Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 1, 2011

 

 

VERA BRADLEY, INC.

(Exact name of registrant as specified in its charter)

 

 

Indiana

(State or Other Jurisdiction of Incorporation)

 

001-34918   27-2935063
(Commission File Number)   (IRS Employer Identification No.)
2208 Production Road, Fort Wayne, Indiana   46808
(Address of Principal Executive Offices)   (Zip Code)

(877) 708-8372

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


The information in Items 2.02 and 9.01 of this Form 8-K is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 2.02 Results of Operations and Financial Condition

On June 1, 2011, Vera Bradley, Inc. issued an earnings press release for the quarterly period ended April 30, 2011. The press release, including attachments, is furnished as Exhibit 99.1 to this report.

The press release furnished as Exhibit 99.1 contains financial measures that are not calculated in accordance with accounting principles generally accepted in the United States (GAAP). The non-GAAP financial measures are adjusted income tax expense, adjusted net income, adjusted net income (or earnings) per share, and adjusted weighted-average shares outstanding. The non-GAAP financial information should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Management, however, believes that these non-GAAP financial measures, when used in conjunction with the results presented in accordance with GAAP, may provide a more complete understanding of the Company’s results and may facilitate a fuller analysis of the Company’s results, particularly in evaluating performance from one period to another. Management has chosen to provide this supplemental information to investors, analysts, and other interested parties to enable them to perform additional analyses of results and to illustrate the results giving effect to the non-GAAP adjustments shown in the reconciliation. Management strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

 

99.1   Press release dated June 1, 2011


SIGNATURE

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 thereunto duly authorized.

 

  Vera Bradley, Inc.
  (Registrant)
Date: June 1, 2011  

/s/ Jeffrey A. Blade

 

Jeffrey A. Blade

Executive Vice President – Chief Financial and Administrative Officer


EXHIBIT INDEX

 

Exhibit No.

  

Description

99.1    Press release dated June 1, 2011
Press Release

Exhibit 99.1

LOGO

Vera Bradley Announces Fiscal 2012 First Quarter Financial Results

FORT WAYNE, Ind., June 1, 2011 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) today announced its financial results for the fiscal 2012 first quarter ended April 30, 2011.

First Quarter Highlights

 

   

Net revenues increased 19% to $101.4 million, with Indirect net revenues increasing 6% and Direct net revenues rising 43%, including an increase of 22.1% in comparable-store sales.

 

   

Operating income grew 10% to $19.1 million, or 18.8% of net revenues, compared to $17.3 million, or 20.4% of net revenues, in the first quarter of fiscal 2011.

 

   

On a GAAP basis, diluted EPS was $0.28 for the quarter, compared to $0.47 for the same quarter of fiscal 2011. Adjusted for income taxes and an increase in the number of common shares outstanding, diluted EPS was $0.25 for the first quarter of fiscal 2011.

“Fiscal 2012 is off to a solid start as we continue to experience strong sales momentum across all of our channels and execute key components of our business plan,” said Michael C. Ray, Vera Bradley’s Chief Executive Officer. “Our performance reflects significant demand for Vera Bradley as we expand our product offerings and increase our presence in underpenetrated markets. In addition, we have some exciting new initiatives underway, including the introduction of our brand in Japan and our initial entry into the department store channel. Our success is a tribute to our brand, our talented team, and our retail partners, and we remain very optimistic about the long-term prospects for our company.”

First Quarter Results

Vera Bradley reported net revenues of $101.4 million for the first quarter, compared to $85.0 million in the same period of the prior year, an increase of $16.4 million, or 19%. By segment, Indirect net revenues increased 6% to $57.3 million, and Direct net revenues increased 43% to $44.1 million, with comparable-store sales increasing 22.1%. For the first quarter, gross profit rose 16% to $56.4 million, and gross margin was 55.7%, compared to 57.4% in the first quarter of fiscal 2011.

Operating income increased 10% to $19.1 million, or 18.8% of net revenues, in the first quarter, compared to operating income of $17.3 million, or 20.4% of net revenues, in the first quarter of fiscal 2011.

On a GAAP basis, net income for the quarter was $11.2 million, or $0.28 per diluted share, compared to $16.8 million, or $0.47 per diluted share, in the comparable prior-year period. After adjusting the first quarter of fiscal 2011 for income taxes (at an assumed rate of 40%) and an increase in the number of common shares outstanding, net income for the first quarter of fiscal 2012 increased 10% to $11.2 million, or $0.28 per diluted share, from $10.2 million, or $0.25 per diluted share, in the same period a year ago.


Outlook

For the second quarter of fiscal 2012, the Company expects net revenues in the range of $95 million to $98 million and diluted earnings per share in the range of $0.27 to $0.29, based on diluted weighted-average shares outstanding of 40.5 million.

For fiscal 2012, the Company now expects net revenues in the range of $430 million to $435 million and diluted earnings per share in the range of $1.27 to $1.30, based on diluted weighted-average shares outstanding of 40.6 million.

Call Information

A conference call to discuss fiscal 2012 first quarter results and the Company’s outlook for the remainder of fiscal 2012 is scheduled for today, June 1, 2011, 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 June 15, 2011. To access the telephone replay, listeners should dial (877) 870-5176. The access code for the replay is 6133650.

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 45 Vera Bradley stores nationwide. Vera Bradley handbags, accessories, and paper & gift and travel 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 Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 29, 2011. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.

Contact

Investor Relations:

ICR, Inc.

Joseph Teklits

Jean Fontana

Jean.fontana@icrinc.com

203-682-8200

Public Relations:

877-708-VERA (8372)

Mediacontact@verabradley.com


Vera Bradley, Inc.

Consolidated Balance Sheets

($ in thousands)

(unaudited)

 

 

     April 30,
2011
     January 29,
2011
    May 1,
2010
 

Assets

       

Current assets:

       

Cash and cash equivalents

   $ 4,318       $ 13,953      $ 1,350   

Accounts receivable, net

     35,467         34,300        37,640   

Inventories

     101,913         96,717        72,758   

Other current assets

     6,800         6,754        4,826   

Deferred income taxes

     9,191         8,743        —     
                         

Total current assets

     157,689         160,467        116,574   

Property, plant, and equipment, net

     43,554         42,984        40,181   

Restricted cash

     —           —          1,500   

Other assets

     2,651         2,588        1,543   
                         

Total assets

   $ 203,894       $ 206,039      $ 159,798   
                         

Liabilities and Shareholders’ Equity

       

Current liabilities:

       

Accounts payable

   $ 29,938       $ 30,012      $ 21,599   

Distributions payable

     —           —          1,091   

Accrued employment costs

     8,914         17,892        8,065   

Other accrued liabilities

     11,933         10,551        11,192   

Income taxes payable

     7,408         10,010        —     

Current portion of long-term debt

     85         83        5,022   
                         

Total current liabilities

     58,278         68,548        46,969   

Long-term debt

     61,912         66,934        29,858   

Deferred income taxes

     3,615         3,300        —     

Other long-term liabilities

     4,247         2,935        1,585   
                         

Total liabilities

     128,052         141,717        78,412   
                         

Shareholders’ equity:

       

Common stock

     —           —          1   

Additional paid-in capital

     72,219         71,923        —     

Retained earnings (accumulated deficit)

     3,623         (7,601     81,385   
                         

Total shareholders’ equity

     75,842         64,322        81,386   
                         

Total liabilities and shareholders’ equity

   $ 203,894       $ 206,039      $ 159,798   
                         


Vera Bradley, Inc.

Consolidated Statements of Income

($ in thousands, except per share amounts)

(unaudited)

 

 

     Thirteen Weeks Ended  
     April 30,
2011
     May 1,
2010
 

Net revenues

   $ 101,390       $ 85,002   

Cost of sales

     44,946         36,189   
                 

Gross profit

     56,444         48,813   

Selling, general, and administrative expenses

     39,989         33,888   

Other income

     2,605         2,376   
                 

Operating income

     19,060         17,301   

Interest expense, net

     316         308   
                 

Income before income taxes

     18,744         16,993   

Income tax expense

     7,520         199   
                 

Net income

   $ 11,224       $ 16,794   
                 

Basic weighted-average shares outstanding

     40,506,670         35,440,547   

Diluted weighted-average shares outstanding

     40,532,169         35,440,547   

Basic net income per share

   $ 0.28       $ 0.47   

Diluted net income per share

     0.28         0.47   


Vera Bradley, Inc.

Supplemental Information - Consolidated Statements of Income

Reconciliation of GAAP to Non-GAAP Financial Measures

Thirteen Weeks Ended May 1, 2010

($ in thousands, except per share amounts)

(unaudited)

 

 

     GAAP      Tax and Share-
Count
Adjustments
     Adjusted  

Income before income taxes

   $ 16,993          $ 16,993   

Income tax expense*

     199         6,598         6,797   
                    

Net income

   $ 16,794          $ 10,196   
                    

Basic weighted-average shares outstanding**

     35,440,547         5,066,123         40,506,670   

Diluted weighted-average shares outstanding**

     35,440,547         5,091,622         40,532,169   

Basic net income per share

   $ 0.47          $ 0.25   

Diluted net income per share

     0.47            0.25   

 

* Adjusted income tax expense assumes a combined federal, state, and local effective tax rate of 40%.
** Adjusted weighted-average shares outstanding for the thirteen weeks ended May 1, 2010, equal GAAP weighted-average shares outstanding for the thirteen weeks ended April 30, 2011.


Vera Bradley, Inc.

Consolidated Statements of Cash Flows

($ in thousands)

(unaudited)

 

 

     Thirteen Weeks Ended  
     April 30,
2011
    May 1,
2010
 

Cash flows from operating activities

    

Net income

   $ 11,224      $ 16,794   

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

    

Depreciation and amortization of property, plant, and equipment

     2,110        2,043   

Provision for doubtful accounts

     41        149   

Stock-based compensation

     220        —     

Deferred income taxes

     (133     —     

Changes in assets and liabilities:

    

Accounts receivable

     (1,208     (6,775

Inventories

     (5,196     (6,224

Other assets

     (109     1,703   

Accounts payable

     (74     564   

Accrued and other liabilities

     (8,886     (4,570
                

Net cash provided by (used in) operating activities

     (2,011     3,684   
                

Cash flows from investing activities

    

Purchases of property, plant, and equipment

     (2,680     (2,100
                

Net cash used in investing activities

     (2,680     (2,100
                

Cash flows from financing activities

    

Payments on financial-institution debt

     (10,000     (14,550

Borrowings on financial-institution debt

     5,000        19,300   

Payments on vendor-financed debt

     (20     (5

Change in bank overdraft

     —          1,813   

Payments of distributions

     —          (13,301

Other

     76        —     
                

Net cash used in financing activities

     (4,944     (6,743
                

Decrease in cash and cash equivalents

     (9,635     (5,159

Cash and cash equivalents, beginning of period

     13,953        6,509   
                

Cash and cash equivalents, end of period

   $ 4,318      $ 1,350