Coldwater Creek Inc. (CWTR, Financial) filed Annual Report for the period ended 2012-01-28.
Coldwater Creek has a market cap of $127.7 million; its shares were traded at around $1.22 with and P/S ratio of 0.1.
The $137.2 million decrease in retail segment net sales for fiscal 2011 as compared to fiscal 2010 is primarily due to a decrease in comparable premium retail store sales of 22.5 percent, reflecting a 15.3 percent decline in comparable traffic, a 7.5 percent decline in units per transaction, and a 7.1 percent decline in comparable conversion, while our comparable average unit retail increased 5.1 percent. Offsetting the decrease in comparable premium retail store sales is $10.7 million of the retail segement's portion of the cumulative one-time adjustment for gift card breakage income. Retail segment net sales were also negatively impacted by a decrease of $6.8 million in net sales from outlet stores during fiscal 2011 as compared to the fiscal 2010.
The $70.8 million decrease in direct segment net sales during fiscal 2011 as compared to fiscal 2010 is primarily the result of a decrease in order volume of 29.3 percent while our average unit retail increased 6.5 percent. Contributing to the decrease in order volume is a shift in clearance sales from our direct segment to our retail segment with the introduction of our full-time sale section in our premium retail stores. Offsetting the decrease in direct segment net sales is $1.1 million of the direct segment's portion of the cumulative one-time adjustment for gift card breakage income. Direct segment net sales were also negatively impacted by a decrease of $6.8 million in shipping revenue during fiscal 2011 as compared to fiscal 2010.
Net cash used in operating activities was $44.2 million and $1.0 million during fiscal 2011 and 2010, respectively, compared to net cash provided by operating activities of $24.6 million during fiscal 2009. The $43.2 million decrease in cash flows from operating activities during fiscal 2011 as compared with fiscal 2010 resulted primarily from the increased net loss offset by changes in our operating assets and liabilities. The $25.6 million decrease in cash flows from operating activities during fiscal 2010 as compared with fiscal 2009 resulted primarily from decreased net sales and gross margins as well as a decrease in tax refunds received of $8.5 million. We also experienced decreases of $6.3 million and $3.2 million in cash collected on tenant allowances and fees collected from the co-branded credit card program, respectively. These decreases were offset by lower operating expenses.
(a)We have a significant operating lease for our 960,000 square foot distribution center located in Mineral Wells, West Virginia, with a remaining lease commitment as of January 28, 2012 of $57.5 million. All other operating leases primarily pertain to retail and outlet stores, day spas and various equipment. Certain store leases have provisions to adjust the payment based on certain criteria, for example additional rent for our store sales above a specified minimum or less rent based on landlord vacancy rates below a specified minimum. The operating lease obligations noted above do not include any of these adjustments or payments made for maintenance, insurance and real estate taxes. Several lease agreements provide renewal options or allow for termination rights under certain circumstances. Future operating lease obligations would change if these renewal options or termination rights were exercised. (b)Contractual commitments include commitments to purchase inventory of $94.5 million and capital expenditures of $1.9 million. The timing of the payments is subject to change based upon actual receipt of the inventory or capital asset and the terms of payment with the vendor. (c)Our Credit Agreement matures on May 16, 2016, however, the $15.0 million outstanding on our revolving line of credit as of January 28, 2012 is considered to be a current obligation as terms generally less than 90 days are used to lock in preferred interest rates. Interest payments on our term loan and revolving line of credit were estimated using the effective interest rate as of January 28, 2012 and assuming interest payments on $15.0 million outstanding on our revolving line of credit for the next 12 months. (d)The primary capital lease is for our 69,000 square foot facility located in Coeur d'Alene, Idaho, which functions as a customer contact center, IT data center, and office space. This lease was amended on April 22, 2009 resulting in the lease classified as a capital lease through July 2028, with a remaining capital lease commitment as of January 28, 2012 of $18.9 million, and as an operating lease from August 2028 through July 2038, with a remaining operating lease commitment as of January 29, 2012 of $16.1 million. All other capital leases pertain to various technology equipment and other real estate. The capital lease obligations represent the minimum payments including principal and interest, and excluding maintenance, insurance and real estate taxes.
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Coldwater Creek has a market cap of $127.7 million; its shares were traded at around $1.22 with and P/S ratio of 0.1.
Highlight of Business Operations:
Net sales decreased to $773.0 million for fiscal 2011 compared to $981.1 million for fiscal 2010. This 21.2 percent decrease in net sales was primarily driven by a 22.5 percent decrease in comparable premium retail store sales(1) in our retail segment and a decrease of 28.9 percent in our direct segment net sales, offset by $11.8 million of a cumulative one-time adjustment reflecting a change in our estimate of gift card breakage.The $137.2 million decrease in retail segment net sales for fiscal 2011 as compared to fiscal 2010 is primarily due to a decrease in comparable premium retail store sales of 22.5 percent, reflecting a 15.3 percent decline in comparable traffic, a 7.5 percent decline in units per transaction, and a 7.1 percent decline in comparable conversion, while our comparable average unit retail increased 5.1 percent. Offsetting the decrease in comparable premium retail store sales is $10.7 million of the retail segement's portion of the cumulative one-time adjustment for gift card breakage income. Retail segment net sales were also negatively impacted by a decrease of $6.8 million in net sales from outlet stores during fiscal 2011 as compared to the fiscal 2010.
The $70.8 million decrease in direct segment net sales during fiscal 2011 as compared to fiscal 2010 is primarily the result of a decrease in order volume of 29.3 percent while our average unit retail increased 6.5 percent. Contributing to the decrease in order volume is a shift in clearance sales from our direct segment to our retail segment with the introduction of our full-time sale section in our premium retail stores. Offsetting the decrease in direct segment net sales is $1.1 million of the direct segment's portion of the cumulative one-time adjustment for gift card breakage income. Direct segment net sales were also negatively impacted by a decrease of $6.8 million in shipping revenue during fiscal 2011 as compared to fiscal 2010.
Net cash used in operating activities was $44.2 million and $1.0 million during fiscal 2011 and 2010, respectively, compared to net cash provided by operating activities of $24.6 million during fiscal 2009. The $43.2 million decrease in cash flows from operating activities during fiscal 2011 as compared with fiscal 2010 resulted primarily from the increased net loss offset by changes in our operating assets and liabilities. The $25.6 million decrease in cash flows from operating activities during fiscal 2010 as compared with fiscal 2009 resulted primarily from decreased net sales and gross margins as well as a decrease in tax refunds received of $8.5 million. We also experienced decreases of $6.3 million and $3.2 million in cash collected on tenant allowances and fees collected from the co-branded credit card program, respectively. These decreases were offset by lower operating expenses.
(a)We have a significant operating lease for our 960,000 square foot distribution center located in Mineral Wells, West Virginia, with a remaining lease commitment as of January 28, 2012 of $57.5 million. All other operating leases primarily pertain to retail and outlet stores, day spas and various equipment. Certain store leases have provisions to adjust the payment based on certain criteria, for example additional rent for our store sales above a specified minimum or less rent based on landlord vacancy rates below a specified minimum. The operating lease obligations noted above do not include any of these adjustments or payments made for maintenance, insurance and real estate taxes. Several lease agreements provide renewal options or allow for termination rights under certain circumstances. Future operating lease obligations would change if these renewal options or termination rights were exercised. (b)Contractual commitments include commitments to purchase inventory of $94.5 million and capital expenditures of $1.9 million. The timing of the payments is subject to change based upon actual receipt of the inventory or capital asset and the terms of payment with the vendor. (c)Our Credit Agreement matures on May 16, 2016, however, the $15.0 million outstanding on our revolving line of credit as of January 28, 2012 is considered to be a current obligation as terms generally less than 90 days are used to lock in preferred interest rates. Interest payments on our term loan and revolving line of credit were estimated using the effective interest rate as of January 28, 2012 and assuming interest payments on $15.0 million outstanding on our revolving line of credit for the next 12 months. (d)The primary capital lease is for our 69,000 square foot facility located in Coeur d'Alene, Idaho, which functions as a customer contact center, IT data center, and office space. This lease was amended on April 22, 2009 resulting in the lease classified as a capital lease through July 2028, with a remaining capital lease commitment as of January 28, 2012 of $18.9 million, and as an operating lease from August 2028 through July 2038, with a remaining operating lease commitment as of January 29, 2012 of $16.1 million. All other capital leases pertain to various technology equipment and other real estate. The capital lease obligations represent the minimum payments including principal and interest, and excluding maintenance, insurance and real estate taxes.
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