Coldwater Creek Announces First Quarter 2009 Results

SANDPOINT, Idaho, May 27 /PRNewswire-FirstCall/ -- Coldwater Creek Inc.
(Nasdaq: CWTR) today reported financial results for the three-month period
ended May 2, 2009.

First Quarter Operating Results
-- Net sales were $228.4 million, compared with $271.1 million in the
fiscal 2008 first quarter. Sales from the retail segment, which
includes
the Company's premium retail stores, outlet stores and day spa
locations, were $170.7 million versus $186.9 million in the fiscal
2008
first quarter. Comparable store sales declined 18.6 percent in the
first
quarter versus the first quarter of fiscal 2008. Direct sales (phone
and internet) were $57.7 million, compared with $84.2 million in the
same period last year.
-- Gross profit for the fiscal 2009 first quarter was $71.1 million, or
31.1 percent of net sales, compared with $92.8 million, or 34.2
percent
of net sales, for the fiscal 2008 first quarter. The decline in gross
profit was primarily due to the impact of lower sales on fixed
occupancy
expense.
-- Selling, general and administrative expenses ("SG&A") for
the fiscal 2009 first quarter were $82.7 million, or 36.2 percent of
net
sales, compared with $107.8 million, or 39.8 percent of net sales, for
the fiscal 2008 first quarter. The decrease in selling, general and
administrative expenses of approximately $25 million was driven by the
Company's cost savings plan and included reduced payroll and
marketing expenses, among other areas.

-- Net loss for the three-month period was $7.6 million, or $0.08 per
share, compared with a net loss of $9.2 million, or $0.10 per share,
for
the three-month period ended May 3, 2008.

The Company ended the period with a strong balance sheet (as of May 2, 2009,
as compared to May 3, 2008):
-- Cash totaled $74.9 million, compared with $74.5 million;
-- Premium retail store inventory per square foot, including retail
inventory in the distribution center, decreased by approximately 14
percent;
-- Total inventory increased 2.8% to $130.1 million despite adding 13%
more
retail square footage, compared with $126.6 million; and

-- Working capital was $88.7 million, compared to $92.8 million.

Daniel Griesemer, president and chief executive officer of Coldwater Creek
said, "While our performance in the quarter resulted in a loss, we continued
to make progress implementing our strategies and have seen meaningful
improvement in our sales trends in April and May. Although it is still early
in the quarter, we are encouraged that our hard work during the past year is
beginning to gain traction. As we look ahead, we remain cautious given the
highly promotional environment. However, we begin the second quarter with a
solid foundation and continue to advance our product initiatives focused on
providing the appropriate balance of fashion, fit, and value to our customer.
We are confident in our brand direction and believe the steps we are taking
are positioning the Company for long-term sustained growth."

Store Openings
The Company opened three new premium retail stores and two outlet stores
during the three-month period ended May 2, 2009, bringing its store count at
the end of the quarter to 351 premium locations. The Company plans to open no
more than 10 new stores in fiscal 2009.

Outlook
Although the Company currently expects to report a loss for the second quarter
of fiscal 2009, it anticipates sequential improvement from first quarter
results. The Company also noted that it remains committed to delivering at
least $30 million in SG&A savings for fiscal 2009 over fiscal 2008 and ending
the year with over $100 million in cash.

Conference Call Information
Coldwater Creek will host a conference call on Wednesday, May 27, 2009, at
4:30 p.m. (Eastern) to discuss fiscal 2009 first quarter results. To listen to
the live Web cast, log on to http://www.videonewswire.com/event.asp?id=59109.
Also, a link to the live Web cast of the call is provided in the Investor
Relations section of the Company's Web site at http://www.coldwatercreek.com/.
The call will be archived from approximately one hour after the conference
call until Wednesday June 10, 2009. The replay can be accessed by dialing
(877) 660-6853 and providing account number 3055 and pass code 323370. A
replay and transcript of the call will also be available in the investor
relations section of the Company's Web site.

Founded in 1984, and headquartered in Sandpoint, Idaho, Coldwater Creek is a
leading specialty retailer of women's apparel, gifts, jewelry, and
accessories. The company sells its merchandise through premium retail stores
across the country, online at coldwatercreek.com and through its catalogs.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release contains "forward-looking statements" within the meaning of
the securities laws, including statements relating to our future operating
plans and financial results. These statements are based on management's
current expectations and are subject to a number of uncertainties and risks,
as well as assumptions that if they do not fully materialize or prove
incorrect, could cause our actual results to differ materially from those
expressed or implied by the forward-looking statements. Important factors that
could cause actual results to differ materially from estimates or projections
contained in the forward-looking statements include, but are not limited to:
-- the inherent difficulty in forecasting consumer buying and retail
traffic patterns and trends, which continue to be erratic and are
affected by factors beyond our control, such as the current
macroeconomic conditions and the global credit crisis, continuing
heavy
promotional activity in the specialty retail marketplace, and
competitive conditions and the possibility that because of lower than
expected customer response, or because of competitive pricing
pressures,
we may be required to sell merchandise at lower than expected margins,
or at a loss;
-- the possibility that our SG&A and cash projections will not be
realized, due to changing business conditions, including our potential
decision to invest opportunistically in our business;
-- our potential inability to recover the substantial fixed costs of our
retail store base due to sluggish sales;
-- our potential inability to continue to fund our operations solely with
operating cash as a result of either lower sales or higher than
anticipated costs, or both;
-- delays we may encounter in sourcing merchandise from our foreign and
domestic vendors, including the potential inability of our vendors to
finance production of the goods we order; risks related to our foreign
sourcing strategy; and the possibility that foreign sourcing may not
lead to any reduction of our sourcing costs or improvement in our
margins;
-- because we currently are carrying relatively low levels of inventory,
we
may not have sufficient merchandise to meet demand, which may result
in
lost sales and lower customer satisfaction;
-- the effect of volatile energy costs on various aspects of our
business,
including shipping, transportation, merchandise acquisition and
consumer
spending;
-- increasing competition from discount retailers and companies that have
introduced concepts or products similar to ours;
-- unexpected costs or problems associated with our efforts to manage our
expanding and increasingly complex business, including our current
efforts to improve key management information systems and controls;

-- the risk that the benefits expected from our strategic initiatives
will
not be achieved or may take longer to achieve than we expect;

and such other factors as are discussed in our most recent Annual Report on
Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC"). We
believe that these forward-looking statements are reasonable; however, you
should not place undue reliance on forward-looking statements, which are based
on current expectations and speak only as of the date of this release. We are
not obligated to publicly release any revisions to forward-looking statements
to reflect events after the date of this release. We provide a detailed
discussion of risk factors in periodic SEC filings, and you are encouraged to
review these filings in connection with this release.

Contact:
Lyn Walther, Divisional Vice President, Investor Relations
Phone: 208-265-7005
Web site: http://www.coldwatercreek.com/

COLDWATER CREEK INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND SUPPLEMENTAL DATA
(unaudited, in thousands except for per share data and store
counts)

Three Months Ended
------------------
May 2, May 3,
2009 2008
---- ----
Statements of Operations:
Net sales $228,367 $271,105
Cost of sales 157,267 178,305
------- -------
Gross profit 71,100 92,800
Selling, general and administrative
expenses 82,712 107,806
------ -------
Loss from operations (11,612) (15,006)
Interest, net, and other (159) 553
---- ---
Loss before income taxes (11,771) (14,453)
Income tax benefit (4,209) (5,213)
------ ------
Net loss $(7,562) $(9,240)
======= =======
Net loss per share - Basic $(0.08) $(0.10)
====== ======
Weighted average shares outstanding -
Basic 91,287 90,848
Net loss per share - Diluted $(0.08) $(0.10)
====== ======
Weighted average shares outstanding -
Diluted 91,287 90,848

Supplemental Data:
Three Months Ended
------------------
May 2, May 3,
Operating Statistics: 2009 2008
---- ----

Catalogs mailed 18,885 29,472
Premium retail store count 351 315
Spa store count 9 9
Outlet store count 37 32
Premium retail store square footage 2,074 1,841

Three Months Ended
------------------
May 2, May 3,
Segment Net Sales: 2009 2008
---- ----

Retail $170,710 $186,871
Direct 57,657 84,234
Total $228,367 $271,105
======== ========

COLDWATER CREEK INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except for share data)

May 2, January 31, May 3,
2009 2009 2008
---- ---- ----
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $74,874 $81,230 $74,505
Receivables 14,295 15,991 26,101
Inventories 130,141 135,376 126,604
Prepaid and other 19,193 11,086 18,082
Income taxes recoverable 18,166 14,895 18,189
Prepaid and deferred marketing
costs 7,427 5,361 10,985
Deferred income taxes 10,109 9,792 8,073
------ ----- -----

Total current assets 274,205 273,731 282,539

Property and equipment, net 331,839 337,766 346,274
Deferred income taxes 14,461 14,147 8,001
Restricted cash 1,776 1,776 2,664
Other 1,510 1,207 662
----- ----- ---

Total assets $623,791 $628,627 $640,140
======== ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable $106,075 $93,355 $103,282
Accrued liabilities 74,782 82,469 81,413
Current deferred marketing fees
And revenue sharing 4,674 4,918 5,054
----- ----- -----

Total current liabilities 185,531 180,742 189,749

Deferred rents 134,817 137,216 125,057
Capital lease and other financing
obligations 12,866 13,316 14,126
Supplemental Employee Retirement
Plan 7,905 7,807 8,103
Deferred marketing fees and revenue
sharing 5,005 5,823 6,323
Other 1,069 1,227 2,347
----- ----- -----

Total liabilities 347,193 346,131 345,705
------- ------- -------

Commitments and contingencies

STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value,
1,000,000 shares authorized,
none issued and outstanding - - -
Common stock, $.01 par value,
300,000,000 shares authorized,
91,344,682; 91,264,527; and
90,909,065 shares issued,
respectively 913 913 909
Additional paid-in capital 117,510 115,921 111,746
Accumulated other comprehensive
loss (1,259) (1,334) (1,939)
Retained earnings 159,434 166,996 183,719
------- ------- -------

Total stockholders' equity 276,598 282,496 294,435
------- ------- -------

Total liabilities and
stockholders' equity $623,791 $628,627 $640,140
======== ======== ========

COLDWATER CREEK INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)

Three Months
Ended
------------
May 2, May 3,
2009 2008
---- ----
OPERATING ACTIVITIES:
Net loss $(7,562) $(9,240)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 15,732 14,984
Stock compensation expense 1,380 1,203
Supplemental Employee Retirement Plan expense 323 323
Deferred income taxes (679) (369)
Excess tax benefit from exercises of stock
options - (1)
Net loss on asset dispositions and impairments 46 182
Other 3 302
Net change in current assets and liabilities:
Receivables 1,696 2,419
Inventories 5,235 13,389
Prepaid and other and income taxes recoverable (12,343) (4,740)
Prepaid and deferred marketing costs (2,066) 2,677
Accounts payable 11,755 21,735
Accrued liabilities (7,932) (7,050)
Change in deferred marketing fees and revenue sharing (1,062) (939)
Change in deferred rents (2,193) 3,134
Other changes in non-current assets and liabilities (124) -
---- ---
Net cash provided by operating activities 2,209 38,009
----- ------

INVESTING ACTIVITIES:
Purchase of property and equipment (7,735) (26,275)
------ -------
Net cash used in investing activities (7,735) (26,275)
------ -------

FINANCING ACTIVITIES:
Net proceeds from exercises of stock options and
ESPP purchases 204 514
Credit facility financing costs (618) -
Excess tax benefit from exercises of stock
options - 1
Payments on capital lease and other financing
obligations (416) (223)
---- ----
Net cash (used in) provided by financing
activities (830) 292
---- ---

Net (decrease) increase in cash and cash
equivalents (6,356) 12,026
Cash and cash equivalents, beginning 81,230 62,479
------ ------

Cash and cash equivalents, ending $74,874 $74,505
======= =======

SOURCE Coldwater Creek

Lyn Walther, Divisional Vice President, Investor Relations of Coldwater Creek,
+1-208-265-7005