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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
Current Report
Dated August 30, 2005
of
ZALE CORPORATION
A Delaware Corporation
IRS Employer Identification No. 75-0675400
SEC File Number 001-04129
901 West Walnut Hill Lane
Irving, Texas 75038
(972) 580-4000
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) 12 under the
Securities Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) 12 under the
Securities Act (17 CFR 240.13e-2(c))
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Item 2.02. Results of Operations and Financial Condition
On August 30, 2005, Zale Corporation issued a press release reporting its
financial results for the fourth fiscal quarter and year ended July 31, 2005. A
copy of the press release is being furnished as Exhibit 99.1 and is incorporated
herein by reference.
The attached press release includes a presentation of "free operating cash
flow." Free operating cash flow is a non-GAAP financial measure and is defined
as cash flows from operating activities (in accordance with GAAP) less net
capital expenditures. Net capital expenditures includes additions to property
and equipment and proceeds from the sales of fixed assets, including in 2005 the
sale of an unused Piercing Pagoda warehouse. The Company considers cash flows
from operating activities to be the most comparable GAAP financial measure, and
has included in the press release a reconciliation of cash flows from operating
activities to free operating cash flow.
The Company believes the presentation of free operating cash flow presents
useful information about the amount of cash generated from operations after
making capital investments to support growth initiatives. Free operating cash
flow should not be considered as an alternative to cash flows from operating,
financing or investing activities or as a measure of liquidity. Further, free
operating cash flow does not represent the total increase or decrease in the
cash balance for the period. Readers are encouraged to review the Statement of
Cash Flows included in the attached press release for information regarding the
Company's cash flows from operating, financing and investing activities under
GAAP.
In addition, the attached press release includes a presentation of
projected earnings per share growth for the fiscal year ending July 31, 2006
based on projected earnings per share excluding costs associated with closing
certain Bailey Banks & Biddle stores, stock compensation expense associated with
the adoption of a new accounting standard and a tax repatriation credit under
the American Jobs Creation Act. Earnings per share excluding such expenses and
credits would not be considered a measure of financial performance under GAAP
and should not be considered as an alternative to earnings per share as computed
under GAAP for the applicable period. In the press release, the Company has
provided projected earnings per share growth based on projected earnings per
share including these items.
The Company believes that a presentation of projected earnings per share
growth based on projected earnings per share excluding the anticipated store
closing costs, stock compensation expense and tax repatriation credit is helpful
to investors. Management will use earnings measures adjusted to exclude these
charges as part of its evaluation of the performance of the Company. Further,
the Company believes the adjusted earnings per share growth projection provides
useful information to investors because the charges excluded relate to events
that are expected to result in a significant impact during fiscal year 2006 and
will recur with unpredictable frequency.
The information set forth under this Item 2.02 and in Exhibit 99.1 is being
furnished and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, except
as shall be expressly set forth by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
ZALE CORPORATION
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Registrant
Date: August 30, 2005 By: /s/ Cynthia T. Gordon
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Cynthia T. Gordon
Senior Vice President,
Controller
(principal accounting officer
of the Registrant)
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EXHIBIT INDEX
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99.1 Press Release of Zale Corporation issued August 30, 2005.