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VRA - Vera Bradley Inc News Story

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Sector
Consumer Cyclicals
Size
Small Cap
Market Cap £266.8m
Enterprise Value £241.1m
Revenue £336.8m
Position in Universe 3903rd / 6849

Vera Bradley Announces Fourth Quarter and Fiscal Year 2021 Results

Wed 10th March, 2021 1:00pm
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For the fiscal year, Vera Bradley, Inc. net income totaled $8.7 million, or
$0.26 per diluted share;
excluding certain items, Vera Bradley, Inc. non-GAAP net income totaled $21.4
million, or $0.63 per diluted share

E-commerce sales comprised nearly half of total Company revenues for the
fiscal year; Vera Bradley brand e-commerce sales grew nearly 50% over prior
year

Balance sheet remains strong, with cash, cash equivalents, and investments of
$65.5 million and no debt

Management provides guidance for fiscal year ending January 29, 2022; total
revenues expected to grow 17% to 23% over Fiscal 2021 and 11% to 16% over
Fiscal 2020

FORT WAYNE, Ind., March 10, 2021 (GLOBE NEWSWIRE) -- Vera Bradley, Inc.
(Nasdaq: VRA) (“Vera Bradley” or the “Company”) today announced its
financial results for the fourth quarter and fiscal year ended January 30,
2021 (“Fiscal 2021”).

Rob Wallstrom, Chief Executive Officer of the Company, noted, “I am proud of
how our organization navigated through the last year. Our extraordinary
culture has allowed us to not only persevere through the crisis, but it has
made us stronger. In spite of an extremely challenging overall retail
environment and a very difficult handbag and accessories market in particular,
we delivered some best-in-class operating results. On a non-GAAP basis,
excluding certain items, our fiscal year operating income was nearly 90% to
last year, which was a strong performance in light of the unprecedented
pandemic-related headwinds. These results were due to the strength of our two
lifestyle brands and strong execution.

“Despite significant sales disruption, we had several financial successes
during the year. E-commerce sales comprised nearly half of total Company
revenues for the fiscal year; Vera Bradley brand e-commerce sales grew nearly
50% over the prior year. ”

“For the year, we expanded our consolidated gross margin rate primarily
through product innovation (cotton masks and product collaborations) and more
full-priced selling,” Wallstrom added. “We diligently managed our
expenses, and we ended the fiscal year with a solid balance sheet with ample
cash and no debt. We are in a strong position to drive growth by continuing to
invest in our two brands and to take advantage of additional acquisition
opportunities over time.”

Pura Vida Acquisition and Accounting

In the Company’s prior year second fiscal quarter (on July 16, 2019), Vera
Bradley acquired a 75% interest in Creative Genius, Inc., which also operates
under the name Pura Vida Bracelets (“Pura Vida”). Financial results for
Pura Vida have been consolidated beginning July 17, 2019, the first full day
following the acquisition. The fourth quarters are comparable (with full
quarters of Pura Vida performance); however, prior fiscal year numbers do not
include Pura Vida results before the acquisition. Any reference to the results
of “Vera Bradley” in this release is to results of the stand-alone Vera
Bradley business (comprised of the Vera Bradley Direct and Indirect segments)
and excludes Pura Vida. Any reference to the results of “Vera Bradley,
Inc.” is to the combined results of Vera Bradley and Pura Vida.

Summary of Financial Performance for the Fourth Quarter

Consolidated net revenues totaled $142.4 million for the current year fourth
quarter compared to $156.9 million in the prior year fourth quarter.

For the current year fourth quarter, Vera Bradley, Inc. consolidated net
income totaled $7.9 million, or $0.23 per diluted share. These results
included $2.6 million of net after tax charges, comprised of $1.8 million of
store impairment charges and $0.8 million of Pura Vida intangible asset
amortization. On a non-GAAP basis, excluding these charges, Vera Bradley,
Inc.’s consolidated net income for the current fourth quarter totaled $10.5
million, or $0.31 per diluted share.

For the prior year fourth quarter, Vera Bradley, Inc. consolidated net income
totaled $12.5 million, or $0.37 per diluted share. These results included $1.8
million of net after tax charges comprised of incremental stock compensation
and Pura Vida transaction bonuses of $1.5 million and $1.1 million of expenses
related to the re-platforming of Vera Bradley’s information technology
systems (“Project Novus”), partially offset by a net benefit of $0.8
million related to purchase accounting adjustments for the Pura Vida
acquisition (including an adjustment to reduce the earn-out liability,
intangible asset amortization, and inventory step-up amortization). On a
non-GAAP basis, excluding these net charges, Vera Bradley, Inc. consolidated
fourth quarter net income totaled $14.3 million, or $0.42 per diluted share.

Summary of Financial Performance for the Fiscal Year

Consolidated net revenues totaled $468.3 million for Fiscal 2021 (which
included $112.5 million of net revenues from Pura Vida), compared to $495.2
million for Fiscal 2020 (which included $65.9 million of net revenues from
Pura Vida, which represented a partial period from the date of acquisition).
Excluding Pura Vida, Vera Bradley net revenues totaled $355.8 million compared
to $429.3 million in the prior year. Revenues were adversely impacted by the
COVID-19 pandemic (“COVID-19” or the “pandemic”).

For the current fiscal year, Vera Bradley, Inc.’s consolidated net income
totaled $8.7 million, or $0.26 per diluted share. These results included $12.7
million of net after tax charges, comprised of $4.8 million of intangible
asset amortization, $4.5 million of store impairment charges, $2.1 million of
Project Novus expenses, $0.9 million of charges related to the cancellation of
certain purchase orders resulting from COVID-19, a $0.2 million adjustment to
the Pura Vida earn-out liability, and $0.2 million in certain department store
exit costs resulting from COVID-19. On a non-GAAP basis, excluding these
charges, Vera Bradley, Inc.’s consolidated net income for the current fiscal
year totaled $21.4 million, or $0.63 per diluted share. This non-GAAP
performance included $0.23 of diluted earnings per share attributable to Pura
Vida.

For Fiscal 2020, Vera Bradley, Inc. consolidated net income totaled $16.0
million, or $0.47 per diluted share. These results included $12.1 million of
net after tax charges comprised of $8.2 million related to the purchase
accounting adjustments for the Pura Vida acquisition (including inventory
step-up amortization, intangible asset amortization, transaction costs, and an
adjustment to reduce the earn-out liability), $2.4 million of expenses related
to Project Novus, and $1.5 million of incremental stock compensation and Pura
Vida transaction bonuses. On a non-GAAP basis, excluding these net charges,
Vera Bradley, Inc. consolidated net income for Fiscal 2020 totaled $28.2
million, or $0.82 per diluted share. This performance included $0.16
attributable to Pura Vida for the partial year.

Key Accomplishments for Fiscal 2021

Wallstrom noted, “In Fiscal 2021, we concluded the final year of Vision
20/20 – our aggressive three-year plan to restore the Vera Bradley brand and
business to a healthy foundation, and we completed the first full year of
consolidated operations of Pura Vida. Despite the pandemic challenges, we
strengthened our infrastructure and better positioned both the Pura Vida and
Vera Bradley brands for the future. Some of our major achievements for the
year included:

For Pura Vida:
* Pura Vida’s e-commerce revenues increased nearly 15% for the fiscal year,
despite the pandemic and significant supply chain disruptions during the
lockdown. Average order values and conversion rates continued to grow
year-over-year.
* Fiscal 2021 was focused on building a strong foundation of growth for Pura
Vida. * Using Vera Bradley’s global sourcing expertise, we significantly
strengthened Pura Vida’s supply chain, diversifying raw material sourcing,
and adding three additional production facilities in countries outside of El
Salvador.
* We re-examined promotional activity and eliminated deep discounting,
particularly around Black Friday, which led to gross margin rate improvement.
* We laid the groundwork for growth initiatives beyond jewelry to further
expand Pura Vida’s lifestyle brand reach.
 
* In the Product area: * Pura Vida continued to show strength as a lifestyle
brand by successfully expanding into new product categories. Nearly 50% of our
e-commerce business is now comprised of jewelry categories other than
traditional string bracelets, such as metal, semi-precious stones, charms, and
the engravable collection, underscoring the brand’s lifestyle appeal. This
lifestyle appeal will continue to be a key driver of growth.
* Charity bracelets continue to be an important element of the Pura Vida
lifestyle and an important draw for our cause-minded customers. To date, Pura
Vida has donated over $3.0 million to more than 200 charities.
 
* On the Distribution front: * Pura Vida expanded on the distribution front by
launching fulfillment capabilities in Canada and entering into a third-party
agreement for the wholesale distribution of our products in Europe to
complement our existing e-commerce business and third-party operations there.
* We added Pura Vida shop-in-shops to six full-line Vera Bradley stores and
expanded our presence in wholesale partners with larger in-store
presentations.
 
* In the Marketing area: * Pura Vida’s social media engagement is
exceptional, remaining one of the most highly-engaged brands in the
accessories space on social media, with over 2.0 million Instagram followers.
TikTok has also taken off with well over 200,000 followers, and a team of
Brand Ambassadors and close to 150,000 micro influencers are an active part of
the brand and a key part of our marketing strategy.
* We entered into an agreement with the “reigning queen of TikTok,” Charli
D’Amelio, for our collaborative Pura Vida bracelet style pack which launched
on March 5, 2021. Charli’s astounding 150 million plus social media
followers and her target demographic fits perfectly with the Pura Vida brand.
* Pura Vida continued to rank at the top of the industry for our net promoter
and customer satisfaction scores.
* Earned media was strong with healthy returns on spend, and we doubled our
SMS list from Fiscal 2020 to well over one million active subscribers, which
drove meaningful revenue.
For Vera Bradley:
* In the Product area: * We accelerated our robust fabric innovation pipeline
to develop new fabric offerings and build on our platform of sustainable
fabrics. We expanded our full-line Performance Twill and recycled Re-Active
collections, introduced our Ultralight fabrication in our Factory stores, and
developed our recycled cotton collection that will launch in spring 2021.
* We quickly reacted to the consumer demand for personal protective equipment,
producing and selling millions of cotton face masks, generating meaningful
revenue and gross margin dollars for the fiscal year.
* We continued another year of collaborations with several iconic brands,
including Crocs, Disney, and Gillette Venus to create and sell limited-edition
product collections; introduced our signature masks and 1982 backpacks in
Target stores and on target.com; and launched our collaboration with Warner
Bros. Consumer Products for the creation of our Harry Potter™ + Vera Bradley
collection.
 
* On the Distribution front: * We continued to strengthen and rationalize our
store base. We opened six new factory stores and closed 13 underperforming
full-line stores, ending the fiscal year with 75 full-line and 69 factory
locations.
* We expanded and strengthened our partnerships with key online retailers such
as Amazon.
 
* In the Marketing area: * Our loyal customer retention improved
year-over-year which was a testament to our customers’ loyalty and our
enhanced digital and data analytics programs.
* Our customer service model and voice of the customer program continued to
drive industry-leading customer satisfaction scores, despite pandemic-related
disruptions.
* We successfully launched our new verabradley.com site which allowed us to
improve our customer’s online buying experience and offer enhanced content
to guide purchasing. We added a number of key site capabilities to support
customers who shifted to online purchasing during the pandemic.
* Our well-timed investments in customer data science and business analytics
positioned us well as we navigated through the pandemic, allowing us to
collect and analyze data and respond to customer changes and adjust marketing
spend in an agile way.
* Our targeted digital media efforts drove increased brand awareness and
improved earned media, with total media impressions up more than 170% to
almost 10 billion for the year.
 
* We reinforced our commitment to be an ESG-driven organization. * We
continued to strengthen our community support and charitable efforts under the
umbrella of VB Cares, particularly through organizations that can profoundly
improve the lives of women and children, including raising and donating $1.4
million to the Vera Bradley Foundation Center for Breast Cancer Research; over
$630,000 to the Coronavirus Response Fund for Nurses; and donations to New
Hope Girls, Blessings in a Backpack, and several other causes.
* Another aspect of our VB Cares focus is caring for our Associates, and we
were able to pay over $800,000 in bonuses to those serving on the front lines
during the pandemic.
* We launched our Company-wide diversity and inclusion initiative, Project
Quilt, to continue to enhance diversity, equality, and inclusion, focusing on
three key areas – the Associate Experience, the Customer Experience, and the
Community Experience.
In the Information Technology area:
* We completed Project Novus, our information technology platform conversion,
migrating our e-commerce site to a best-in-class, cloud-based solution and
replacing our existing ERP, POS, Business Intelligence, and Order Management
systems with cloud-based Microsoft D365. This conversion not only lessened the
complexity of our IT systems but has provided us with a more efficient
technology platform enabling our entire enterprise to make quick, data-based,
informed decisions; further enhance our customer experience; and achieve our
long-term growth objectives.”
Organizational Structure Changes to Drive Growth

Wallstrom noted, “Today, we are also announcing changes to the leadership
structure of our Company and the Vera Bradley brand to position us for an
exciting future.

“As we conclude Vision 20/20, we are embarking on the next important phase
of our Company’s growth by enhancing our multi-brand portfolio, further
expanding our ESG initiatives, and driving additional value for all of our
stakeholders. In order to strengthen our position and strategic vision as a
purpose-driven, multi-brand, high-growth company, we are realigning our
organizational and leadership structure.

“Vera Bradley and Pura Vida are the two lifestyle brands currently under our
Vera Bradley, Inc. umbrella. We not only intend to nurture and grow both of
those brands, but we will also look for other lifestyle brands that could
strengthen our capabilities and diversify our revenue streams. While I will
continue as CEO of Vera Bradley, Inc., each brand will have their own
leadership team that will focus on building customer engagement and expanding
revenue, while protecting and cultivating the distinct ethos and
entrepreneurial spirit of each unique brand.”

Wallstrom continued, “With the retail industry continuing its rapid
transformation into a customer-centric, data-driven, technology-enabled, and
digitally-driven industry, Vera Bradley will double down on these focus areas.
Serving as Vera Bradley’s Chief Customer Officer for the past two and a half
years, Daren Hull and his team have already radically strengthened the way we
engage with our customers. Now, Daren Hull has been appointed as the Vera
Bradley Brand President and will continue to lead our digital-first
transformation. In his new role, Daren is being supported by a new streamlined
leadership structure focused on three critical areas: what we bring to market,
how to sell the market, and how we raise customer engagement and interest in
the brand.”

“On a corporate level, we will offer consolidated back-office support and an
efficient and lean corporate platform to enhance the growth of each brand,”
Wallstrom added. “We will continue our technology and customer insights
evolution to build an integrated ecosystem of capabilities on an enterprise
level that will allow our brands to respond more quickly to our customers’
wants and needs.

“These changes will better prepare us to adapt to the ever-changing retail
landscape, allow us to better react to customer needs, strengthen our
positioning, and propel us toward more profitable growth. I am so proud of all
that the teams have accomplished over the past year. I am confident that we
have an exciting future ahead as we are poised to take advantage of additional
acquisition opportunities and to evolve into an even more modern and relevant
multi-brand retailer.”

Looking Ahead

Wallstrom commented, “Our enterprise’s forward-looking strategy is to be a
purpose-driven, multi-lifestyle brand, high-growth company, and we are just
beginning the journey. Our strong cash position, debt-free balance sheet, and
ability to generate free cash flow will allow us to seek out appropriate
acquisitions of other comfortable, affordable, purpose-driven,
digitally-native brands, similar to our successful Pura Vida acquisition, over
time. We will also expand our reach by adding adjacent product categories and
geographies.

“For Fiscal 2022, the Company’s four key growth drivers are:
1. Driving our digital-first strategy, by evolving the digital distribution of
our products and further refining and utilizing digital experiences to serve
our customers. This will be supported by continuously refining our technology,
developing business process and technology platforms to improve agility,
data-based decision making, customer centricity, and speed-to-market.
2. Enhancing our product innovation pipeline, collaborations, and category
extensions to attract new customers and increase share of wallet with existing
customers.
3. Building our community, through marketing and by creating an impactful,
positive brand movement that not only changes lives but deepens her brand
loyalty.
4. Evolving our distribution channels, by focusing on future growth
opportunities and addressing the drastically changing retail environment and
the consumer marketplace.”
Wallstrom concluded, “We have a long-term vision for the future of our
Company and a clear path to achieve our goals. Our team is focused, our
balance sheet is solid, our brands are strong, and we are positioned for
growth. We are excited about the possibilities for Vera Bradley, Inc.”

Non-GAAP Numbers

The current year non-GAAP fourth quarter income statement numbers referenced
below exclude the previously outlined store impairment charges and intangible
asset amortization. The current year non-GAAP income statement numbers for the
fiscal year referenced below exclude the previously outlined intangible asset
amortization, store impairment charges, Project Novus expenses, charges
related to the cancellation of certain purchase orders resulting from
COVID-19, an adjustment to the Pura Vida earn-out liability, and certain
department store exit costs resulting from COVID-19. The prior year non-GAAP
income statement numbers for the fourth quarter and fiscal year referenced
below exclude the previously outlined Pura Vida acquisition-related charges
and Project Novus expenses.

Fourth Quarter Details

Current year fourth quarter Vera Bradley Direct segment revenues totaled $93.0
million, a 10.2% decrease from $103.6 million in the prior year fourth
quarter. Comparable sales decreased 10.6% for the quarter (reflecting a 27.4%
decrease in comparable store sales and an 31.0% increase in e-commerce sales).
Store traffic continues to be negatively impacted by the pandemic. The Company
closed 13 full-line stores and opened six factory outlet stores in the last
twelve months.

Vera Bradley Indirect segment revenues totaled $15.2 million, a 14.7% decrease
from $17.8 million in the prior year fourth quarter, reflecting a reduction in
orders primarily related to the pandemic and in the number of specialty and
department store accounts.

Pura Vida segment revenues totaled $34.1 million, a 3.9% decrease from $35.5
million in the prior year fourth quarter. Growth in e-commerce sales were more
than offset by a decline in sales to wholesale accounts, which were negatively
affected by the pandemic. In addition, we made the strategic decision to
reduce discounting during the Black Friday period which we estimate negatively
impacted sales by about $6 million but improved gross margin performance.

Fourth quarter consolidated gross profit totaled $77.9 million, or 54.7% of
net revenues, compared to $86.1 million, or 54.9% of net revenues, in the
prior year fourth quarter. On a non-GAAP basis, excluding the Pura Vida
inventory step-up amortization, gross profit totaled $87.2 million, or 55.6%
of net revenues, in the prior year fourth quarter. The Company’s current
year fourth quarter gross profit rate was lower than the prior year primarily
due to surcharges associated with outbound shipping and incremental shipping
costs associated with higher e-commerce sales.

Consolidated SG&A expense totaled $68.9 million, or 48.4% of net revenues,
compared to $69.0 million, or 43.9% of net revenues, for the prior year fourth
quarter. On a non-GAAP basis, excluding store impairment charges and Pura Vida
intangible asset amortization, consolidated SG&A expense totaled $63.3
million, or 44.5% of net revenues. On a non-GAAP basis, excluding the Pura
Vida intangible asset amortization, incremental stock compensation and Pura
Vida transaction bonuses, Project Novus expenses, and an adjustment to reduce
the earn-out liability, consolidated SG&A expense totaled $67.2 million, or
42.8% of net revenues, for the prior year fourth quarter.

The Company’s fourth quarter consolidated operating income totaled $9.0
million, or 6.3% of net revenues, compared to $17.2 million, or 11.0% of net
revenues, in the prior year fourth quarter. On a non-GAAP basis, excluding the
previously disclosed charges (store impairment charges and intangible asset
amortization), current year fourth quarter consolidated operating income
totaled $14.6 million, or 10.3% of net revenues. On a non-GAAP basis,
excluding the previously disclosed net charges (intangible asset amortization,
incremental stock compensation and Pura Vida transaction bonuses, Project
Novus expenses, inventory step-up amortization, and an adjustment to reduce
the earn-out liability), prior year fourth quarter consolidated operating
income totaled $20.1 million, or 12.8% of net revenues.

By segment:
* Vera Bradley Direct fourth quarter operating income was $16.9 million, or
18.2% of Direct net revenues, compared to $23.3 million, or 22.5% of Direct
net revenues, in the prior year. On a non-GAAP basis, excluding store
impairment charges, current year fourth quarter Direct operating income
totaled $20.5 million, or 22.1% of Direct net revenues. On a non-GAAP basis,
excluding a portion of Project Novus expenses and incremental stock
compensation, prior year fourth quarter Direct operating income totaled $24.2
million, or 23.4% of Direct net revenues.
* Vera Bradley Indirect fourth quarter operating income was $5.9 million, or
39.0% of Indirect net revenues, compared to $6.9 million, or 38.6% of Indirect
net revenues, in the prior year. On a non-GAAP basis, excluding a portion of
the incremental stock compensation, prior year fourth quarter Indirect
operating income totaled $7.0 million, or 39.2% of Indirect net revenues.
* Pura Vida’s current year fourth quarter operating income was $4.0 million,
or 11.7% of Pura Vida net revenues, compared to $1.8 million, or 5.2% of Pura
Vida net revenues, in the prior year. On a non-GAAP basis, excluding
intangible asset amortization, Pura Vida’s current year fourth quarter
operating income was $6.0 million, or 17.6% of Pura Vida net revenues. On a
non-GAAP basis, excluding the Pura Vida acquisition-related charges
(intangible asset amortization and inventory step-up amortization), Pura
Vida’s prior year fourth quarter operating income was $5.4 million, or 15.1%
of Pura Vida net revenues.
Details for the Fiscal Year

Vera Bradley Direct segment revenues for the current fiscal year totaled
$289.3 million, a 16.8% decrease from $347.5 million in the prior year. The
decline primarily resulted from the Company’s stores that were closed as a
result of the pandemic for approximately half of the first and second
quarters, partially offset by a 49.0% increase in e-commerce sales during the
fiscal year.

Vera Bradley Indirect segment revenues for the fiscal year totaled $66.5
million, a 18.7% decrease from $81.8 million in the prior year, reflecting a
reduction in orders primarily related to the pandemic and in the number of
specialty and department store accounts.

Pura Vida segment revenues totaled $112.5 million compared $65.9 million in
the prior year, which represented a partial period from the date of
acquisition.

Consolidated gross profit for the current fiscal year totaled $265.5 million,
or 56.7% of net revenues, compared to $271.8 million, or 54.9% of net
revenues, last year. On a non-GAAP basis, excluding charges for the
cancellation of certain purchase orders resulting from COVID-19, gross profit
for the current fiscal year totaled $266.8 million, or 57.0% of net revenues,
compared to last year’s non-GAAP gross profit of $280.1 million, or 56.6% of
net revenues, which excluded inventory step-up amortization. The Company
expanded its year-over-year consolidated gross profit rate for the period
primarily through sales of cotton masks and product collaborations, and
despite incremental shipping costs.

For the fiscal year, consolidated SG&A expense totaled $252.6 million, or
53.9% or net revenues, compared to $253.4 million, or 51.2% of net revenues,
in the prior year. On a non-GAAP basis, excluding the previously outlined
intangible asset amortization, store impairment charges, Project Novus
expenses, an adjustment to the Pura Vida earn-out liability, and certain
department store exit costs, SG&A expense totaled $233.0 million, or 49.7% of
net revenues, in the current year. On a non-GAAP basis, excluding the Pura
Vida acquisition-related net charges (including intangible asset amortization,
transaction costs, and an adjustment to reduce the earn-out liability),
Project Novus expenses, and incremental stock compensation and Pura Vida
transaction bonuses, SG&A expense totaled $242.4 million, or 49.0% of net
revenues, in the prior year. Expense control was strong while including
incremental Pura Vida SG&A for nearly an additional six months in Fiscal 2021.

For the fiscal year, the Company’s consolidated operating income totaled
$13.1 million, or 2.8% of net revenues, compared to $19.5 million, or 3.9% of
net revenues, in the prior year. On a non-GAAP basis, excluding the previously
disclosed charges (intangible asset amortization, store impairment charges,
Project Novus expenses, charges related to the cancellation of certain
purchase orders, adjustment to the Pura Vida earn-out liability, and certain
department store exit costs), the Company’s consolidated operating income
was $34.0 million, or 7.3% of net revenues, in the current year. On a non-GAAP
basis, excluding the previously disclosed net charges (inventory step-up
amortization, intangible asset amortization, transaction costs, Project Novus
expenses, incremental stock compensation and Pura Vida transaction bonuses,
and an adjustment to reduce the earn-out liability), the Company’s
consolidated operating income was $38.8 million, or 7.8% of net revenues, in
the prior year.

By segment:
* Vera Bradley Direct operating income was $48.5 million, or 16.8% of Direct
net revenues, compared to $68.5 million, or 19.7% of net revenues, in the
prior year. On a non-GAAP basis, excluding store impairment charges, a portion
of the charges for the cancellation of certain purchase orders, and a portion
of Project Novus expenses, the current year Direct operating income was $59.0
million, or 20.4% of Direct net revenues. On a non-GAAP basis, excluding a
portion of the Project Novus expenses and incremental stock compensation,
prior year Direct operating income was $70.5 million, or 20.3% of Direct net
revenues.
* Vera Bradley Indirect operating income was $24.5 million, or 36.8% of
Indirect net revenues, compared to $31.1 million, or 38.0% of Indirect net
revenues, in the prior year. On a non-GAAP basis, excluding certain department
store exit costs and a portion of the charges for the cancellation of certain
purchase orders, current year Indirect operating income totaled $24.9 million,
or 37.4% of Indirect net revenues. On a non-GAAP basis, excluding a portion of
the incremental stock-based compensation, prior year Indirect operating income
totaled $31.2 million, or 38.1% of Indirect net revenues.
* Pura Vida’s operating income was $8.0 million, or 7.1% of Pura Vida net
revenues, compared to an operating loss of ($3.2) million, or (4.8%) of Pura
Vida net revenues, for the prior year. On a non-GAAP basis, excluding the
intangible asset amortization, Pura Vida’s operating income was $17.0
million, or 15.1% of Pura Vida net revenues, for the current year. On a
non-GAAP basis, excluding the Pura Vida acquisition-related charges (inventory
step-up amortization and intangible asset amortization), Pura Vida’s
operating income was $10.5 million, or 15.9% of Pura Vida net revenues, for
the prior year (representing a partial period from the date of acquisition).
Balance Sheet

Net capital spending for the fiscal year totaled $5.7 million compared to
$13.3 million in the prior year.

Cash, cash equivalents, and investments as of January 30, 2021 totaled $65.5
million compared to $73.8 million at the prior fiscal year end. The Company
repaid the $30.0 million balance on its $75.0 million ABL credit facility in
the fourth quarter of Fiscal 2021, leaving no borrowings on the facility at
fiscal year end.

Total fiscal year-end inventory was $141.4 million, compared to $123.6 million
at last fiscal year end. Year-end inventory was higher than the prior year
primarily due to the acceleration of certain Vera Bradley receipts into the
fourth quarter to mitigate industry-wide port and shipping delays and the
pull-forward of Pura Vida receipts into the fourth quarter related to the
Charli D’Amelio product launch. Management expects year-over-year inventory
should be down by approximately 5% by the end of Fiscal 2022.

During the first quarter of Fiscal 2021, the Company’s board of directors
temporarily suspended share repurchases due to the pandemic, so no purchases
have been made since that time. At the end of Fiscal 2021, the Company had
approximately $32.9 million remaining under its $50.0 million share repurchase
authorization which expires on December 11, 2021. The Company’s board of
directors has reauthorized resumption of the share repurchase program
beginning with the open trading period following this earnings release.

Fiscal 2022 Outlook

The uncertainties surrounding the continuing effects of COVID-19 on the retail
environment make future financial performance extremely difficult to predict.
However, management is providing its estimates for Fiscal 2022 (outlined
below) based on current expectations. Management expects store traffic and
revenue to improve in the second half of the year as vaccines become more
widely available.

All forward-looking guidance numbers referenced below are non-GAAP. The prior
year gross profit, SG&A, and earnings per diluted share numbers exclude the
previously disclosed net charges related to intangible asset amortization,
store impairment charges, Project Novus expenses, cancellation of certain
purchase orders related to the pandemic, adjustment to the Pura Vida earn-out
liability, and certain department store exit costs related to the pandemic.
Current year guidance excludes any similar charges.

For Fiscal 2022, the Company’s expectations are as follows:
* Consolidated net revenues of $550 to $575 million. Net revenues totaled
$468.3 million in Fiscal 2021. Year-over-year Pura Vida revenues are expected
to grow between 20% and 30%, and Vera Bradley revenues are expected to grow
between 15% and 20%.
* Free cash flow of between $50 and $55 million compared to $15.0 million in
the prior year.
* A consolidated gross profit percentage of 56.0% to 57.0% compared to 57.0%
in Fiscal 2021. The potential rate decline relates to an abatement in mask
penetration in Fiscal 2022 coupled with incremental costs for inbound and
outbound freight expense.
* Consolidated SG&A expense of $270 to $276 million compared to $233.0 million
in Fiscal 2021. The expected SG&A increase is primarily related to Vera
Bradley stores being opened for the full year (stores were temporarily closed
for between several weeks and several months in Fiscal 2021 due to the
pandemic), non-comparable compensation and Cares Act savings in Fiscal 2021,
and general variable increases associated with higher sales expectations.
* Consolidated operating income of $44 to $49 million compared to $34.0
million in Fiscal 2021.
* Consolidated diluted EPS of $0.80 to $0.90 based on diluted weighted-average
shares outstanding of 34.6 million and an effective tax rate of between 23.0
and 24.0%. Diluted EPS totaled $0.63 last year. Management’s expectation is
to generally meet or exceed the Company’s pre-pandemic Fiscal 2020 non-GAAP
diluted earnings per share of $0.82.
* Net capital spending of approximately $8 to $10 million compared to $5.7
million in the prior year, reflecting investments associated with new factory
locations and technology and logistics enhancements.
Disclosure Regarding Non-GAAP Measures

The Company's management does not, nor does it suggest that investors should,
consider the supplemental non-GAAP financial measures in isolation from, or as
a substitute for, financial information prepared in accordance with accounting
principles generally accepted in the United States (“GAAP”). Further, the
non-GAAP measures utilized by the Company may be unique to the Company, as
they may be different from non-GAAP measures used by other companies.

The Company believes that the non-GAAP measures presented in this earnings
release, including free cash flow; gross profit; selling, general, and
administrative expenses; operating income; net income; net income attributable
and available to Vera Bradley, Inc.; and diluted net income per share
available to Vera Bradley, Inc. common shareholders, along with the associated
percentages of net revenues, are helpful to investors because they allow for a
more direct comparison of the Company’s year-over-year performance and are
consistent with management’s evaluation of business performance. A
reconciliation of the non-GAAP measures to the most directly comparable GAAP
measures can be found in the Company’s supplemental schedules included in
this earnings release.

Call Information

A conference call to discuss results for the fourth quarter and fiscal year is
scheduled for today, Wednesday, March 10, 2021, at 9:30 a.m. Eastern Time. A
broadcast of the call will be available via Vera Bradley’s Investor
Relations section of its website, www.verabradley.com. Alternatively,
interested parties may dial into the call at (800) 289-0571, and enter the
access code 8012072. A replay will be available shortly after the conclusion
of the call and remain available through March 24, 2021. To access the
recording, listeners should dial (844) 512-2921, and enter the access code
8012072.

About Vera Bradley, Inc.

Vera Bradley, Inc. operates two unique lifestyle brands – Vera Bradley and
Pura Vida. Vera Bradley and Pura Vida are complementary businesses, both with
devoted, emotionally-connected, and multi-generational female customer bases;
alignment as causal, comfortable, affordable, and fun brands; positioning as
“gifting” and socially-connected brands; strong, entrepreneurial cultures;
a keen focus on community, charity, and social consciousness; multi-channel
distribution strategies; and talented leadership teams aligned and committed
to the long-term success of their brands.

Vera Bradley, based in Fort Wayne, Indiana, is a leading designer of women’s
handbags, luggage and other travel items, fashion and home accessories, and
unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and
Patricia R. Miller, the brand is known for its innovative designs, iconic
patterns, and brilliant colors that inspire and connect women unlike any other
brand in the global marketplace.

In July 2019, Vera Bradley, Inc. acquired a 75% interest in Creative Genius,
Inc., which also operates under the name Pura Vida Bracelets (“Pura
Vida”). Pura Vida, based in La Jolla, California, is a rapidly growing,
digitally native, and highly engaging lifestyle brand founded in 2010 by
friends Paul Goodman and Griffin Thall. Pura Vida has a differentiated and
expanding offering of bracelets, jewelry, and other lifestyle accessories.

The Company has three reportable segments: Vera Bradley Direct (“VB
Direct”), Vera Bradley Indirect (“VB Indirect”), and Pura Vida. The VB
Direct business consists of sales of Vera Bradley products through Vera
Bradley full-line and factory outlet stores in the United States,
verabradley.com, the Vera Bradley online outlet site, and the Vera Bradley
annual outlet sale in Fort Wayne, Indiana. The VB Indirect business consists
of sales of Vera Bradley products to approximately 2,000 specialty retail
locations throughout the United States, as well as select department stores,
national accounts, third party e-commerce sites, and third-party inventory
liquidators, and royalties recognized through licensing agreements related to
the Vera Bradley brand. The Pura Vida segment consists of sales of Pura Vida
products through the Pura Vida websites, www.puravidabracelets.com,
www.puravidabracelets.eu, and www.puravidabracelets.ca, and through the
distribution of its products to wholesale retailers.

Website Information

We routinely post important information for investors on our website
www.verabradley.com in the "Investor Relations" section. We intend to use this
webpage as a means of disclosing material, non-public information and for
complying with our disclosure obligations under Regulation FD. Accordingly,
investors should monitor the Investor Relations section of our website, in
addition to following our press releases, SEC filings, public conference
calls, presentations and webcasts. The information contained on, or that may
be accessed through, our webpage is not incorporated by reference into, and is
not a part of, this document.

Investors and other interested parties may also access the Company’s most
recent Corporate Responsibility and Sustainability Report outlining its ESG
(Environmental, Social, and Governance) initiatives at
https://www.verabradley.com/us/static/customerservice/corporateresponsibility.

Vera Bradley Safe Harbor Statement

Certain statements in this release are "forward-looking statements" made
pursuant to the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements reflect the Company's
current expectations or beliefs concerning future events and are subject to
various risks and uncertainties that may cause actual results to differ
materially from those that we expected, including: possible adverse changes in
general economic conditions and their impact on consumer confidence and
spending; possible inability to predict and respond in a timely manner to
changes in consumer demand; possible loss of key management or design
associates or inability to attract and retain the talent required for our
business; possible inability to maintain and enhance our brand; possible
inability to successfully implement the Company’s long-term strategic plan;
possible inability to successfully open new stores, close targeted stores,
and/or operate current stores as planned; incremental tariffs or adverse
changes in the cost of raw materials and labor used to manufacture our
products; possible adverse effects resulting from a significant disruption in
our distribution facilities; or business disruption caused by COVID-19. Risks,
uncertainties, and assumptions also include the possibility that Pura Vida
acquisition benefits may not materialize as expected; that Pura Vida’s
business may not perform as expected; and that the Company is unable to
successfully implement integration strategies related to the acquisition. More
information on potential factors that could affect the Company’s financial
results is included from time to time in the “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results
of Operations” sections of the Company’s public reports filed with the
SEC, including the Company’s Form 10-K for the fiscal year ended February 1,
2020. We undertake no obligation to publicly update or revise any
forward-looking statement. Financial schedules are attached to this release.

CONTACTS:
Investors:
Julia Bentley, VP of Investor Relations and Communications
jbentley@verabradley.com 
(260) 207-5116

Media:
mediacontact@verabradley.com
877-708-VERA (8372)



 Vera Bradley, Inc.                                                                                                                     
 Condensed Consolidated Balance Sheets                                                                                                  
 (in thousands)                                                                                                                         
 (unaudited)                                                                                                                            
                                                                                                                                        
                                                                                  January 30, 2021            February 1, 2020          
 Assets                                                                                                                                 
 Current assets:                                                                                                                        
 Cash and cash equivalents                                                        $       64,175              $       49,917            
 Short-term investments                                                                   1,295                       8,977             
 Accounts receivable, net                                                                 27,543                      24,290            
 Inventories                                                                              141,416                     123,606           
 Income taxes receivable                                                                  7,372                       1,043             
 Prepaid expenses and other current assets                                                17,882                      10,956            
 Total current assets                                                                     259,683                     218,789           
                                                                                                                                        
 Operating right-of-use assets                                                            88,730                      114,790           
 Property, plant, and equipment, net                                                      63,952                      73,027            
 Intangible assets, net                                                                   47,296                      56,305            
 Goodwill                                                                                 44,254                      44,254            
 Long-term investments                                                                    -                           14,912            
 Deferred income taxes                                                                    3,530                       7,656             
 Other assets                                                                             6,342                       5,328             
 Total assets                                                                     $       513,787             $       535,061           
                                                                                                                                        
 Liabilities, Redeemable Noncontrolling Interest, and Shareholders' Equity                                                              
 Current liabilities:                                                                                                                   
 Accounts payable                                                                 $       27,093              $       20,235            
 Accrued employment costs                                                                 13,648                      11,412            
 Short-term operating lease liabilities                                                   22,321                      21,347            
 Earn-out liability                                                                       -                           18,448            
 Other accrued liabilities                                                                14,043                      13,850            
 Income taxes payable                                                                     321                         2,113             
 Total current liabilities                                                                77,426                      87,405            
                                                                                                                                        
 Long-term operating lease liabilities                                                    91,536                      113,775           
 Other long-term liabilities                                                              109                         62                
 Total liabilities                                                                        169,071                     201,242           
                                                                                                                                        
 Redeemable noncontrolling interest                                                       29,809                      30,049            
 Shareholders' equity:                                                                                                                  
 Additional paid-in-capital                                                               105,433                     100,357           
 Retained earnings                                                                        316,526                     307,414           
 Accumulated other comprehensive income                                                   8                           158               
 Treasury stock                                                                           (107,060  )                 (104,159  )       
 Total shareholders' equity of Vera Bradley, Inc.                                         314,907                     303,770           
 Total liabilities, redeemable noncontrolling interest, and shareholders' equity  $       513,787             $       535,061           
                                                                                                                                        



 Vera Bradley, Inc.                                                                                                                                                                              
 Condensed Consolidated Statements of Operations                                                                                                                                                 
 (in thousands, except per share amounts)                                                                                                                                                        
 (unaudited)                                                                                                                                                                                     
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                                                                   Thirteen Weeks Ended                                     Fifty-Two Weeks Ended                                
                                                                                   January 30, 2021              February 1, 2020           January 30, 2021            February 1, 2020         
                                                                                                                                                                                                 
 Net revenues                                                                      $       142,369               $       156,923            $          468,272          $       495,212          
 Cost of sales                                                                             64,491                        70,793                        202,754                  223,411          
 Gross profit                                                                              77,878                        86,130                        265,518                  271,801          
 Selling, general, and administrative expenses                                             68,948                        68,960                        252,588                  253,425          
 Other income                                                                              46                            77                            135                      1,098            
 Operating income                                                                          8,976                         17,247                        13,065                   19,474           
 Interest expense (income), net                                                            348                           (130     )                    1,203                    (1,085   )       
 Income before income taxes                                                                8,628                         17,377                        11,862                   20,559           
 Income tax (benefit) expense                                                              (297     )                    4,464                         1,173                    5,315            
 Net income                                                                                8,925                         12,913                        10,689                   15,244           
 Less: Net income (loss) attributable to redeemable noncontrolling interest                997                           454                           2,008                    (803     )       
 Net income attributable to Vera Bradley, Inc.                                     $       7,928                 $       12,459             $          8,681            $       16,047           
                                                                                                                                                                                                 
 Basic weighted-average shares outstanding                                                 33,414                        33,620                        33,390                   33,983           
 Diluted weighted-average shares outstanding                                               34,291                        34,086                        33,914                   34,288           
                                                                                                                                                                                                 
 Basic net income per share available to Vera Bradley, Inc. common shareholders    $       0.24                  $       0.37               $          0.26             $       0.47             
 Diluted net income per share available to Vera Bradley, Inc. common shareholders  $       0.23                  $       0.37               $          0.26             $       0.47             
                                                                                                                                                                                                 



 Vera Bradley, Inc.                                                                                                                        
 Condensed Consolidated Statements of Cash Flows                                                                                           
 (in thousands)                                                                                                                            
 (unaudited)                                                                                                                               
                                                                                                                                           
                                                                                    Fifty-Two Weeks Ended                                  
                                                                                    January 30, 2021              February 1, 2020         
 Cash flows from operating activities                                                                                                      
 Net income                                                                         $       10,689                $       15,244           
 Adjustments to reconcile net income to net cash provided by operating activities:                                                         
 Depreciation of property, plant, and equipment                                     13,483                        18,447                   
 Impairment charges                                                                 7,446                         -                        
 Amortization of operating right-of-use assets                                      21,128                        21,969                   
 Amortization of intangible assets                                                  9,009                         5,359                    
 Provision for doubtful accounts                                                    1,333                         160                      
 Stock-based compensation                                                           5,651                         5,940                    
 Deferred income taxes                                                              4,126                         (864             )       
 Loss (gain) on investments                                                         13                            (188             )       
 Adjustment of earn-out liability                                                   229                           (1,650           )       
 Amortization of step-up in inventory basis                                         -                             8,274                    
 Other non-cash (gain) charges, net                                                 (1              )             202                      
 Changes in assets and liabilities:                                                                                                        
 Accounts receivable                                                                (5,579          )             (1,013           )       
 Inventories                                                                        (17,810         )             (12,645          )       
 Prepaid expenses and other assets                                                  (7,940          )             (4,477           )       
 Accounts payable                                                                   7,353                         (615             )       
 Income taxes                                                                       (8,121          )             (284             )       
 Operating lease liabilities, net                                                   (22,680         )             (25,302          )       
 Accrued and other liabilities                                                      2,373                         (7,933           )       
 Net cash provided by operating activities                                          20,702                        20,624                   
                                                                                                                                           
 Cash flows from investing activities                                                                                                      
 Purchases of property, plant, and equipment                                        (5,743          )             (13,317          )       
 Purchases of investments                                                           (851            )             (18,950          )       
 Proceeds from maturities and sales of investments                                  23,281                        38,333                   
 Cash received (paid) for business acquisition, net of cash acquired                993                           (76,032          )       
 Net cash provided by (used in) investing activities                                17,680                        (69,966          )       
                                                                                                                                           
 Cash flows from financing activities                                                                                                      
 Tax withholdings for equity compensation                                           (575            )             (1,155           )       
 Repurchase of common stock                                                         (3,077          )             (11,341          )       
 Distributions to redeemable noncontrolling interest                                (1,817          )             (1,789           )       
 Borrowings under asset-based revolving credit agreement                            60,000                        -                        
 Repayment of borrowings under asset-based revolving credit agreement               (60,000         )             -                        
 Payment of contingent consideration for business acquisition                       (18,677         )             -                        
 Net cash used in financing activities                                              (24,146         )             (14,285          )       
 Effect of exchange rate changes on cash and cash equivalents                       22                            51                       
                                                                                                                                           
 Net increase (decrease) in cash and cash equivalents                               $       14,258                $       (63,576  )       
 Cash and cash equivalents, beginning of period                                     49,917                        113,493                  
 Cash and cash equivalents, end of period                                           $       64,175                $       49,917           
                                                                                                                                           

 

 Vera Bradley, Inc.                                                                                                                                                    
 Fourth Quarter Fiscal 2021                                                                                                                                            
 GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended January 30, 2021                                                                                                 
 (in thousands, except per share amounts)                                                                                                                              
 (unaudited)                                                                                                                                                           
                                                                                          Thirteen Weeks Ended                                                         
                                                                                          As Reported              Other Items              Non-GAAP                   
                                                                                                                                            (Excluding Items)          
 Gross profit                                                                             $     77,878             $     -                  $        77,878            
 Selling, general, and administrative expenses                                                  68,948                   5,662         (1)           63,286            
 Operating income (loss)                                                                        8,976                    (5,662  )                   14,638            
 Income (loss) before income taxes                                                              8,628                    (5,662  )                   14,290            
 Income tax (benefit) expense                                                                   (297     )               (2,596  )     (2)           2,299             
 Net income (loss)                                                                              8,925                    (3,066  )                   11,991            
 Less: Net income (loss) attributable to redeemable noncontrolling interest                     997                      (506    )                   1,503             
 Net income (loss) attributable to Vera Bradley, Inc.                                           7,928                    (2,560  )                   10,488            
 Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders  $     0.23               $     (0.07   )          $        0.31              
                                                                                                                                                                       
 Vera Bradley Direct segment operating income (loss)                                      $     16,890             $     (3,640  )     (3)  $        20,530            
 Vera Bradley Indirect segment operating income                                           $     5,927              $     -                  $        5,927             
 Pura Vida segment operating income (loss)                                                $     3,985              $     (2,022  )     (4)  $        6,007             
 Unallocated corporate expenses                                                           $     (17,826  )         $     -                  $        (17,826  )        
                                                                                                                                                                       
 (1)Items include $3,640 for store impairment charges and $2,022 for the amortization of definite-lived intangible assets                                              
 (2)Related to the tax impact of the charges mentioned above                                                                                                           
 (3)Related to store impairment charges                                                                                                                                
 (4)Related to the amortization of definite-lived intangible assets                                                                                                    
                                                                                                                                                                       



 Vera Bradley, Inc.                                                                                                                                                                                                                                                                     
 Fourth Quarter Fiscal 2020                                                                                                                                                                                                                                                             
 GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended February 1, 2020                                                                                                                                                                                                                  
 (in thousands, except per share amounts)                                                                                                                                                                                                                                               
 (unaudited)                                                                                                                                                                                                                                                                            
                                                                             Thirteen Weeks Ended                                                                                                                                                                                       
                                                                             As Reported                                                                                                 Other Items                                                         Non-GAAP                   
                                                                                                                                                                                                                                                             (Excluding Items)          
 Gross profit (loss)                                                         $                            86,130                                                                         $                    (1,044               )                    (1)  $        87,174            
 Selling, general, and administrative expenses                                                            68,960                                                                                              1,803                                     (2)           67,157            
 Operating income (loss)                                                                                  17,247                                                                                              (2,847               )                                  20,094            
 Income (loss) before income taxes                                                                        17,377                                                                                              (2,847               )                                  20,224            
 Income tax expense (benefit)                                                                             4,464                                                                                               (88                  )                    (3)           4,552             
 Net income (loss)                                                                                        12,913                                                                                              (2,759               )                                  15,672            
 Less: Net income (loss) attributable to redeemable noncontrolling interest                               454                                                                                                 (880                 )                                  1,334             
 Net income (loss) attributable to Vera Bradley, Inc.                                                     12,459                                                                                              (1,879               )                                  14,338            
 Diluted net income (loss) per share attributable to Vera Bradley, Inc.      $                            0.37                                                                           $                    (0.06                )                         $        0.42              
                                                                                                                                                                                                                                                                                        
 Vera Bradley Direct segment operating income (loss)                         $                            23,333                                                                         $                    (864                 )                    (4)  $        24,197            
 Vera Bradley Indirect segment operating income (loss)                       $                            6,884                                                                          $                    (108                 )                    (5)  $        6,992             
 Pura Vida segment operating income (loss)                                   $                            1,846                                                                          $                    (3,519               )                    (6)  $        5,365             
 Unallocated corporate expenses                                              $                            (14,816                      )                                                 $                    1,644                                     (7)  $        (16,460  )        
                                                                                                                                                                                                                                                                                        
 (1)Related to a purchase accounting adjustment for the amortization of the step-up in inventory basis associated with the acquisition of Pura Vida                                                                                                                                     
 (2)Items include $(3,452) for an adjustment to reduce the earn-out liability, $2,475 for the amortization of definite-lived intangible assets and $275 for bonuses associated with the acquisition of Pura Vida;                                                                       
 $1,340 for incremental stock-based compensation as a result of Pura Vida performance; and $1,165 for technology-related re-platforming charges including certain professional fees and accelerated depreciation                                                                        
 (3)Related to the tax impact of the charges mentioned above                                                                                                                                                                                                                            
 (4)Related to $795 for technology re-platforming charges and $69 for incremental stock-based compensation                                                                                                                                                                              
 (5)Related to incremental stock-based compensation                                                                                                                                                                                                                                     
 (6)Related to the purchase accounting adjustments for the Pura Vida acquisition, including the amortization of the step-up in inventory basis and the amortization of definite-lived intangible assets                                                                                 
 (7)Related to $(3,452) for an adjustment to reduce the earn-out liability; $1,163 for incremental stock-based compensation; $370 for technology re-platforming charges; and $275 for bonuses associated with the Pura Vida acquisition                                                 
                                                                                                                                                                                                                                                                                        



 Vera Bradley, Inc.                                                                                                                                                     
 GAAP to Non-GAAP Reconciliation Fifty-Two Weeks Ended January 30, 2021                                                                                                 
 (in thousands, except per share amounts)                                                                                                                               
 (unaudited)                                                                                                                                                            
                                                                                          Fifty-Two Weeks Ended                                                         
                                                                                          As Reported              Other Items               Non-GAAP                   
                                                                                                                                             (Excluding Items)          
 Gross profit (loss)                                                                      $     265,518            $     (1,320   )     (1)  $        266,838           
 Selling, general, and administrative expenses                                                  252,588                  19,635         (2)           232,953           
 Operating income (loss)                                                                        13,065                   (20,955  )                   34,020            
 Income (loss) before income taxes                                                              11,862                   (20,955  )                   32,817            
 Income tax expense (benefit)                                                                   1,173                    (5,985   )     (3)           7,158             
 Net income (loss)                                                                              10,689                   (14,970  )                   25,659            
 Less: Net income (loss) attributable to redeemable noncontrolling interest                     2,008                    (2,252   )                   4,260             
 Net income (loss) attributable to Vera Bradley, Inc.                                           8,681                    (12,718  )                   21,399            
 Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders  $     0.26               $     (0.38    )          $        0.63              
                                                                                                                                                                        
 Vera Bradley Direct segment operating income (loss)                                      $     48,524             $     (10,482  )     (4)  $        59,006            
 Vera Bradley Indirect segment operating income (loss)                                    $     24,502             $     (387     )     (5)  $        24,889            
 Pura Vida segment operating income (loss)                                                $     8,031              $     (9,009   )     (6)  $        17,040            
 Unallocated corporate expenses                                                           $     (67,992  )         $     (1,077   )     (7)  $        (66,915  )        
                                                                                                                                                                        
 (1)Related to charges for the cancellation of certain purchase orders as a result of COVID-19                                                                          
 (2)Items include $9,009 for the amortization of definite-lived intangible assets; $7,446 for store impairment charges; $2,738 for technology-related re-platforming charges including certain professional fees and accelerated depreciation; $229 for an adjustment upon payment of the earn-out liability; and $213 in certain department store exit costs as a result of COVID-19 
 (3)Related to the tax impact of the charges mentioned above                                                                                                            
 (4)Related to $7,446 for impairment charges; $1,146 for an allocation of charges for the cancellation of purchase orders; and $1,890 for technology re-platforming charges 
 (5)Related to $213 in certain department store exit costs and $174 for an allocation of charges for the cancellation of purchase orders                                
 (6)Related to the amortization of definite-lived intangible assets                                                                                                     
 (7)Related to $848 for technology re-platforming charges and $229 for an adjustment upon payment of the earn-out liability                                             
                                                                                                                                                                        



 Vera Bradley, Inc.                                                                                                                                                                                                                                                                        
 GAAP to Non-GAAP Reconciliation Fifty-Two Weeks Ended February 1, 2020                                                                                                                                                                                                                    
 (in thousands, except per share amounts)                                                                                                                                                                                                                                                  
 (unaudited)                                                                                                                                                                                                                                                                               
                                                                             Fifty-Two Weeks Ended                                                                                                                                                                                         
                                                                             As Reported                                                                                                    Other Items                                                         Non-GAAP                   
                                                                                                                                                                                                                                                                (Excluding Items)          
 Gross profit (loss)                                                         $                             271,801                                                                          $                    (8,274               )                    (1)  $        280,075           
 Selling, general, and administrative expenses                                                             253,425                                                                                               11,008                                    (2)           242,417           
 Operating income (loss)                                                                                   19,474                                                                                                (19,282              )                                  38,756            
 Income (loss) before income taxes                                                                         20,559                                                                                                (19,282              )                                  39,841            
 Income tax expense (benefit)                                                                              5,315                                                                                                 (3,734               )                    (3)           9,049             
 Net income (loss)                                                                                         15,244                                                                                                (15,548              )                                  30,792            
 Less: Net (loss) income attributable to redeemable noncontrolling interest                                (803                          )                                                                       (3,409               )                                  2,606             
 Net income (loss) attributable to Vera Bradley, Inc.                                                      16,047                                                                                                (12,139              )                                  28,186            
 Diluted net income (loss) per share attributable to Vera Bradley, Inc.      $                             0.47                                                                             $                    (0.35                )                         $        0.82              
                                                                                                                                                                                                                                                                                           
 Vera Bradley Direct segment operating income (loss)                         $                             68,505                                                                           $                    (2,011               )                    (4)  $        70,516            
 Vera Bradley Indirect segment operating income (loss)                       $                             31,077                                                                           $                    (108                 )                    (5)  $        31,185            
 Pura Vida segment operating (loss) income                                   $                             (3,179                        )                                                  $                    (13,633              )                    (6)  $        10,454            
 Unallocated corporate expenses                                              $                             (76,929                       )                                                  $                    (3,530               )                    (7)  $        (73,399  )        
                                                                                                                                                                                                                                                                                           
 (1)Related to a purchase accounting adjustment for the amortization of the step-up in inventory basis associated with the acquisition of Pura Vida                                                                                                                                        
 (2)Items include $5,359 for the amortization of definite-lived intangible assets, $2,721 for transaction costs, $(1,649) for an adjustment to reduce the earn-out liability and $275 for bonuses                                                                                          
 associated with the acquisition of Pura Vida; $2,962 for technology-related re-platforming charges including certain professional fees and accelerated depreciation; and                                                                                                                  
 $1,340 for incremental stock-based compensation as a result of Pura Vida performance                                                                                                                                                                                                      
 (3)Related to the tax impact of the charges mentioned above                                                                                                                                                                                                                               
 (4)Related to $1,942 for technology re-platforming charges and $69 for incremental stock-based compensation                                                                                                                                                                               
 (5)Related to incremental stock-based compensation                                                                                                                                                                                                                                        
 (6)Related to the purchase accounting adjustments for the Pura Vida acquisition, including the amortization of the step-up in inventory basis and the amortization of definite-lived intangible assets                                                                                    
 (7)Related to $2,721 for Pura Vida transaction costs; $(1,649) for an adjustment to reduce the earn-out liability; $1,163 for incremental stock-based compensation;                                                                                                                       
 $1,020 for technology re-platforming charges; and $275 for bonuses associated with the Pura Vida acquisition                                                                                                                                                                              
                                                                                                                                                                                                                                                                                           



 Vera Bradley, Inc.                                                                                  
 Free Cash Flow Reconciliation                                                                       
 (in thousands)                                                                                      
 (unaudited)                                                                                         
                                              Fifty-Two Weeks Ended                                  
                                              January 30, 2021              February 1, 2020         
 Net cash provided by operating activities    $       20,702                $       20,624           
 Purchases of property, plant, and equipment          (5,743  )                     (13,317  )       
                                                                                                     
 Free cash flow                               $       14,959                $       7,307            
                                                                                                     

 

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