,814  14,181  10,692
 Other accrued liabilities  10,744  9,772  6,806
 Current portion of long-term debt  82  5,022  5,022
 Total current liabilities  45,425  49,287  44,849
       
Long-term debt  76,978  25,114  11,869
Deferred income taxes  2,501  --  --
Other long-term liabilities  1,996  1,458  1,423
 Total liabilities  126,900  75,859  58,141
       
Shareholders' equity:      
 Common stock  --  1  1
 Additional paid-in-capital  71,833  --  --
 Retained earnings (accumulated deficit)  (21,836)  77,892  73,806
 Total shareholders' equity  49,997  77,893  73,807
 Total liabilities and shareholders' equity                                                  $ 176,897  $ 153,752  $ 131,948
 
 
 
Vera Bradley, Inc.
Consolidated Statements of Income
($ in thousands, except per share amounts)
(unaudited)
         
         
  Thirteen Weeks Ended Thirty-Nine Weeks Ended
  October 30,

2010
October 31,

2009
October 30,

2010
October 31,

2009
         
Net revenues  $ 91,595  $ 72,752  $ 256,672  $ 203,839
Cost of sales  39,921  32,874  109,362  99,724
 Gross profit  51,674  39,878  147,310  104,115
Selling, general, and administrative expenses                                                    53,239  30,030  125,824  84,755
Other income  1,373  3,385  5,286  8,365
 Operating income (loss)  (192)  13,233  26,772  27,725
Interest expense, net  584  259  1,227  1,274
 Income (loss) before income taxes  (776)  12,974  25,545  26,451
Income tax (benefit) expense  (6,775)  208  (6,418)  523
 Net income  $ 5,999  $ 12,766  $ 31,963  $ 25,928
         
Basic weighted-average shares outstanding  36,082,298  35,440,547  35,654,464  35,440,547
Diluted weighted-average shares outstanding                 36,213,361  35,440,547  35,699,156  35,440,547
Basic net income per share  $ 0.17  $ 0.36  $ 0.90  $ 0.73
Diluted net income per share  0.17  0.36  0.90  0.73
         
 
 
Vera Bradley, Inc.
Supplemental Information - Consolidated Statements of Income
Reconciliation of GAAP to Non-GAAP Financial Measures
($ in thousands, except per share amounts)
(unaudited)
         
         
  Thirteen Weeks Ended Thirty-Nine Weeks Ended
  October 30,

2010
October 31,

2009
October 30,

2010
October 31,

2009
         
Operating income  $ (192)  $ 13,233  $ 26,772  $ 27,725
         . 
Adjustments        
Stock-based compensation expense relating to restricted-stock awards       15,703  --   15,790  -- 
Bonus compensation expense relating to restricted-stock awards  --   --   6,132  -- 
 Total adjustments  15,703  --   21,922  -- 
         
Adjusted operating income  15,511  13,233  48,694  27,725
Interest expense, net  584  259  1,227  1,274
         
Adjusted income before income taxes  14,927  12,974  47,467  26,451
Adjusted income tax expense*  5,971  5,190  18,987  10,580
         
Adjusted net income  $ 8,956  $ 7,784  $ 28,480  $ 15,871
         
Adjusted net income per share:        
Basic  $ 0.25  $ 0.22  $ 0.80  $ 0.45
Diluted  0.25  0.22  0.80  0.45
         
         
         
*Assumes a combined federal, state, and local effective tax rate of 40%.          
     
     
Vera Bradley, Inc.
Consolidated Statements of Cash Flows
($ in thousands)
(unaudited)
     
     
  Thirty-Nine Weeks Ended
Cash flows from operating activities October 30,

2010
October 31,

2009
Net income  $ 31,963  $ 25,928
Adjustments to reconcile net income to net cash provided by                                   
 operating activities:    
 Depreciation and amortization  6,193  6,905
 Provision for doubtful accounts  119  687
 Loss on disposal of fixed assets  278  267
 Write-off of debt-issuance costs  227  --
 Stock-based compensation  15,799  --
 Deferred income taxes  (6,604)  --
 Changes in assets and liabilities:    
 Accounts receivable  2,052  4,826
 Inventories  (17,153)  13,639
 Other assets  700  254
 Accounts payable  1,564  2,393
 Accrued and other liabilities  1,143  5,255
Net cash provided by operating activities  36,281  60,154
     
Cash flows from investing activities    
 Purchases of fixed assets  (7,303)  (4,864)
 Restricted cash on deposit  1,500  --
Net cash used in investing activities  (5,803)  (4,864)
     
Cash flows from financing activities    
 Payments on financial-institution debt  (58,900)  (51,250)
 Borrowings on financial-institution debt  105,673  13,500
 Payments on vendor-financed debt  (34)  (248)
 Payments on related-party debt  --  (3,488)
 Payments on cash surrender value – life insurance             --  (600)
 Payments of debt-issuance costs  (1,104)  --
 Issuance of stock, net of costs  56,337  --
 Repurchase of stock  (304)  --
 Payments of distributions  (132,782)  (9,625)
Net cash used in financing activities  (31,114)  (51,711)
     
Increase (decrease) in cash and cash equivalents  $ (636)  $ 3,579
Cash and cash equivalents, beginning of period  6,509  776
Cash and cash equivalents, end of period  $ 5,873  $ 4,355
     
Supplemental disclosure of non-cash activity    
 Vendor-financed purchases of fixed assets  $ 185  $ 136
CONTACT:  ICR, Inc.
          Investor Relations:
          Joseph Teklits
          Jean Fontana
            Jean.fontana@icrinc.com
          203-682-8200

          Vera Bradley, Inc.
          Public Relations:
          877-708-VERA (8372)
          Mediacontact@verabradley.com

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.95%
$30K home equity loan FICO 5.19%
$75K home equity loan FICO 4.58%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.40%
13.40%
Cash Back Cards 17.92%
17.91%
Rewards Cards 17.12%
17.11%
Source: Bankrate.com