Exhibit 99.1
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FOR IMMEDIATE RELEASE
THE CHILDREN’S PLACE RETAIL STORES, INC. REPORTS FIRST QUARTER 2008 FINANCIAL RESULTS
Secaucus, New Jersey - May 22, 2008 - The Children’s Place Retail Stores, Inc. (Nasdaq: PLCE) today reported financial results for the fiscal first quarter ended May 3, 2008. The Disney Store North America (“DSNA”) business has been classified as discontinued operations in accordance with generally accepted accounting principles (“GAAP”) reflecting the Company’s decision to exit the business. Results from continuing operations for both the first quarter of 2008 and 2007 reflect The Children’s Place business only.
· | Net sales of The Children’s Place business for the thirteen-weeks ended May 3, 2008, increased 12% to $400.2 million, compared to $356.0 million last year. |
· | Comparable store sales of The Children’s Place business increased 5% in the quarter, on top of last year’s 2% comparable store sales increase. |
· | Income from continuing operations before interest and taxes increased 15% to $34.0 million from $29.6 million last year. |
· | Income from continuing operations was $19.4 million compared to income from continuing operations of $19.1 million last year. |
· | Diluted earnings per share from continuing operations were $0.66 compared to diluted earnings per share from continuing operations of $0.64 last year. |
· | Net income including the impact of discontinued operations was $19.5 million, or $0.67 per diluted share, compared to $14.7 million, or $0.49 per diluted share last year. |
· | The effective tax rate for continuing operations in the first quarter was 42% compared to 38% last year, as the Company is no longer permanently invested in its Asian subsidiary. |
· | During the first quarter, the Company opened three The Children’s Place stores and closed one. |
Chuck Crovitz, Interim Chief Executive Officer of The Children’s Place Retail Stores, Inc., commented, “Our first quarter results show progress toward our goal of returning the Company to its historical level of profitability. During the quarter, we exited the Disney Store business at cash costs that are expected to be at the low end of our previously disclosed range of $50 million to $100 million. In addition, we began the reduction of our cost structure, announced lower capital spending for 2008 and expect our inventory position to be below last year’s level at the end of the second quarter. Further, we continue to be encouraged by the customer response to our summer merchandise and believe that The Children’s Place, as a leading value player in the children’s apparel market, is well-positioned in this difficult economic environment.”
The Children’s Place will host a conference call to discuss its first quarter results today at 10:00 a.m. Eastern Time. Interested parties are invited to listen to the call by dialing (800) 862-9098 and providing the Conference ID, PLCE. The call will also be webcast live and can be accessed via the Company’s web site, www.childrensplace.com. A replay of the call will be available approximately one hour after the conclusion of the call, until midnight on May 29, 2008. To access the replay, please dial (800) 753-6121, or you may listen to the audio archive on the Company’s website, www.childrensplace.com.
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PLCE - First Quarter 2008 Financial Results
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The Children’s Place Retail Stores, Inc. is a leading specialty retailer of children’s merchandise. The Company designs, contracts to manufacture and sells high-quality, value-priced merchandise under the proprietary “The Children’s Place” brand name. As of May 3, 2008, the Company owned and operated 906 The Children’s Place stores and its online store at www.childrensplace.com.
Contact: | The Children’s Place Retail Stores, Inc. |
Susan Riley, EVP, Finance & Administration, 201/558-2400
Rich Paradise, Chief Financial Officer, 201/558-2400
Media:
Diane Zappas/Evan Goetz of FD, 212/850-5600
(Tables Follow)
THE CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
13 Weeks Ended: | |||||||
May 3, 2008 | May 5, 2007 | ||||||
Net sales | $ | 400,212 | $ | 355,995 | |||
Cost of sales | 229,120 | 204,021 | |||||
Gross profit | 171,092 | 151,974 | |||||
Selling, general and administrative expenses | 119,410 | 107,775 | |||||
Depreciation and amortization | 17,652 | 14,597 | |||||
Income from continuing operations before interest and taxes | 34,030 | 29,602 | |||||
Interest (expense) income | (493 | ) | 1,000 | ||||
Income from continuing operations before income taxes | 33,537 | 30,602 | |||||
Provision for income taxes | 14,117 | 11,533 | |||||
Income from continuing operations | 19,420 | 19,069 | |||||
Income (loss) from discontinued operations, net of income taxes | 98 | (4,355 | ) | ||||
Net income | $ | 19,518 | $ | 14,714 | |||
Basic income from continuing operations per common share | $ | 0.67 | $ | 0.66 | |||
Income (loss) from discontinued operations per common share | 0.00 | (0.15 | ) | ||||
Basic net income per common share | $ | 0.67 | $ | 0.51 | |||
Basic weighted average common shares outstanding | 29,182 | 29,084 | |||||
Diluted income from continuing operations per common share | $ | 0.66 | $ | 0.64 | |||
Income (loss) from discontinued operations per common share | 0.00 | (0.15 | ) | ||||
Diluted net income per common share* | $ | 0.67 | $ | 0.49 | |||
Diluted weighted average common shares and common share equivalents outstanding | 29,275 | 30,002 |
* Does not add due to rounding.
Note: Both periods presented above reflect the exit of the DSNA business, which has been classified as a discontinued operation in accordance with GAAP. Continuing operations, as presented above, includes the operations of The Children’s Place business.
THE CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
May 3, 2008 | February 2, 2008 | May 5, 2007 | ||||||||
Current assets: | ||||||||||
Cash and investments | $ | 118,315 | $ | 81,626 | $ | 172,994 | ||||
Accounts receivable | 34,661 | 41,143 | 33,524 | |||||||
Inventories | 179,065 | 196,606 | 159,570 | |||||||
Other current assets | 92,406 | 92,910 | 53,332 | |||||||
Restricted assets in bankruptcy estate of subsidiary | 99,068 | -- | -- | |||||||
Current assets held for sale | -- | 98,591 | 79,550 | |||||||
Total current assets | 523,515 | 510,876 | 498,970 | |||||||
Property and equipment, net | 338,450 | 354,141 | 306,630 | |||||||
Other assets, net | 91,911 | 128,357 | 86,474 | |||||||
Non-current assets held for sale | -- | 4,163 | 61,509 | |||||||
Total assets | $ | 953,876 | $ | 997,537 | $ | 953,583 | ||||
Current liabilities: | ||||||||||
Revolving credit facility | $ | 27,936 | $ | 88,976 | $ | -- | ||||
Accounts payable | 59,303 | 80,807 | 85,538 | |||||||
Accrued expenses and other current liabilities | 109,273 | 140,712 | 136,864 | |||||||
Liabilities subject to compromise | 123,694 | -- | -- | |||||||
Total current liabilities | 320,206 | 310,495 | 222,402 | |||||||
Other liabilities | 141,504 | 214,809 | 196,505 | |||||||
Total liabilities | 461,710 | 525,304 | 418,907 | |||||||
Stockholders’ equity | 492,166 | 472,233 | 534,676 | |||||||
Total liabilities and stockholders’ equity | $ | 953,876 | $ | 997,537 | $ | 953,583 |
Note: The balance sheet as of May 3, 2008, reflects DSNA restricted assets available to settle its liabilities through bankruptcy. “Assets held for sale” on the February 2, 2008, and May 5, 2007, balance sheets reflect the assets sold to an affiliate of The Walt Disney Company. The remaining assets and liabilities of the DSNA business are reflected in their respective balance sheet categories on the February 2, 2008, and May 5, 2007, balance sheets.
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