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Zale Corp. (ZLC) filed Quarterly Report for the period ended 2011-10-31.
Zale Corp. has a market cap of $125.5 million; its shares were traded at around $3.9 with and P/S ratio of 0.1.
This is the annual revenues and earnings per share of ZLC over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of ZLC.
Highlight of Business Operations:
Borrowing availability cannot be less than $40 million during the term of the agreement and less than $50 million on one occasion for three consecutive business days in each four month period, except for the period from September 1 through November 30, when borrowing availability can be less than $50 million on two occasions, but in no event can borrowing availability be less than $50 million more than four times during any 12 consecutive months. Borrowing availability, excluding the $50 million minimum availability requirement, was approximately $157 million as of October 31, 2011. The Revolving Credit Agreement contains various other covenants including restrictions on the incurrence of certain indebtedness, liens, investments, acquisitions and asset sales. As of October 31, 2011, we were in compliance with all covenants under the Revolving Credit Agreement.The Term Loan contains various covenants, as defined in the agreement, including maintaining minimum store contribution thresholds for Piercing Pagoda and Zale Canada, as defined, and restrictions on the incurrence of certain indebtedness, liens, investments, acquisitions and asset sales. The Piercing Pagoda and Zale Canada minimum store contribution threshold for the twelve-month period ended October 31, 2011 is $21 million and CAD $31 million, respectively. As of October 31, 2011, store contribution for Piercing Pagoda and Zale Canada would have to decline by more than 35 percent and 32 percent, respectively, to breach these covenants. The Piercing Pagoda minimum store contribution thresholds for the remainder of fiscal year 2012 range from $22 million to $26 million. The Zale Canada minimum store contribution thresholds for the remainder of fiscal year 2012 range from CAD $33 million to CAD $36 million. Liquidity (as defined in the Term Loan) was $297.5 million as of October 31, 2011, which exceeded the $135 million minimum liquidity requirement under the Term Loan by $162.5 million. As of October 31, 2011, we were in compliance with all covenants under the Term Loan.
Selling, General and Administrative. Included in selling, general and administrative expenses (“SG&A”) are store operating, advertising, buying, cost of insurance operations and general corporate overhead expenses. SG&A was 56.9 percent of revenues for the quarter ended October 31, 2011, compared to 59.7 percent for the same period in the prior year. The 280 basis point improvement was primarily the result of greater operating leverage. SG&A increased by $4.6 million to $199.8 million for the quarter ended October 31, 2011. The increase is primarily the result of a $4.4 million increase in labor costs to support increased sales and a $1.5 million increase in promotional costs. The increase was partially offset by a $1.4 million decrease in occupancy costs primarily related to 70 stores closed (net of store openings) since October 31, 2010.
Borrowing availability cannot be less than $40 million during the term of the agreement and less than $50 million on one occasion for three consecutive business days in each four-month period, except for the period from September 1 through November 30, when borrowing availability can be less than $50 million on two occasions, but in no event can borrowing availability be less than $50 million more than four times during any 12 consecutive months. Borrowing availability, excluding the $50 million minimum availability requirement, was approximately $157 million as of October 31, 2011. The Revolving Credit Agreement contains various other covenants including restrictions on the incurrence of certain indebtedness, liens, investments, acquisitions and asset sales. As of October 31, 2011, we were in compliance with all covenants under the Revolving Credit Agreement.
The Term Loan contains various covenants, as defined in the agreement, including maintaining minimum store contribution thresholds for Piercing Pagoda and Zale Canada, as defined, and restrictions on the incurrence of certain indebtedness, liens, investments, acquisitions and asset sales. The Piercing Pagoda and Zale Canada minimum store contribution threshold for the twelve-month period ended October 31, 2011 is $21 million and CAD $31 million, respectively. As of October 31, 2011, store contribution for Piercing Pagoda and Zale Canada would have to decline by more than 35 percent and 32 percent, respectively, to breach these covenants. The Piercing Pagoda minimum store contribution thresholds for the remainder of fiscal year 2012 range from $22 million to $26 million. The Zale Canada minimum store contribution thresholds for the remainder of fiscal year 2012 range from CAD $33 million to CAD $36 million. Liquidity (as defined in the Term Loan) was $297.5 million as of October 31, 2011, which exceeded the $135 million minimum liquidity requirement under the Term Loan by $162.5 million. As of October 31, 2011, we were in compliance with all covenants under the Term Loan.
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