Restoration Hardware 2012 Annual Report Download - page 112

Basis of Presentation and Results of Operations
On November 7, 2012, Restoration Hardware Holdings, Inc. completed an initial public offering and
acquired all of the outstanding shares of capital stock of Restoration Hardware, Inc. In connection with the initial
public offering, common stock of Restoration Hardware Holdings, Inc. was issued in replacement of prior unit
awards under the Team Resto Ownership Plan. These transactions are referred to as the “Reorganization.” Prior
to the Reorganization, Restoration Hardware Holdings, Inc. had not engaged in any business or other activities
except in connection with its formation and the Reorganization. Accordingly, all financial and other information
herein relating to periods prior to the completion of the Reorganization is that of Restoration Hardware, Inc.
The following table sets forth our statement of operations and other financial and operating data.
Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
(dollars in thousands, excluding per square foot store data)
Statement of Operations Data:
Net revenues $1,193,046 $958,084 $772,752
Cost of goods sold 756,597 601,735 501,132
Gross profit 436,449 356,349 271,620
Selling, general and administrative expenses 505,485 329,506 274,836
Income (loss) from operations (69,036) 26,843 (3,216)
Interest expense (5,776) (5,134) (3,150)
Income (loss) before income taxes (74,812) 21,709 (6,366)
Income tax expense (benefit) (62,023) 1,121 685
Net income (loss) $ (12,789) $ 20,588 $ (7,051)
Other Financial and Operating Data:
Growth in net revenues:
Stores (1) 20% 22% 15%
Direct 30% 27% 37%
Total 25% 24% 24%
Retail (2):
Comparable store sales change (3) 28% 25% 19%
Retail stores open at beginning of period 74 91 95
Stores opened 5 5 4
Stores closed 8 22 8
Retail stores open at end of period 71 74 91
Total leased square footage at end of period (in
thousands) 768 808 970
Total leased selling square footage at end of period (in
thousands) (4) 501 516 613
Retail sales per leased selling square foot (5) $ 1,143 $ 846 $ 635
Direct:
Catalogs circulated (in thousands) (6) 32,712 26,052 46,507
Catalog pages circulated (in millions) (6) 16,029 8,848 6,260
Direct as a percentage of net revenues (7) 46% 44% 43%
Capital expenditures $ 49,058 $ 25,593 $ 39,907
Adjusted net income (8) $ 37,739 $ 26,451 $ 3,025
(1) Stores data represents retail stores plus outlet stores. Net revenues for outlet stores for fiscal 2012, fiscal
2011 and fiscal 2010 were $54.3 million, $43.9 million and $31.2 million, respectively.
(2) Retail data has been calculated based upon retail stores, which includes our Baby & Child stores, and
exclude outlet stores.
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