- Net sales $639 million, growth of 4%
-
Diluted EPS $0.71, growth of 4%; adjusted diluted EPS $0.72,
decline of 2% -
Returned $214 million to shareholders through share repurchases and
dividends in the first half of fiscal 2016 -
Company revises fiscal 2016 sales forecast to growth of 5% – 6%
(previously growth of 6% – 7%) and adjusted diluted EPS forecast to
growth of approximately 10% (previously growth of 10% – 12%)
ATLANTA–(BUSINESS WIRE)–Carter’s, Inc. (NYSE:CRI), the largest branded marketer in the United
States and Canada of apparel exclusively for babies and young children,
today reported its second quarter fiscal 2016 results.
“We achieved our sales and earnings objectives in the second quarter,”
said Michael D. Casey, Chairman and Chief Executive Officer. “Our sales
growth was driven by higher demand in our retail and international
businesses. We are expecting good growth in the balance of the year, and
have revised our previous forecasts to reflect the current outlook for
our wholesale and international businesses.”
Consolidated Results
Second Quarter of Fiscal 2016 compared to Second Quarter of Fiscal
2015
Net sales increased $26.7 million, or 4.4%, to $639.5 million,
reflecting growth in the Company’s U.S. Carter’s and OshKosh retail
businesses as well as in its international segment. Changes in foreign
currency exchange rates in the second quarter of fiscal 2016 compared to
the second quarter of fiscal 2015 negatively impacted consolidated net
sales in the second quarter of fiscal 2016 by $2.5 million, or 0.4%. On
a constant currency basis, consolidated net sales increased 4.8% in the
second quarter of fiscal 2016.
Operating income in the second quarter of fiscal 2016 increased $1.3
million, or 2.1%, to $63.2 million, compared to $62.0 million in the
second quarter of fiscal 2015. Operating margin decreased approximately
20 basis points to 9.9%, compared to 10.1% in the second quarter of
fiscal 2015. Adjusted operating income (a non-GAAP measure) decreased
$1.4 million, or 2.1%, to $64.0 million, compared to $65.4 million in
the second quarter of fiscal 2015. Adjusted operating margin (a non-GAAP
measure) decreased approximately 70 basis points to 10.0%, compared to
10.7% in the second quarter of fiscal 2015, which reflects improved
gross margin offset by increased investments in store expansion,
technology, marketing, and China eCommerce.
Net income in the second quarter of fiscal 2016 increased $0.1 million,
or 0.3%, to $36.2 million, or $0.71 per diluted share, compared to $36.1
million, or $0.68 per diluted share, in the second quarter of fiscal
2015. Adjusted net income (a non-GAAP measure) decreased $2.1 million,
or 5.4%, to $36.7 million, compared to $38.8 million in the second
quarter of fiscal 2015. Adjusted earnings per diluted share (a non-GAAP
measure) in the second quarter of fiscal 2016 decreased 1.7% to $0.72,
compared to $0.73 in the second quarter of fiscal 2015.
First Half of Fiscal 2016 compared to First Half of Fiscal 2015
Net sales increased $66.0 million, or 5.1%, to $1.36 billion, reflecting
growth in the Company’s U.S. Carter’s and OshKosh retail
and Carter’s wholesale businesses, as well as in its
international segment. Changes in foreign currency exchange rates in the
first half of fiscal 2016 compared to the first half of fiscal 2015
negatively impacted consolidated net sales in the first half of fiscal
2016 by $7.0 million, or 0.5%. On a constant currency basis,
consolidated net sales increased 5.6% in the first half of fiscal 2016.
Operating income in the first half of fiscal 2016 increased $9.8
million, or 6.7%, to $156.3 million, compared to $146.5 million in the
first half of fiscal 2015. Operating margin increased approximately 20
basis points to 11.5%, compared to 11.3% in the first half of fiscal
2015. Adjusted operating income (a non-GAAP measure) increased $5.3
million, or 3.5%, to $158.0 million, compared to $152.7 million in the
first half of fiscal 2015. Adjusted operating margin (a non-GAAP
measure) decreased approximately 20 basis points to 11.6%, compared to
11.8% in the first half of fiscal 2015, which reflects improved gross
margin offset by increased investments in our growth initiatives.
Net income in the first half of fiscal 2016 increased $4.3 million, or
5.0%, to $90.2 million, or $1.75 per diluted share, compared to $85.9
million, or $1.62 per diluted share, in the first half of fiscal 2015.
Adjusted net income (a non-GAAP measure) increased $0.8 million, or
0.8%, to $91.3 million, compared to $90.5 million in the first half of
fiscal 2015. Adjusted earnings per diluted share (a non-GAAP measure) in
the first half of fiscal 2016 increased 3.9% to $1.77, compared to $1.70
in the first half of fiscal 2015.
Cash flow from operations in the first half of fiscal 2016 was $85.6
million compared to $27.1 million in the first half of fiscal 2015. The
increase reflected favorable changes in net working capital and an
increase in net income.
See the “Reconciliation of GAAP to Adjusted Results” section of this
release for additional disclosures and reconciliations regarding
non-GAAP measures.
Business Segment Results
During the second quarter and first half of fiscal 2016, the Company
believes, based on analysis of credit card transactions and other data,
that Carter’s and OshKosh retail comparable sales were
negatively affected by lower demand from international consumers
shopping in its U.S. stores and on its website, which was likely
influenced by the strength of the U.S. dollar relative to other global
currencies.
Carter’s Retail Segment
Second Quarter of Fiscal 2016 compared to Second Quarter of Fiscal
2015
Carter’s retail segment sales increased $26.9 million, or 10.9%,
to $273.8 million. Carter’s retail comparable sales increased
4.4%, comprised of eCommerce comparable sales growth of 17.4% and a
stores comparable sales increase of 1.4%.
In the second quarter of fiscal 2016, the Company opened 15 Carter’s
stores and closed one store in the United States.
First Half of Fiscal 2016 compared to First Half of Fiscal 2015
Carter’s retail segment sales increased $41.4 million, or 8.2%,
to $546.2 million. Carter’s retail comparable sales increased
2.1%, comprised of eCommerce comparable sales growth of 16.3%, partially
offset by a stores comparable sales decline of 1.4%.
In the first half of fiscal 2016, the Company opened 31 Carter’s
stores and closed one store in the United States. The Company operated
624 Carter’s stores in the United States as of July 2, 2016.
Carter’s Wholesale Segment
Second Quarter of Fiscal 2016 compared to Second Quarter of Fiscal
2015
Carter’s wholesale segment net sales decreased $6.0 million, or
2.8%, to $205.7 million, reflecting a decrease in product demand, in
part due to timing of orders.
First Half of Fiscal 2016 compared to First Half of Fiscal 2015
Carter’s wholesale segment net sales increased $4.8 million, or
1.0%, to $485.9 million.
OshKosh Retail Segment
Second Quarter of Fiscal 2016 compared to Second Quarter of Fiscal
2015
OshKosh retail segment net sales increased $5.5 million, or 7.5%,
to $79.0 million. OshKosh retail comparable sales declined 1.3%,
comprised of a stores comparable sales decline of 5.8%, partially offset
by eCommerce comparable sales growth of 17.6%.
In the second quarter of fiscal 2016, the Company opened 12 OshKosh
stores in the United States and closed one store.
First Half of Fiscal 2016 compared to First Half of Fiscal 2015
OshKosh retail segment net sales increased $14.2 million, or
9.7%, to $160.7 million. OshKosh retail comparable sales
increased 0.7%, comprised of eCommerce comparable sales growth of 18.8%,
partially offset by a stores comparable sales decline of 3.8%.
In the first half of fiscal 2016, the Company opened 23 OshKosh
stores in the United States and closed two stores. The Company operated
262 OshKosh stores in the United States as of July 2, 2016.
OshKosh Wholesale Segment
Second Quarter of Fiscal 2016 compared to Second Quarter of Fiscal
2015
OshKosh wholesale segment net sales decreased $4.9 million, or
34.4%, to $9.4 million, due to a decrease in the number of units
shipped, reflecting lower seasonal bookings.
First Half of Fiscal 2016 compared to First Half of Fiscal 2015
OshKosh wholesale segment net sales decreased $9.1 million, or
29.8%, to $21.3 million, due to a decrease in the number of units
shipped, reflecting lower seasonal bookings.
International Segment
Second Quarter of Fiscal 2016 compared to Second Quarter of Fiscal
2015
International segment net sales increased $5.3 million, or 8.0%, to
$71.6 million, driven by growth in the Company’s retail businesses in
Canada and new eCommerce sales in China, partially offset by a decline
in sales to international wholesale customers outside Canada and
unfavorable foreign currency exchange rates.
Changes in foreign currency exchange rates in the second quarter of
fiscal 2016 compared to the second quarter of fiscal 2015 negatively
affected international segment net sales in the second quarter of fiscal
2016 by $2.5 million, or 3.7%. On a constant currency basis,
international segment net sales increased 11.7%.
For the second quarter of fiscal 2016, Canada retail comparable sales
increased 8.0%, comprised of stores comparable sales growth of 6.9% and
eCommerce comparable sales growth of 27.4%. In the second quarter of
fiscal 2016, the Company opened one store in Canada.
First Half of Fiscal 2016 compared to First Half of Fiscal 2015
International segment net sales increased $14.6 million, or 10.8%, to
$149.5 million, driven by growth in the Company’s retail businesses in
Canada and new eCommerce sales in China, partially offset by unfavorable
foreign currency exchange rates.
Changes in foreign currency exchange rates in the first half of fiscal
2016 compared to the first half of fiscal 2015 negatively affected
international segment net sales in the first half of fiscal 2016 by $7.0
million, or 5.2%. On a constant currency basis, international segment
net sales increased 16.0%.
For the first half of fiscal 2016, Canada retail comparable sales
increased 11.3%, comprised of stores comparable sales growth of 9.7% and
eCommerce comparable sales growth of 37.4%. In the first half of fiscal
2016, the Company opened three stores in Canada. The Company operated
150 stores in Canada as of July 2, 2016.
Return of Capital
In the second quarter of fiscal 2016, the Company returned a total of
$125.3 million to shareholders through share repurchases and cash
dividends. In the first half of fiscal 2016, the Company returned a
total of $213.9 million to shareholders through share repurchases and
cash dividends, as described below.
During the second quarter of fiscal 2016, the Company repurchased and
retired 1,049,483 shares of its common stock for $108.6 million at an
average price of $103.52 per share. In the first half of fiscal 2016,
the Company repurchased and retired 1,771,847 shares of its common stock
for $180.2 million at an average price of $101.71 per share. Fiscal
year-to-date through July 26, 2016, the Company repurchased and retired
a total of 1,910,247 shares for $195.1 million at an average price of
$102.15 per share. All shares were repurchased in open market
transactions pursuant to applicable regulations for such transactions.
As of July 26, 2016, the total remaining capacity under the Company’s
previously announced repurchase authorizations was approximately $380
million.
During the second quarter of fiscal 2016, the Company paid a cash
dividend of $0.33 per share totaling $16.6 million. In the first half of
fiscal 2016, the Company paid cash dividends of $0.66 per share totaling
$33.7 million. Future declarations of quarterly dividends and the
establishment of related record and payment dates will be at the
discretion of the Company’s Board of Directors based on a number of
factors, including the Company’s future financial performance and other
considerations.
2016 Business Outlook
For the third quarter of fiscal 2016, the Company projects net sales
will increase approximately 6% to 7% compared to the third quarter of
fiscal 2015 and adjusted diluted earnings per share will increase
approximately 6% to 10% compared to adjusted diluted earnings per share
of $1.52 in the third quarter of fiscal 2015.
For fiscal 2016, the Company now projects net sales will increase
approximately 5% to 6% (previously projected growth of 6% to 7%)
compared to fiscal 2015 and adjusted diluted earnings per share will
increase approximately 10% (previously projected growth of 10% to 12%)
compared to adjusted diluted earnings per share of $4.61 in fiscal 2015.
This forecast for fiscal 2016 adjusted earnings per share excludes
anticipated expenses of approximately $1.7 million related to the
amortization of acquired tradenames and other items the Company believes
to be non-representative of underlying business performance.
Conference Call
The Company will hold a conference call with investors to discuss second
quarter fiscal 2016 results and its business outlook on July 27, 2016 at
8:30 a.m. Eastern Daylight Time. To participate in the call, please dial
913-312-0642. To listen to a live broadcast via the internet, please
visit www.carters.com
and select the “Q2 2016 Earnings Conference Call” link under the
“Investor Relations” tab. Presentation materials for the call can be
accessed under the same tab by selecting the link for “News & Events”
followed by “Webcasts & Presentations”. A replay of the call will be
available shortly after the broadcast through August 5, 2016, at
888-203-1112 (U.S. / Canada) or 719-457-0820 (international), passcode
3330148. The replay will also be archived on the Company’s website under
the “Investor Relations” tab.
About Carter’s, Inc.
Carter’s, Inc. is the largest branded marketer in the United States and
Canada of apparel and related products exclusively for babies and young
children. The Company owns the Carter’s and OshKosh B’gosh
brands, two of the most recognized brands in the marketplace. These
brands are sold in leading department stores, national chains, and
specialty retailers domestically and internationally. They are also sold
through more than 1,000 Company-operated stores in the United States and
Canada and on-line at www.carters.com,
www.oshkoshbgosh.com,
and www.cartersoshkosh.ca.
The Company’s Just One You, Precious Firsts, and Genuine
Kids brands are available at Target, and its Child of Mine
brand is available at Walmart. Carter’s is headquartered in Atlanta,
Georgia. Additional information may be found at www.carters.com.
Cautionary Language
This press release contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 relating to the Company’s future
performance, including, without limitation, statements with respect to
the Company’s anticipated financial results for the third quarter of
fiscal 2016 and fiscal year 2016, or any other future period,
assessments of the Company’s performance and financial position, and
drivers of the Company’s sales and earnings growth. Such statements are
based on current expectations only, and are subject to certain risks,
uncertainties, and assumptions. Should one or more of these risks or
uncertainties materialize or not materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from
those anticipated, estimated, or projected. Certain of the risks and
uncertainties that could cause actual results and performance to differ
materially are described in the Company’s most recently filed Annual
Report on Form 10-K and other reports filed with the Securities and
Exchange Commission from time to time under the headings “Risk Factors”
and “Forward-Looking Statements.” Included among the risks and
uncertainties that may impact future results are the risks of: losing
one or more major customers, vendors, or licensees, due to competition,
inadequate quality of the Company’s products, or otherwise; financial
difficulties for one or more of the Company’s major customers, vendors,
or licensees, or an overall decrease in consumer spending; fluctuations
in foreign currency exchange rates; our products not being accepted in
the marketplace, due to quality concerns, changes in consumer preference
and fashion trends, or otherwise; negative publicity, including as a
result of product recalls or otherwise; failure to protect the Company’s
intellectual property; various types of litigation, including class
action litigation brought under various consumer protection, employment,
and privacy and information security laws; a breach of the Company’s
consumer databases, systems, or processes; the risk of slow-downs,
disruptions, or strikes along the Company’s supply chain, including
disruptions resulting from foreign supply sources, the Company’s
distribution centers, or in-sourcing capabilities; unsuccessful
expansion into international markets or failure to successfully manage
legal, regulatory, political and economic risks of the Company’s
existing international operations, including maintaining compliance with
worldwide anti-bribery laws; and an inability to obtain additional
financing on favorable terms. The Company does not undertake any
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events, or otherwise.
|
CARTER’S, INC. |
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|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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|
(dollars in thousands, except per share data) |
|||||||||||||||||||||||||
|
(unaudited) |
|||||||||||||||||||||||||
| Fiscal Quarter Ended | Two Fiscal Quarters Ended | ||||||||||||||||||||||||
| July 2, 2016 | July 4, 2015 | July 2, 2016 | July 4, 2015 | ||||||||||||||||||||||
| Net sales | $ | 639,471 | $ | 612,765 | $ | 1,363,556 | $ | 1,297,529 | |||||||||||||||||
| Cost of goods sold | 357,289 | 349,870 | 770,445 | 750,582 | |||||||||||||||||||||
| Gross profit | 282,182 | 262,895 | 593,111 | 546,947 | |||||||||||||||||||||
| Selling, general, and administrative expenses | 228,464 | 209,296 | 457,460 | 420,479 | |||||||||||||||||||||
| Royalty income | (9,525 | ) | (8,353 | ) | (20,600 | ) | (19,989 | ) | |||||||||||||||||
| Operating income | 63,243 | 61,952 | 156,251 | 146,457 | |||||||||||||||||||||
| Interest expense | 6,803 | 6,935 | 13,542 | 13,627 | |||||||||||||||||||||
| Interest income | (178 | ) | (157 | ) | (385 | ) | (294 | ) | |||||||||||||||||
| Other expense (income), net | 516 | (1,900 | ) | 3,709 | 62 | ||||||||||||||||||||
| Income before income taxes | 56,102 | 57,074 | 139,385 | 133,062 | |||||||||||||||||||||
| Provision for income taxes | 19,904 | 20,969 | 49,207 | 47,165 | |||||||||||||||||||||
| Net income | $ | 36,198 | $ | 36,105 | $ | 90,178 | $ | 85,897 | |||||||||||||||||
| Basic net income per common share | $ | 0.72 | $ | 0.69 | $ | 1.77 | $ | 1.63 | |||||||||||||||||
| Diluted net income per common share | $ | 0.71 | $ | 0.68 | $ | 1.75 | $ | 1.62 | |||||||||||||||||
| Dividend declared and paid per common share | $ | 0.33 | $ | 0.22 | $ | 0.66 | $ | 0.44 | |||||||||||||||||
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CARTER’S, INC. |
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|
BUSINESS SEGMENT RESULTS |
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|
(dollars in thousands) |
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|
(unaudited) |
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| Fiscal Quarter Ended | Two Fiscal Quarters Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| % of | |||||||||||||||||||||||||||||||||||||||||||||||
| % of | % of | % of | Total | ||||||||||||||||||||||||||||||||||||||||||||
| July 2, | Total Net | July 4, | Total Net | July 2, | Total Net | July 4, | Net | ||||||||||||||||||||||||||||||||||||||||
| 2016 | Sales | 2015 | Sales | 2016 | Sales | 2015 | Sales | ||||||||||||||||||||||||||||||||||||||||
|
Net sales: |
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| Carter’s Wholesale | $ | 205,738 | 32.2 | % | $ | 211,730 | 34.6 | % | $ | 485,878 | 35.5 | % | $ | 481,045 | 37.1 | % | |||||||||||||||||||||||||||||||
| Carter’s Retail (a) | 273,832 | 42.8 | % | 246,980 | 40.4 | % | 546,155 | 40.1 | % | 504,707 | 39.0 | % | |||||||||||||||||||||||||||||||||||
| Total Carter’s (U.S.) | 479,570 | 75.0 | % | 458,710 | 75.0 | % | 1,032,033 | 75.6 | % | 985,752 | 76.1 | % | |||||||||||||||||||||||||||||||||||
| OshKosh Retail (a) | 78,950 | 12.3 | % | 73,453 | 12.0 | % | 160,716 | 11.8 | % | 146,495 | 11.3 | % | |||||||||||||||||||||||||||||||||||
| OshKosh Wholesale | 9,384 | 1.5 | % | 14,306 | 2.3 | % | 21,298 | 1.6 | % | 30,357 | 2.3 | % | |||||||||||||||||||||||||||||||||||
| Total OshKosh (U.S.) | 88,334 | 13.8 | % | 87,759 | 14.3 | % | 182,014 | 13.4 | % | 176,852 | 13.6 | % | |||||||||||||||||||||||||||||||||||
| International (b) | 71,567 | 11.2 | % | 66,296 | 10.7 | % | 149,509 | 11.0 | % | 134,925 | 10.3 | % | |||||||||||||||||||||||||||||||||||
| Total net sales | $ | 639,471 | 100.0 | % | $ | 612,765 | 100.0 | % | $ | 1,363,556 | 100.0 | % | $ | 1,297,529 | 100.0 | % | |||||||||||||||||||||||||||||||
| % of | % of | % of | % of | ||||||||||||||||||||||||||||||||||||||||||||
| Segment | Segment | Segment | Segment | ||||||||||||||||||||||||||||||||||||||||||||
|
Operating income (loss): |
Net Sales | Net Sales | Net Sales | Net Sales | |||||||||||||||||||||||||||||||||||||||||||
| Carter’s Wholesale | $ | 39,899 | 19.4 | % | $ | 40,207 | 19.0 | % | $ | 106,104 | 21.8 | % | $ | 98,138 | 20.4 | % | |||||||||||||||||||||||||||||||
| Carter’s Retail (a) | 38,433 | 14.0 | % | 38,331 | 15.5 | % | 79,687 | 14.6 | % | 82,824 | 16.4 | % | |||||||||||||||||||||||||||||||||||
| Total Carter’s (U.S.) | 78,332 | 16.3 | % | 78,538 | 17.1 | % | 185,791 | 18.0 | % | 180,962 | 18.4 | % | |||||||||||||||||||||||||||||||||||
| OshKosh Retail (a) | (1,481 | ) | (1.9 | )% | (1,815 | ) | (2.5 | )% | (3,266 | ) | (2.0 | )% | (2,775 | ) | (1.9 | )% | |||||||||||||||||||||||||||||||
| OshKosh Wholesale (U.S.) | 1,610 | 17.2 | % | 2,249 | 15.7 | % | 3,816 | 17.9 | % | 5,228 | 17.2 | % | |||||||||||||||||||||||||||||||||||
| Total OshKosh | 129 | 0.1 | % | 434 | 0.5 | % | 550 | 0.3 | % | 2,453 | 1.4 | % | |||||||||||||||||||||||||||||||||||
| International (b) (c) | 9,105 | 12.7 | % | 6,236 | 9.4 | % | 17,546 | 11.7 | % | 12,747 | 9.4 | % | |||||||||||||||||||||||||||||||||||
| Corporate expenses (d) (e) | (24,323 | ) | (23,256 | ) | (47,636 | ) | (49,705 | ) | |||||||||||||||||||||||||||||||||||||||
| Total operating income | $ | 63,243 | 9.9 | % | $ | 61,952 | 10.1 | % | $ | 156,251 | 11.5 | % | $ | 146,457 | 11.3 | % | |||||||||||||||||||||||||||||||
(a) Includes eCommerce results.
(b) Net sales includes international retail, eCommerce, and wholesale
sales. Operating income includes international licensing income.
(c) Includes charges associated with the revaluation of the Company’s
contingent consideration related to the Company’s 2011 acquisition of
Bonnie Togs of approximately $1.4 million and $1.9 million for the
fiscal quarter and two fiscal quarters ended July 4, 2015, respectively.
(d) Corporate expenses include expenses related to incentive
compensation, stock-based compensation, executive management, severance
and relocation, finance, building occupancy, information technology,
legal, consulting, and audit fees.
(e) Includes charges related to the amortization of tradenames of $0.8
million and $1.8 million for the fiscal quarter and two fiscal quarters
ended July 2, 2016, respectively, and $2.1 million and $4.4 million for
the fiscal quarter and two fiscal quarters ended July 4, 2015,
respectively.
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CARTER’S, INC. |
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|
CONDENSED CONSOLIDATED BALANCE SHEETS |
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|
(dollars in thousands, except per share data) |
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|
(unaudited) |
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| July 2, 2016 | January 2, 2016 | July 4, 2015 | |||||||||||||||||
| ASSETS | |||||||||||||||||||
| Current assets: | |||||||||||||||||||
| Cash and cash equivalents | $ | 205,080 | $ | 381,209 | $ | 244,301 | |||||||||||||
| Accounts receivable, net | 150,633 | 207,570 | 157,145 | ||||||||||||||||
| Finished goods inventories | 587,434 | 469,934 | 544,256 | ||||||||||||||||
| Prepaid expenses and other current assets | 46,189 | 37,815 | 47,639 | ||||||||||||||||
| Deferred income taxes | 32,816 | 34,080 | 31,871 | ||||||||||||||||
| Total current assets | 1,022,152 | 1,130,608 | 1,025,212 | ||||||||||||||||
|
Property, plant, and equipment, net of accumulated depreciation of $317,580, $290,636, and $263,580, respectively |
386,034 | 371,704 | 353,138 | ||||||||||||||||
|
Tradenames, net |
309,017 | 310,848 | 312,836 | ||||||||||||||||
| Goodwill | 177,540 | 174,874 | 178,753 | ||||||||||||||||
| Other assets | 17,749 | 15,620 | 13,759 | ||||||||||||||||
| Total assets | $ | 1,912,492 | $ | 2,003,654 | $ | 1,883,698 | |||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
| Current liabilities: | |||||||||||||||||||
| Accounts payable | $ | 190,366 | $ | 157,648 | $ | 145,809 | |||||||||||||
| Other current liabilities | 80,595 | 105,070 | 76,451 | ||||||||||||||||
| Total current liabilities | 270,961 | 262,718 | 222,260 | ||||||||||||||||
| Long-term debt, net | 580,678 | 578,972 | 580,427 | ||||||||||||||||
| Deferred income taxes | 128,682 | 128,838 | 119,230 | ||||||||||||||||
| Other long-term liabilities | 165,469 | 158,075 | 158,842 | ||||||||||||||||
| Total liabilities | 1,145,790 | 1,128,603 | 1,080,759 | ||||||||||||||||
| Commitments and contingencies | |||||||||||||||||||
| Stockholders’ equity: | |||||||||||||||||||
|
Preferred stock; par value $.01 per share; 100,000 shares authorized; none issued or outstanding at July 2, 2016, January 2, 2016, and July 4, 2015 |
— | — | — | ||||||||||||||||
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Common stock, voting; par value $.01 per share; 150,000,000 shares authorized; 50,194,955, 51,764,309, and 52,331,208 shares issued and outstanding at July 2, 2016, January 2, 2016 and July 4, 2015, respectively |
502 | 518 | 523 | ||||||||||||||||
| Additional paid-in capital | — | — | — | ||||||||||||||||
| Accumulated other comprehensive loss | (30,533 | ) | (36,367 | ) | (29,275 | ) | |||||||||||||
| Retained earnings | 796,733 | 910,900 | 831,691 | ||||||||||||||||
| Total stockholders’ equity | 766,702 | 875,051 | 802,939 | ||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,912,492 | $ | 2,003,654 | $ | 1,883,698 | |||||||||||||
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CARTER’S, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(dollars in thousands) |
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(unaudited) |
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| Two Fiscal Quarters Ended | |||||||||||||
| July 2, 2016 | July 4, 2015 | ||||||||||||
| Cash flows from operating activities: | |||||||||||||
| Net income | $ | 90,178 | $ | 85,897 | |||||||||
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Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation and amortization | 34,916 | 30,338 | |||||||||||
| Amortization of tradenames | 1,831 | 4,429 | |||||||||||
| Accretion of contingent consideration | — | 809 | |||||||||||
| Amortization of debt issuance costs | 725 | 678 | |||||||||||
| Non-cash stock-based compensation expense | 9,250 | 9,560 | |||||||||||
| Unrealized foreign currency loss, net | 3,130 | 84 | |||||||||||
| Income tax benefit from stock-based compensation | (3,684 | ) | (6,890 | ) | |||||||||
| Loss on disposal of property, plant, and equipment | 133 | 90 | |||||||||||
| Deferred income taxes | 1,258 | 1,886 | |||||||||||
| Effect of changes in operating assets and liabilities: | |||||||||||||
| Accounts receivable, net | 57,229 | 28,649 | |||||||||||
| Finished goods inventories | (114,817 | ) | (103,379 | ) | |||||||||
| Prepaid expenses and other assets | (12,643 | ) | (14,244 | ) | |||||||||
| Accounts payable and other liabilities | 18,093 | (10,775 | ) | ||||||||||
| Net cash provided by operating activities | 85,599 | 27,132 | |||||||||||
| Cash flows from investing activities: | |||||||||||||
| Capital expenditures | (49,698 | ) | (50,284 | ) | |||||||||
| Proceeds from sale of property, plant, and equipment | 193 | 43 | |||||||||||
| Net cash used in investing activities | (49,505 | ) | (50,241 | ) | |||||||||
| Cash flows from financing activities: | |||||||||||||
| Borrowings under secured revolving credit facility | — | 20,349 | |||||||||||
| Payments on secured revolving credit facility | — | (20,000 | ) | ||||||||||
| Repurchase of common stock | (180,209 | ) | (48,894 | ) | |||||||||
| Dividends paid | (33,679 | ) | (23,143 | ) | |||||||||
| Income tax benefit from stock-based compensation | 3,684 | 6,890 | |||||||||||
| Withholdings from vesting of restricted stock | (8,508 | ) | (12,377 | ) | |||||||||
| Proceeds from exercise of stock options | 5,101 | 4,560 | |||||||||||
| Net cash used in financing activities | (213,611 | ) | (72,615 | ) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,388 | (613 | ) | ||||||||||
| Net decrease in cash and cash equivalents | (176,129 | ) | (96,337 | ) | |||||||||
| Cash and cash equivalents, beginning of period | 381,209 | 340,638 | |||||||||||
| Cash and cash equivalents, end of period | $ | 205,080 | $ | 244,301 | |||||||||
Contacts
Carter’s, Inc.
Sean McHugh, 678-791-7615
Vice President &
Treasurer
