Express 2014 Annual Report Download - page 37

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• In addition to the decrease in cash provided by items included in net income discussed above, there was
$14.4 million of decreases attributable to cash used for working capital during 2014 compared to $2.8
million of cash used in 2013. Working capital is subject to cyclical operating needs, the timing of
receivable collections and payable and expense payments, and the seasonal fluctuations in our
operations. The $11.6 million change primarily relates to additional inventory purchases for our factory
outlet stores and a lesser increase in the straightline rent accrual following the opening of our flagship
store in New York City in 2014. These are offset by changes in accounts payable related primarily to
the timing of merchandise and real estate payments versus 2013.
Net cash provided by operating activities was $195.1 million in 2013 compared to $269.4 million in 2012, a
decrease of $74.3 million. For the 52-week period ended February 1, 2014, the decrease in cash provided by
operations primarily related to the following:
• Items included in net income provided $197.9 million of cash during 2013 compared to $218.8 million
during 2012. The decrease in the current year was primarily driven by the decreased performance of the
business as discussed in “Overview” and “Results of Operations” partially offset by an increase in
share-based compensation expense in the current year.
• In addition to the decrease in cash provided by items included in net income discussed above, there was
$2.8 million of decreases attributable to cash used in working capital during 2013 compared to $50.6
million of cash provided in 2012. Working capital is subject to cyclical operating needs, the timing of
receivable collections and payable and expense payments, and the seasonal fluctuations in our
operations. The $53.4 million change primarily relates to the timing of merchandise and real estate
payments in 2013 versus 2012.
Net Cash Used in Investing Activities
Investing activities consist primarily of capital expenditures for new and remodeled store construction and
fixtures, information technology, and home office and design studio renovations.
Net cash used in investing activities totaled $116.1 million in 2014 compared to $105.5 million in 2013, a $10.6
million increase. The increase was primarily driven by investment in a new retail management system that will
support our continued evolution into an omni-channel brand and our international expansion. This system is
expected to go-live in 2016.
Net cash used in investing activities increased $5.6 million to $105.5 million in 2013 compared to $99.9 million
in 2012. This increase was primarily driven by investments in technology to support our e-commerce growth as
well as new retail management and human resources systems. The remaining increase was attributable to new
store openings and remodels, totaling $76.6 million during 2013 compared to $76.0 million during 2012, gross of
landlord allowances. The amount attributed to store openings included amounts related to the two flagship stores
in New York and San Francisco.
In 2015, we plan to open approximately one new retail store and 35 new factory outlet stores. We expect capital
expenditures for 2015 to be approximately $114.0 million to $119.0 million, primarily driven by remodels of
existing stores, including equipment upgrades, new factory outlet store openings, and continued investments in
multiple IT initiatives, including our new retail management and enterprise planning systems. These capital
expenditures do not include the impact of landlord allowances, which are expected to be approximately $15.0 to
$20.0 million for 2015.
Net Cash Used in Financing Activities
Net cash used in financing activities totaled $4.9 million during 2014 as compared to $33.3 million in 2013, a
decrease of $28.4 million. In 2013, cash used for financing activities was primarily related to the repurchase of
$35.1 million in stock including broker commissions, as part of a stock repurchase program compared to $65.1
million in 2012.
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