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Retailer Saks Incorporated, better known as Saks, today announced results for the second quarter and six months ended August 3, 2013.
Overview of Results for the Second Quarter and Six Months Ended August 3, 2013
For the second quarter ended August 3, 2013, the Company recorded a net loss of $19.6 million, or $.13 per diluted share. The results included after-tax charges totaling $5.2 million comprising $1.1 million of store closing costs, a $1.6 million non-cash pension settlement charge related to the payment of excess lump-sum distributions, and $2.5 million of expenses related to the pending merger with HBC. Excluding these items, the Company would have recorded a net loss of $14.4 million, or $.10 per share, for the second quarter ended August 3, 2013.
For the prior year second quarter ended July 28, 2012, the Company recorded a net loss of $12.3 million, or $.08 per diluted share. The results included after-tax charges totaling $4.3 million comprising $1.5 million of pre-opening costs associated with the Company’s new Tennessee fulfillment center and $2.8 million of asset impairments and store closing costs. Excluding these items, the Company would have recorded a net loss of $8.0 million, or $.05 per share, for the second quarter ended July 28, 2012.
For the six months ended August 3, 2013, the Company recorded net income of $0.4 million, or $.00 per diluted share. The results included after-tax charges totaling $15.3 million comprising $3.4 million of store closing costs, a $7.8 million non-cash loss on extinguishment of debt related to the Company’s redemption of its $230 million 2% Convertible Senior Notes, a non-cash $1.6 million pension settlement charge, and $2.5 million of expenses related to the pending merger with HBC. Excluding these items, the Company would have recorded net income of $15.7 million, or $.11 per share, for the six months ended August 3, 2013.
For the prior year six months ended July 28, 2012, the Company recorded net income of $19.8 million, or $.13 per diluted share. The results included after-tax charges totaling $4.8 million comprising $1.8 million of pre-opening costs associated with the Company’s new Tennessee fulfillment center and $3.0 million of asset impairments and store closing costs. Excluding these items, the Company would have recorded net income of $24.6 million, or $.16 per share, for the six months ended July 28, 2012.
On July 29, 2013 Hudson’s Bay Company (TSX: HBC) (“HBC”) and Saks jointly announced that they entered into a definitive merger agreement whereby HBC will acquire Saks for $16.00 per share in an all-cash transaction valued at approximately $2.9 billion, including debt. The transaction has been approved by each company’s board of directors and is expected to close before the end of the calendar year, subject to approval by Saks’ shareholders, regulatory approvals, and other customary closing conditions.
There is a 40-day “go-shop” period under the terms of the agreement, during which Saks may solicit alternative proposals from third parties. Saks does not anticipate that it will disclose any developments with regard to this process unless and until Saks’ board of directors makes a decision with respect to a potential superior proposal. There can be no assurance that this process will result in a superior proposal. The agreement also includes customary breakup fees payable to HBC in connection with the termination of the agreement in certain circumstances.
Due to the pending transaction, the Company will not hold its regularly scheduled conference call for the investment community and has discontinued providing forward-looking guidance.
