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Christopher & Banks Corporation (CBKC) CEO Keri Jones on Q4 2019 Results - Earnings Call Transcript

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Christopher & Banks Corporation (CBKC) Q4 2019 Earnings Conference Call March 10, 2020 8:30 AM ET

Company Participants

Jean Fontana - IR, ICR, Inc.

Keri Jones - President & CEO

Richard Bundy - SVP & CFO

Conference Call Participants

Eric Beder - Small Cap Consumer Research, LLC


Greetings and welcome to the Christopher & Banks Corporation Fourth Quarter and Full-Year Fiscal 2019 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Jean Fontana of ICR. Please go ahead.

Jean Fontana

Thank you. Thank you for joining us for the Christopher & Banks fourth quarter and full-year fiscal 2019 earnings conference call. Presenting on today's call will be Keri Jones, President and Chief Executive Officer; and Richard Bundy, Chief Financial Officer. This morning's conference call is in conjunction with the earnings release that the company issued this morning.

During our call today, we will reference certain non-GAAP financial measures including adjusted items, reconciliations of GAAP to non-GAAP measures, as well as the descriptions, limitations, and rationale for each measure which can be found in the press release including in supplemental financial tables. Today's earnings release and conference call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements address the company's expectations regarding its future performance, including but not limited to the financial conditions, results of operations, business initiatives, growth plans and prospects, and are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Please refer to today's earning's release or the company's SEC filings for more information on these risks and uncertainties. The company undertakes no obligation to update or revise any forward-looking statements to reflect

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Comments (12)

BeCall profile picture
CBK has filed 8-K regarding $10M forgivable loan on June 3 (yesterday). This is essentially a grant with no interest payments until the Fall and then only 1%, and eventually highly likely to be forgivable as stated in 8-K.

Check out the 8-K at:
BeCall profile picture
PS this is likely relevant - page 49 footnote 2 of recent Schedule 14A released May 5 - note 60-day period ending June 20 - huge amounts of exercisable stock options for Keri Jones (CEO) and Luke Komarek (who is RECENTLY RETIRED General Counsel and been there for 13 years) This seems very odd, but perhaps is being rewarded for putting together the deal:

(2) The amounts listed include the following number of shares of Common Stock for which the directors and executive officers have the right to acquire beneficial ownership within 60 days from April 20, 2020, through the exercise of stock options: Ms. Jones, 740,699; Mr. Bundy, 55,253, Ms. Kellick, 30,000, Mr. Komarek, 282,043; Ms. Wamre, 63,334; and all directors, director nominees and executive officers as a group, 1,196,329.
BeCall profile picture
Been hearing rumors, so did some digging - just found this 88c per share buyout possibility:

Monocle Accounting Research profile picture
No. I'm fairly certain you have not been hearing rumors. I'm also fairly certain that your "digging" didn't lead you to that Singapore Star "article."

I'm curious - what kind of digging did you do, exactly, that led you to that article? Because when I type in "Ulla Popken" and "Christopher & Banks" into various search engines, including Google, Yahoo and Bing, this article doesn't appear. You see, "Singapore Star" is one of these suspicious online news aggregators that allows anyone (such as someone who owns shares of a company that is about to go under for good) to pay a mere $10.95 to plant their own story:


Dubai-based Big News Network FZ LLC owns Singapore Star as well as countless other quasi-legitimate sounding online news sites. For example, there is the Buffalo Breeze:


...the Oklahoma Star:


...and the Cincinnati Sun:


The list goes on. See www.bignewsnetwork.net/... for a complete list.

Now, I'm not accusing you, BeCall (a/k/a "Bruce" on Yahoo! Finance), of engaging in attempted stock price manipulation (which is illegal) by planting this bogus story and then spreading the "discovery" of it on multiple forums. I will however be alerting SeekingAlpha to your posts, and I will let them decide if they want to do anything with this information.

BeCall profile picture
What you say about Singapore Star may be true - I have no idea. But I can assure you I had nothing to do with the article, so I'm not at all worried about your extreme reaction. Nor am I worried about SA taking action, because what is posted on these discussion boards can get pretty crazy - it's not exactly well-regulated as I'm sure you know.

I've been on the record for quite some time that I think CB is going to get acquired, because they were righting the ship before CV-19 and have a very good management team in place servicing an underserved customer, but also for their omnichannel and digital marketing expertise. There are so many retailers that are far behind the curve on these capabilities and need to acquire this expertise and infrastructure to catch up and survive - especially now with CV-19. It is a much larger number of retailers than most people realize who need these capabilities, and many are bigger than CB and still reasonably healthy and know they have to take action. I thought that 6-9 months ago, and posted as such, and I still think that today. more or less.

The real reality is that we disagree about this stock and can learn from one another if each of us has an open mind - that's why we're here. I read counter-arguments with great interest and I appreciate SA for giving me that opportunity.

That's all I've got to say about your concern - I won't be commenting any further.
Monocle Accounting Research profile picture
The question remains though BeCall/Bruce - how exactly did you "just [find]" that article? You also said that you'd been hearing rumors. We actually know Christopher & Banks extremely well and have many industry contacts, and we have not heard any rumors whatsoever about anybody willing to provide shareholders with a massive premium in this environment. So, from where or whom did you hear these rumors?

Monocle Accounting Research profile picture
It is very apparent that Christopher & Banks will not survive going forward. Equity holders need to be prepared for their remaining investments to be completed wiped out in the near-term should they choose to hold on. Christopher & Banks have amended hours, but they will need to follow others soon and shut all of their stores for an extended period of time. Quite frankly, considering they cater to older women, it would be highly irresponsible to do otherwise. The current deep recession in which we find ourselves will eliminate most if not all marginal retailers such as Christopher & Banks.
BeCall profile picture
I agree with you that their go forward path has been severely compromised, for 2020 at least. But I believe it will result in the sale of the company, in the next few weeks/months. They have a lot to offer the garden-variety fashion retailer - seasoned and highly integrated management team (ex-Target for several), omnichannel well-implemented (this was Keri's job at Target), integrated ecommerce, mobile, and digital marketing with strong seasonal fashion management, etc. It's a $350M+ business that was on the cusp of profitability before CV-19 - it has value to acquirers. Now the price of acquisition in this market of a company that at end 2019 was still not quite profitable - I believe there is really no way to predict.
Their response to CV is non existent. There have been no e-mails to customers letting them know what they are doing to keep them and store associates safe. There is nothing on the website, their idea of dealing with this is to demand stores cut their pay roll and only have one manager on duty with limited help. Even then they wouldn't admit that it is because of CV. They held a Spring Style Show this weekend, knowing the risks of large crowds in places and are still going forward with Friends and Family Event in April. If this pandemic gets worse, and it will before it gets better, it will come back on them. They will suffer a shortage in inventory, and loss of foot traffic in stores will add to the loss of revenue. If mall management starts limiting business hours that will hurt too. They are not doing themselves any favors by ignoring this. But that seems to be a pattern with this company.
Wildstar profile picture
I've been into CBK for a few years. What worries me about the CC is how they continually made a point of saying how their projections did not take the CV epidemic into account. They were very careful to tiptoe around and not downward revise their projections. I think that will be a mistake. I believe they will suffer some supply chain issues which will hit them in the next quarters. I think they will lose credibility by not getting in front of it now.
Seems mostly positive, but market doesn't seem to be too excited about it. Honestly the reaction might have been different if not for the craziness lately. Let us see how this plays out in the long run
BeCall profile picture
I agree... everyone is afraid CV is going to take the economy down, so not much else is gaining traction. Overall, this company is steadily marching to stable profitability and smart, intentional expansion. I am long.
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