NASHVILLE, Tenn., Dec. 3, 2020 /PRNewswire/ -- Kirkland's,
Inc. (NASDAQ: KIRK) today announced financial results for its third
fiscal quarter ended October 31, 2020
and the authorization of a new share repurchase plan.
"The momentum we established late last year has continued
through the third quarter with positive comparable sales in both
the store and e-commerce channels exceeding our expectations,
significant year-over-year margin improvement and permanent cost
reductions driving earnings growth and cash generation," noted
Woody Woodward, Chief Executive
Officer. "While home furnishing is currently receiving the benefit
of the reallocation of customer spending, there is much within this
transformation of Kirkland's that is a direct result of our own
actions and investments. We have elevated the merchandise
assortment with improved quality and design while maintaining our
value proposition, improved our customer experience both in store
and online and adapted our financial and operating infrastructure
to maximize profitability. We are pleased with the impact
these changes have had on our performance and are even more
encouraged by the fact that the benefits have become very evident
at these early stages of our evolution."
Mr. Woodward added, "The increased demand driven by our
e-commerce channel and the strong performance in both our harvest
and Christmas season merchandise more than offset the 51 fewer
stores in the base from a year ago. The late October re-launch of
our loyalty program has already added hundreds of thousands of new
members in a few weeks' time, and we are pleased with the response
to Black Friday and Cyber Monday. Similar to others in our sector,
we continued to experience a shift to online during the month of
November with Black Friday shopping spread out over a longer
period. We believe we have established a good start to the fourth
quarter by growing profitability with year-over-year margin gains
and a solid comparable sales improvement, particularly in
e-commerce."
Strategic Priorities and Financial Goals
Kirkland's key strategic initiatives include:
- Accelerating product development to reinforce quality and
relevancy as we continue the transformation of the Kirkland's brand
into a specialty retailer where customers are able to furnish their
entire home on a budget;
- Improving omni-channel via website enhancements, more focused
marketing spend, an expanded online assortment, and an in-store
experience that is aligned with our omni-channel capabilities;
- Improving the customer experience with a re-launch of our
loyalty program, extended credit options and broadened delivery
options; and
- Utilizing our leaner infrastructure to be more nimble in our
response to changes in consumer preference and buying
behaviors.
Kirkland's annual financial goals for the next two to three
years include:
- Improving comparable sales performance, driven by e-commerce
growth, merchandising, brick-and-mortar store productivity and
closure of underperforming stores. We expect e-commerce to
continue to grow as a percent of our total business, but also
intend to focus on improving the contribution of our remaining
store base, which is an integral part of our omni-channel strategy
and supports improved profitability of our e-commerce sales.
- Stabilizing gross margin by continuing with our current
discipline of limited promotional offers, expanding direct
sourcing, improving supply chain efficiency and reducing occupancy
costs. With improved merchandise quality and to support a
better customer experience, we will continue to move towards more
targeted promotions. Direct sourcing is expected to increase from
approximately 20% of purchases in 2020 to 40% to 50% over the next
two to three years. With these product margin improvements,
continued efficiencies in our supply chain and lower occupancy
costs, our goal is to improve our annual gross profit margin to a
low to mid-30% range over the next two to three years.
- Improving profitability by leveraging the leaner
infrastructure with comparable sales growth. We believe our
ideal store count should be in the range of 300 to 350 stores. With
nearly one-third of our store leases up for renewal within the next
12 months, we believe there will be additional opportunities for
more favorable rent terms. With approximately $45 million in annualized operating expenses
eliminated from the business, we have a goal of reaching annual
EBITDA as a percent of sales in the high-single-digit range and
annual operating income in the mid-single-digit range within two to
three years.
- Maintaining adequate liquidity and generating free cash flow
while continuing to invest in key strategic initiatives of the
business and returning excess cash to our shareholders. Our
goal is to continue to build cash throughout fiscal 2020 and end
the year with no debt. Within our two to three-year timeframe, we
also expect to generate increasing free cash flow.
The key strategic initiatives and financial goals are based on
current information as of December 3,
2020, and are dependent on, among other things, consumer
preferences, economic conditions and our own successful execution
of these initiatives. The information on which these initiatives
and financial goals is based is subject to change, and investors
are cautioned that the Company may update the initiatives and
goals, or any portion thereof, at any time for any reason.
Board Authorizes $20 Million
Share Repurchase Plan
Kirkland's also announced today that its Board of Directors has
authorized a new share repurchase plan providing for the purchase
in the aggregate of $20 million of
the Company's outstanding common stock. Repurchases of shares will
be made in accordance with applicable securities laws and may be
made from time to time in the open market or by negotiated
transactions. The amount and timing of repurchases will be
based on a variety of factors, including stock price, regulatory
limitations and other market and economic factors. The share
repurchase plan does not require the Company to repurchase any
specific number of shares, and the Company may terminate the
repurchase plan at any time.
Investor Conference Call and Web Simulcast
Kirkland's will hold its earnings call for the third quarter
later today at 9:00 a.m. ET. Participating on the call will be
Steve Woodward, Chief Executive
Officer and Nicole Strain, Chief
Financial Officer. The number to call for the interactive
teleconference is (412) 542-4163. A replay of the conference
call will be available through Thursday, December 10, 2020 by
dialing (412) 317-0088 and entering the confirmation number
10149811.
A live webcast of Kirkland's quarterly conference call will be
available online on the Company's Investor Relations Page on
December 3, 2020, beginning at
9:00 a.m. ET. The online replay will follow shortly after the
call and continue for one year.
About Kirkland's, Inc.
Kirkland's, Inc. is a specialty retailer of home décor in
the United States, currently
operating 381 stores in 35 states as well as an e-commerce website,
www.kirklands.com. The Company's stores present a curated selection
of distinctive merchandise, including holiday décor, furniture,
wall décor, art, textiles, mirrors, fragrances, lamps and other
home decorating items. The Company's stores offer an extensive
assortment of holiday merchandise during seasonal periods. The
Company provides its customers an engaging shopping experience
characterized by casual, comfortable merchandise with a southern
feel and a modern flair at a discernible value. This combination of
quality and stylish merchandise, value pricing and a stimulating
online and store experience has led the Company to develop a loyal
customer base. More information can be found at
www.kirklands.com.
Forward-Looking Statements
Except for historical information contained herein, the
statements in this release, including all statements related to
future initiatives, financial goals and expectations regarding any
future period, are forward-looking and made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995 and are subject to the finalization of the Company's
quarterly financial and accounting procedures. Forward-looking
statements involve known and unknown risks and uncertainties, which
may cause Kirkland's actual results to differ materially from
forecasted results. Those risks and uncertainties include, among
other things, risks associated with the Company's progress and
anticipated progress towards its long-term objective and the
success of its plans in response to the novel coronavirus
("COVID-19"), the spread of COVID-19 and its impact on the
Company's revenues and supply chain, risks associated with COVID-19
and the governments responses to it, the impact of store closures
in 2020, the effectiveness of the Company's marketing campaigns,
risks related to changes in U.S. policy related to imported
merchandise, particularly with regard to the impact of tariffs on
goods imported from China and
strategies undertaken to mitigate such impact, the Company's
ability to retain its senior management team, continued volatility
in the price of the Company's common stock, the competitive
environment in the home décor industry in general and in Kirkland's
specific market areas, inflation, fluctuations in cost and
availability of products, interruptions in supply chain and
distribution systems, including our e-commerce systems and
channels, the ability to control employment and other operating
costs, availability of suitable retail locations and other growth
opportunities, disruptions in information technology systems
including the potential for security breaches of Kirkland's or its
customers' information, seasonal fluctuations in consumer spending,
and economic conditions in general. Those and other risks are more
fully described in Kirkland's filings with the Securities and
Exchange Commission, including the Company's Annual Report
on Form 10-K filed on April 10,
2020 and subsequent reports. Forward-looking statements
included in this release are made as of the date of this release.
Any changes in assumptions or factors on which such statements are
based could produce materially different results. Kirkland's
disclaims any obligation to update any such factors or to publicly
announce results of any revisions to any of the forward-looking
statements contained herein to reflect future events or
developments.
|
KIRKLAND'S,
INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS
OF OPERATIONS
(In thousands, except per share
data)
|
|
|
|
|
|
13-Week Period
Ended
|
|
|
|
October
31,
|
|
|
November
2,
|
|
|
|
2020
|
|
|
2019
|
|
|
Net sales
|
|
$
|
146,609
|
|
|
$
|
144,936
|
|
|
Cost of
sales
|
|
|
93,738
|
|
|
|
104,800
|
|
|
Gross
profit
|
|
|
52,871
|
|
|
|
40,136
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
21,343
|
|
|
|
29,115
|
|
|
Other operating
expenses
|
|
|
16,682
|
|
|
|
20,208
|
|
|
Depreciation
(exclusive of depreciation included in cost of sales)
|
|
|
1,613
|
|
|
|
1,602
|
|
|
Asset
impairment
|
|
|
177
|
|
|
|
3,392
|
|
|
Total operating
expenses
|
|
|
39,815
|
|
|
|
54,317
|
|
|
Operating income
(loss)
|
|
|
13,056
|
|
|
|
(14,181)
|
|
|
Other expense,
net
|
|
|
9
|
|
|
|
11
|
|
|
Income (loss) before
income taxes
|
|
|
13,047
|
|
|
|
(14,192)
|
|
|
Income tax
expense
|
|
|
691
|
|
|
|
8,114
|
|
|
Net income
(loss)
|
|
$
|
12,356
|
|
|
$
|
(22,306)
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.87
|
|
|
$
|
(1.61)
|
|
|
Diluted
|
|
$
|
0.82
|
|
|
$
|
(1.61)
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,249
|
|
|
|
13,867
|
|
|
Diluted
|
|
|
15,075
|
|
|
|
13,867
|
|
|
KIRKLAND'S,
INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS
OF OPERATIONS
(In thousands, except per share
data)
|
|
|
|
|
|
|
|
39-Week Period
Ended
|
|
|
|
October
31,
|
|
|
November
2,
|
|
|
|
2020
|
|
|
2019
|
|
|
Net sales
|
|
$
|
348,578
|
|
|
$
|
394,469
|
|
|
Cost of
sales
|
|
|
249,751
|
|
|
|
291,541
|
|
|
Gross
profit
|
|
|
98,827
|
|
|
|
102,928
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
60,157
|
|
|
|
83,333
|
|
|
Other operating
expenses
|
|
|
44,843
|
|
|
|
54,998
|
|
|
Depreciation
(exclusive of depreciation included in cost of sales)
|
|
|
4,683
|
|
|
|
5,177
|
|
|
Asset
impairment
|
|
|
9,027
|
|
|
|
7,251
|
|
|
Total operating
expenses
|
|
|
118,710
|
|
|
|
150,759
|
|
|
Operating
loss
|
|
|
(19,883)
|
|
|
|
(47,831)
|
|
|
Other expense
(income), net
|
|
|
212
|
|
|
|
(405)
|
|
|
Loss before income
taxes
|
|
|
(20,095)
|
|
|
|
(47,426)
|
|
|
Income tax (benefit)
expense
|
|
|
(15,650)
|
|
|
|
921
|
|
|
Net loss
|
|
$
|
(4,445)
|
|
|
$
|
(48,347)
|
|
|
Loss per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.31)
|
|
|
$
|
(3.42)
|
|
|
Diluted
|
|
$
|
(0.31)
|
|
|
$
|
(3.42)
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,121
|
|
|
|
14,116
|
|
|
Diluted
|
|
|
14,121
|
|
|
|
14,116
|
|
|
KIRKLAND'S,
INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE
SHEETS
(In thousands)
|
|
|
|
|
|
October
31,
|
|
|
February
1,
|
|
|
November
2,
|
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
37,189
|
|
|
$
|
30,132
|
|
|
$
|
4,202
|
|
|
Inventories,
net
|
|
|
83,874
|
|
|
|
94,674
|
|
|
|
140,222
|
|
|
Income taxes
receivable
|
|
|
5,441
|
|
|
|
243
|
|
|
|
547
|
|
|
Prepaid expenses and
other current assets
|
|
|
9,586
|
|
|
|
6,462
|
|
|
|
7,870
|
|
|
Total current
assets
|
|
|
136,090
|
|
|
|
131,511
|
|
|
|
152,841
|
|
|
Property and
equipment, net
|
|
|
68,140
|
|
|
|
82,863
|
|
|
|
96,096
|
|
|
Operating lease
right-of-use assets
|
|
|
156,924
|
|
|
|
200,067
|
|
|
|
210,213
|
|
|
Deferred income
taxes
|
|
|
—
|
|
|
|
1,525
|
|
|
|
944
|
|
|
Other
assets
|
|
|
5,831
|
|
|
|
6,476
|
|
|
|
6,283
|
|
|
Total
assets
|
|
$
|
366,985
|
|
|
$
|
422,442
|
|
|
$
|
466,377
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
53,339
|
|
|
$
|
59,513
|
|
|
$
|
68,395
|
|
|
Accrued
expenses
|
|
|
27,037
|
|
|
|
28,773
|
|
|
|
23,527
|
|
|
Operating lease
liabilities
|
|
|
46,015
|
|
|
|
53,154
|
|
|
|
53,210
|
|
|
Total current
liabilities
|
|
|
126,391
|
|
|
|
141,440
|
|
|
|
145,132
|
|
|
Operating lease
liabilities
|
|
|
159,030
|
|
|
|
195,736
|
|
|
|
206,789
|
|
|
Revolving line of
credit
|
|
|
—
|
|
|
|
—
|
|
|
|
25,000
|
|
|
Other
liabilities
|
|
|
8,147
|
|
|
|
8,311
|
|
|
|
8,883
|
|
|
Total
liabilities
|
|
|
293,568
|
|
|
|
345,487
|
|
|
|
385,804
|
|
|
Net
shareholders' equity
|
|
|
73,417
|
|
|
|
76,955
|
|
|
|
80,573
|
|
|
Total liabilities and
shareholders' equity
|
|
$
|
366,985
|
|
|
$
|
422,442
|
|
|
$
|
466,377
|
|
|
KIRKLAND'S,
INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS
(In thousands)
|
|
|
|
|
|
39-Week Period
Ended
|
|
|
|
October
31,
|
|
|
November
2,
|
|
|
|
2020
|
|
|
2019
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(4,445)
|
|
|
$
|
(48,347)
|
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation of
property and equipment
|
|
|
17,810
|
|
|
|
21,156
|
|
|
Amortization of debt
issue costs
|
|
|
70
|
|
|
|
41
|
|
|
Asset
impairment
|
|
|
9,027
|
|
|
|
7,251
|
|
|
Cumulative effect of
change in accounting principle
|
|
|
—
|
|
|
|
(331)
|
|
|
Loss on disposal of
property and equipment
|
|
|
104
|
|
|
|
150
|
|
|
Stock-based
compensation expense
|
|
|
912
|
|
|
|
1,995
|
|
|
Deferred income
taxes
|
|
|
1,525
|
|
|
|
759
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
Inventories,
net
|
|
|
10,800
|
|
|
|
(55,788)
|
|
|
Prepaid expenses and
other current assets
|
|
|
(3,124)
|
|
|
|
2,443
|
|
|
Accounts
payable
|
|
|
(4,735)
|
|
|
|
27,845
|
|
|
Accounts payable to
related party vendor
|
|
|
—
|
|
|
|
(8,166)
|
|
|
Accrued
expenses
|
|
|
(1,704)
|
|
|
|
(3,547)
|
|
|
Income taxes
receivable
|
|
|
(5,230)
|
|
|
|
(1,041)
|
|
|
Operating lease assets
and liabilities
|
|
|
(7,091)
|
|
|
|
(7,161)
|
|
|
Other assets and
liabilities
|
|
|
570
|
|
|
|
300
|
|
|
Net cash provided by
(used in) operating activities
|
|
|
14,489
|
|
|
|
(62,441)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of
property and equipment
|
|
|
168
|
|
|
|
—
|
|
|
Capital
expenditures
|
|
|
(7,580)
|
|
|
|
(12,759)
|
|
|
Net cash used in
investing activities
|
|
|
(7,412)
|
|
|
|
(12,759)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Borrowings on
revolving line of credit
|
|
|
40,000
|
|
|
|
25,000
|
|
|
Repayments on
revolving line of credit
|
|
|
(40,000)
|
|
|
|
—
|
|
|
Refinancing
costs
|
|
|
(15)
|
|
|
|
—
|
|
|
Cash used in net
share settlement of restricted stock
|
|
|
(52)
|
|
|
|
(77)
|
|
|
Proceeds received
from employees exercising stock options
|
|
|
12
|
|
|
|
—
|
|
|
Employee stock
purchases
|
|
|
35
|
|
|
|
190
|
|
|
Repurchase and
retirement of common stock
|
|
|
—
|
|
|
|
(3,657)
|
|
|
Net cash (used in)
provided by financing activities
|
|
|
(20)
|
|
|
|
21,456
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease)
|
|
|
7,057
|
|
|
|
(53,744)
|
|
|
Beginning of the
period
|
|
|
30,132
|
|
|
|
57,946
|
|
|
End of the
period
|
|
$
|
37,189
|
|
|
$
|
4,202
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
schedule of non-cash activities:
|
|
|
|
|
|
|
|
|
|
Non-cash accruals for
purchases of property and equipment
|
|
$
|
414
|
|
|
$
|
1,818
|
|
|
Operating lease assets
and liabilities recognized upon adoption of ASC 842
|
|
|
—
|
|
|
|
295,240
|
|
Non-GAAP Financial Measures
To supplement our unaudited consolidated condensed financial
statements presented in accordance with generally accepted
accounting principles ("GAAP"), this earnings release and the
related earnings conference call contain certain non-GAAP financial
measures, including EBITDA, adjusted EBITDA, adjusted operating
income (loss), adjusted net income (loss) and adjusted diluted
income (loss) per share. These measures are not in accordance with,
and are not intended as alternatives to, GAAP. The Company uses
these non-GAAP financial measures internally in analyzing our
financial results and believes that they provide useful information
to analysts and investors, as a supplement to GAAP measures, in
evaluating our operational performance.
The Company defines EBITDA as net income or loss before
interest, provision for income tax, and depreciation and
amortization, adjusted EBITDA as EBITDA with non-GAAP adjustments
and adjusted operating income (loss) as operating income (loss)
with non-GAAP adjustments. The Company defines adjusted net income
(loss) and adjusted diluted income (loss) per share by adjusting
the applicable GAAP measure for non-GAAP adjustments.
Non-GAAP measures are intended to provide additional information
only and do not have any standard meanings prescribed by GAAP. Use
of these terms may differ from similar measures reported by other
companies. Each non-GAAP measure has its limitations as an
analytical tool, and you should not consider them in isolation or
as a substitute for analysis of the Company's results as reported
under GAAP.
The following table shows a reconciliation of operating income
(loss) to EBITDA, adjusted EBITDA and adjusted operating income
(loss) for the 13 weeks and 39 weeks ended October 31, 2020 and November 2, 2019 and a reconciliation of net
income (loss) and diluted income (loss) per share to adjusted net
income (loss) and adjusted diluted income (loss) per share for the
13 weeks and 39 weeks ended October 31,
2020 and November 2, 2019:
|
KIRKLAND'S,
INC.
UNAUDITED NON-GAAP MEASURE
RECONCILIATION
(In thousands, except per share
data)
|
|
|
|
|
|
13-Week Period
Ended
|
|
|
39-Week Period
Ended
|
|
|
|
October 31,
2020
|
|
|
November 2,
2019
|
|
|
October 31,
2020
|
|
|
November 2,
2019
|
|
|
Operating income
(loss)
|
|
$
|
13,056
|
|
|
$
|
(14,181)
|
|
|
$
|
(19,883)
|
|
|
$
|
(47,831)
|
|
|
Depreciation and
amortization
|
|
|
5,824
|
|
|
|
6,861
|
|
|
|
17,810
|
|
|
|
21,156
|
|
|
EBITDA
|
|
|
18,880
|
|
|
|
(7,320)
|
|
|
|
(2,073)
|
|
|
|
(26,675)
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed store and lease
termination costs in cost of sales(1)
|
|
|
(752)
|
|
|
|
—
|
|
|
|
(695)
|
|
|
|
—
|
|
|
Asset
impairment(2)
|
|
|
177
|
|
|
|
3,392
|
|
|
|
9,027
|
|
|
|
7,251
|
|
|
Stock-based
compensation expense(3)
|
|
|
276
|
|
|
|
704
|
|
|
|
912
|
|
|
|
1,995
|
|
|
Severance
charges(4)
|
|
|
10
|
|
|
|
141
|
|
|
|
890
|
|
|
|
928
|
|
|
Other costs included
in operating expenses(5)
|
|
|
70
|
|
|
|
—
|
|
|
|
204
|
|
|
|
119
|
|
|
Total adjustments in
operating expenses
|
|
|
533
|
|
|
|
4,237
|
|
|
|
11,033
|
|
|
|
10,293
|
|
|
Total non-GAAP
adjustments
|
|
|
(219)
|
|
|
|
4,237
|
|
|
|
10,338
|
|
|
|
10,293
|
|
|
Adjusted
EBITDA
|
|
|
18,661
|
|
|
|
(3,083)
|
|
|
|
8,265
|
|
|
|
(16,382)
|
|
|
Depreciation and
amortization
|
|
|
5,824
|
|
|
|
6,861
|
|
|
|
17,810
|
|
|
|
21,156
|
|
|
Adjusted operating
income (loss)
|
|
$
|
12,837
|
|
|
$
|
(9,944)
|
|
|
$
|
(9,545)
|
|
|
$
|
(37,538)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
12,356
|
|
|
$
|
(22,306)
|
|
|
$
|
(4,445)
|
|
|
$
|
(48,347)
|
|
|
Non-GAAP adjustments,
net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed store and lease
termination costs in cost of sales(1)
|
|
|
(577)
|
|
|
|
—
|
|
|
|
(533)
|
|
|
|
—
|
|
|
Asset
impairment(2)
|
|
|
121
|
|
|
|
2,548
|
|
|
|
6,927
|
|
|
|
5,526
|
|
|
Stock-based
compensation expense, including tax impact(3)
|
|
|
196
|
|
|
|
954
|
|
|
|
1,082
|
|
|
|
2,397
|
|
|
Severance
charges(4)
|
|
|
6
|
|
|
|
100
|
|
|
|
683
|
|
|
|
707
|
|
|
Other costs included
in operating expenses(5)
|
|
|
54
|
|
|
|
—
|
|
|
|
155
|
|
|
|
92
|
|
|
Total adjustments in
operating expenses
|
|
|
377
|
|
|
|
3,602
|
|
|
|
8,847
|
|
|
|
8,722
|
|
|
Tax valuation
allowance(6)
|
|
|
(2,431)
|
|
|
|
11,336
|
|
|
|
3,040
|
|
|
|
11,336
|
|
|
CARES Act - net
operating loss carry back(7)
|
|
|
268
|
|
|
|
—
|
|
|
|
(14,328)
|
|
|
|
—
|
|
|
Total non-GAAP
adjustments, net of tax
|
|
|
(2,363)
|
|
|
|
14,938
|
|
|
|
(2,974)
|
|
|
|
20,058
|
|
|
Adjusted net income
(loss)
|
|
$
|
9,993
|
|
|
$
|
(7,368)
|
|
|
$
|
(7,419)
|
|
|
$
|
(28,289)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per share
|
|
$
|
0.82
|
|
|
$
|
(1.61)
|
|
|
$
|
(0.31)
|
|
|
$
|
(3.42)
|
|
|
Adjusted diluted
income (loss) per share
|
|
$
|
0.66
|
|
|
$
|
(0.53)
|
|
|
$
|
(0.53)
|
|
|
$
|
(2.00)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
|
|
15,075
|
|
|
|
13,867
|
|
|
|
14,121
|
|
|
|
14,116
|
|
|
Adjusted diluted
weighted average shares outstanding
|
|
|
15,075
|
|
|
|
13,867
|
|
|
|
14,121
|
|
|
|
14,116
|
|
|
(1)
|
Costs associated with
closed stores and lease termination costs, including amounts paid
to third-parties for rent reduction negotiations, lease termination
fees paid to landlords for store closings and gains on lease
terminations.
|
|
(2)
|
Impairment charges
include both right-of-use asset and property and equipment
impairment charges.
|
|
(3)
|
Stock-based
compensation expense includes amounts expensed related to equity
incentive plans.
|
|
(4)
|
Severance charges
include expenses related to severance agreements. This also
includes permanent store closure compensation costs.
|
|
(5)
|
Other costs include
corporate lease negotiation fees associated with rent reduction in
fiscal 2020 and write-offs of excess and obsolete supplies in
fiscal 2019.
|
|
(6)
|
To remove the impact
of the Company's valuation allowance against deferred tax
assets.
|
|
(7)
|
The Company recorded
an income tax expense (benefit) related to the carry back of fiscal
2019 and estimated fiscal 2020 federal net operating losses to
prior periods as permitted under the CARES Act in fiscal
2020.
|
Contact:
Kirkland's
Nicole Strain
(615) 872-4800
Investor Relations
IR@Kirklands.com
(615) 872-4898
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SOURCE Kirkland's, Inc.