American Eagle Outfitters 2013 Annual Report Download - page 22

Table of Contents
Operating income for the first quarter was $8.4 million compared to $45.8 million, which includes $11.5 million of asset write-offs and
corporate charges, last year. Net income this year was $3.9 million, or $0.02 per diluted share. This compares to net income of $28.0 million, or
$0.14 per diluted shared, last year. On an adjusted basis, net income last year was $0.18 per diluted share, which excludes a ($0.04) per diluted
share impact from asset write-offs and corporate charges.
The preceding paragraph contains non-GAAP financial measures (“non-GAAP” or “adjusted”), comprised of earnings per share information
excluding non-GAAP items. This financial measure is not based on any standardized methodology prescribed by U.S. GAAP and is not
necessarily comparable to similar measures presented by other companies. We believe that this non-GAAP information is useful as an additional
means for investors to evaluate our operating performance, when reviewed in conjunction with our GAAP financial statements. These amounts
are not determined in accordance with GAAP and therefore, should not be used exclusively in evaluating our business and operations. The table
below reconciles the GAAP financial measure to the non-GAAP financial measure discussed above.
We had $327.7 million in cash and cash equivalents as of May 3, 2014. Merchandise inventory at the end of the first quarter was $329.2 million,
compared to $340.5 million last year, a decrease of 7% on a cost per foot basis. Inventories reflect a change to ownership terms completed late
last year, as we began taking ownership of inventory at the receiving port rather than the port of departure. Excluding the change in terms,
inventory at cost per foot increased in the mid single-digits.
Our business is affected by the pattern of seasonality common to most retail apparel businesses. The results for the current and prior periods are
not necessarily indicative of future financial results.
The following table shows the percentage relationship to total net revenue of the listed line items included in our Consolidated Statements of
Operations.
21
13 Weeks
Ended
May 4,
2013
Net income per diluted share
—GAAP Basis
$
0.14
Add back: Asset write
-
offs and corporate charges
(1)
0.04
Net income per diluted share
—
Non
-
GAAP Basis
$
0.18
(1) Adjustment consists of $10.1 million of pre-tax corporate and store asset write-offs and $1.4 million of pre-tax severance and related
employee costs.
13 Weeks Ended
May 3,
2014
May 4,
2013
Total net revenue
100.0
%
100.0
%
Cost of sales, including certain buying, occupancy and warehousing expenses
65.1
61.2
Gross profit
34.9
38.8
Selling, general and administrative expenses
28.6
26.8
Depreciation and amortization expense
5.0
5.3
Operating income
1.3
6.7
Other income (expense), net
0.1
(0.1
)
Income before income taxes
1.4
6.6
Provision for income taxes
0.8
2.5
Net income
0.6
%
4.1
%