WAYNE, NJ (September 8, 2011) – Toys″R″Us, Inc. today reported financial results for the second quarter ended July 30, 2011.
Jerry Storch, Chairman and CEO, Toys″R″Us, Inc., stated, ″We are pleased with our operating business performance in delivering solid results this quarter. In significantly improving our operating earnings and reporting our best-ever second quarter adjusted EBITDA, we continue to demonstrate that we are focused on maximizing the benefits of our investments, and executing on our key strategic initiatives to improve the customer experience.″
Mr. Storch added, ″I'm proud of the team for achieving these results and for their strong commitment to growing margin rate and managing expenses in this tough business climate. In the context of this uncertain economic environment, we believe our team has taken the right steps to position the company well for the remainder of the year, which includes our peak selling season. We are excited by the differentiated merchandise assortment we will offer shoppers in the months ahead and the plans we have in place to provide value, knowledgeable service and added convenience to consumers.″
Trends in sales, margin and expenses were similar in the Domestic and International segments. In the Domestic segment operating earnings grew by $15 million, from $57 million to $72 million. Operating earnings in the International segment grew by $12 million, from $39 million to $51 million.
Note: All comparisons are versus the same period one year ago.
The company ended the quarter with total liquidity of $1.6 billion including cash and cash equivalents of $356 million and unused available lines of credit of $1,276 million. Stockholders' equity was $321 million, up from $39 million in the prior year.
The company's capital expenditure program is a key component of its long-term juvenile integration strategy, which integrates the toy and juvenile businesses into one store. Year-to-date, the company invested $141 million primarily to convert, expand and remodel existing stores, open new stores and upgrade its information technology systems and capabilities, compared to $117 million in the prior year. For the entire 2011 fiscal year, the company intends to spend approximately $400 million on capital expenditures.
 A detailed description and reconciliation of EBITDA and Adjusted EBITDA, and management's reasons for using these measures, are set forth at the end of this press release.
Further information regarding the company's financial performance in the second quarter of fiscal 2011 is presented in its quarterly report on Form 10-Q, which was filed with the Securities and Exchange Commission on September 8, 2011.
Toys″R″Us, Inc. is the world's leading dedicated toy and juvenile products retailer, offering a differentiated shopping experience through its family of brands. Merchandise is sold in 874 Toys″R″Us and Babies″R″Us stores in the United States and Puerto Rico, and in more than 520 international stores and over 200 licensed stores in 34 countries and jurisdictions. In addition, it exclusively operates the legendary FAO Schwarz brand and sells extraordinary toys in the brand's flagship store on Fifth Avenue in New York City. With its strong portfolio of e-commerce sites including Toysrus.com, Babiesrus.com, eToys.com, and FAO.com, it provides shoppers with a broad online selection of distinctive toy and baby products. Headquartered in Wayne, NJ, Toys″R″Us, Inc. employs approximately 70,000 associates annually worldwide. The company is committed to serving its communities as a caring and reputable neighbor through programs dedicated to keeping kids safe and helping them in times of need.
This press release contains ″forward-looking″ statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created thereby. All statements herein that are not historical facts, including statements about our beliefs or expectations, are forward-looking statements. We generally identify these statements by words or phrases such as ″anticipate,″ ″estimate,″ ″plan,″ ″expect,″ ″project″, ″forecast″, ″foresee″, ″outlook″, ″believe,″ ″intend,″ ″will,″ ″may,″ and similar words or phrases. These statements discuss, among other things, our strategy, store openings and renovations, capital spending, future financial or operational performance including profitable growth expectations, anticipated cost savings, results of restructurings, anticipated domestic or international developments, and other goals, targets and future occurrences and trends. These statements are subject to risks, uncertainties and other factors, including, among others, competition in the retail industry and changes in our product distribution mix and distribution channels, seasonality of our business, changes in consumer preferences and consumer spending patterns, product safety issues including product recalls, general economic conditions in the United States and other countries in which we conduct our business, our ability to implement our strategy, our substantial level of indebtedness and related debt-service obligations, restrictions imposed by covenants in our debt agreements, availability of adequate financing, changes in laws that impact our business, changes in employment legislation, our dependence on key vendors for our merchandise, costs of goods that we sell, labor costs, transportation costs, domestic and international events affecting the delivery of toys and other products to our stores, political and other developments associated with our international operations, existence of adverse litigation and other risks, uncertainties and factors set forth under Item 1A entitled ″RISK FACTORS″ of our Annual Report on Form 10-K and in our other reports and documents filed with the Securities and Exchange Commission (which reports and documents should be read in conjunction with this press release). We believe that all forward-looking statements are based upon reasonable assumptions when made; however, we caution that it is impossible to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes and that, accordingly, you should not place undue reliance on these statements. Forward-looking statements speak only as of the date when made, and we undertake no obligation to update these statements in light of subsequent events or developments. Actual results and outcomes may differ materially from anticipated results or outcomes discussed in forward-looking statements.