SAN FRANCISCO - April 25, 2013 // PRNewswire // - The Gymboree Corporation (the "Company") today reported consolidated financial results for the fourth fiscal quarter and the fiscal year ended February 2, 2013 ("fiscal 2012").
Net sales for the 14 weeks ended February 2, 2013 were $397.6 million, an increase of 11.7% compared to $355.8 million in net sales for the 13 weeks ended January 28, 2012. Comparable sales for the fourth quarter of fiscal 2012, decreased 2% compared to the fourth quarter of fiscal 2011. Given the additional week included in the fiscal fourth quarter, the comparable period has been adjusted to reflect a similar 14 week period.
Gross profit for the fourth quarter of fiscal 2012 was $144.8 million, or 36.4% of net sales, compared to $126.2 million, or 35.5% of net sales, for the fourth quarter of fiscal 2011. Excluding purchase accounting adjustments of $2.6 million and $3.1 million for the fourth quarter of fiscal 2012 and the fourth quarter of fiscal 2011, respectively, relating to the November 2010 acquisition of the Company by investment funds sponsored by Bain Capital Partners, LLC (the "Acquisition"), adjusted gross profit was $147.4 million, or 37.1% of net sales, and $129.3 million, or 36.3% of net sales, for the fourth quarter of fiscal 2012 and the fourth quarter of fiscal 2011, respectively (see Exhibit D for relevant reconciliation information).
SG&A expense for the fourth quarter of fiscal 2012 was $125.4 million, or 31.5% of net sales, compared to $107.2 million, or 30.1% of net sales, in the fourth quarter of the prior year. Results for the fourth quarter of fiscal 2012 and fiscal 2011 include $12.9 million and $6.2 million, respectively, of additional costs resulting from the Acquisition, including the effect of purchase accounting adjustments and non-recurring adjustments. Excluding these charges, adjusted SG&A expense for the fourth quarter of fiscal 2012 and fiscal 2011 was $112.5 million, or 28.3% of net sales, and $101.0 million, or 28.4% of net sales, respectively, which represents a decrease of 10 basis points over fiscal 2011 (see Exhibit D for relevant reconciliation information).
Net loss attributable to The Gymboree Corporation before interest (income) expense, income tax benefit and depreciation and amortization, adjusted for other items ("Adjusted EBITDA"), for the fourth quarter of fiscal 2012 increased 1.1% to $47.7 million compared to $47.2 million for the fourth quarter of the prior year. Adjusted EBITDA is not a performance measure under U.S. generally accepted accounting principles ("GAAP"). See "Non-GAAP Financial Measures" below. A reconciliation of net income/(loss) attributable to The Gymboree Corporation to Adjusted EBITDA presented herein is included in Exhibit D of this press release.
Net sales for the 53 weeks ended February 2, 2013 were $1.28 billion, an increase of 7.4% compared to $1.19 billion in net sales for the 52 weeks ended January 28, 2012. Comparable sales for fiscal 2012 decreased 2% compared to fiscal 2011.
Gross profit for fiscal year 2012 was $481.4 million, or 37.7% of net sales, compared to $459.9 million, or 38.7% of net sales, for fiscal 2011. Excluding purchase accounting adjustments of $11.7 million and $24.0 million in fiscal 2012 and fiscal 2011, respectively, adjusted gross profit was $493.1 million, or 38.7% of net sales, and $483.9 million, or 40.7% of net sales, for fiscal 2012 and fiscal 2011, respectively (see Exhibit D for relevant reconciliation information).
SG&A expense for fiscal 2012 was $411.7 million, or 32.3% of net sales, compared to $380.1 million, or 32.0% of net sales, in the prior year. Results for fiscal 2012 and fiscal 2011 include $28.6 million and $30.3 million, respectively, of additional costs resulting from the Acquisition, including the effect of purchase accounting adjustments and non-recurring adjustments. Excluding these charges, adjusted SG&A expense for fiscal 2012 and fiscal 2011 was $383.1 million, or 30.0% of net sales, and $349.8 million, or 29.4% of net sales, respectively, which represents an increase of 60 basis points over fiscal 2011 (see Exhibit D for relevant reconciliation information).
Adjusted EBITDA for fiscal 2012 decreased 16.0% to $161.8 million, compared to $192.6 million for the prior year (see "Non-GAAP Financial Measures" included in Exhibit D of this press release).
There were no borrowings outstanding under the Company's $225 million asset-backed loan facility at the end of the fourth quarter of fiscal 2012 and approximately $167.2 million of undrawn availability.
Cash at the end of fiscal 2012 decreased to $33.3 million from $77.9 million at the end of fiscal 2011. During fiscal 2012, the Company reduced its outstanding debt by approximately $71.4 million.
Inventory balances at the end of fiscal 2012 were $197.9 million compared to $210.2 million at the end of fiscal 2011. Inventory cost on a per square foot basis was down 15% and inventory units on a per square foot basis were also down in the mid-single digits.
In fiscal 2013, the Company is focused on improving its inventory discipline, strengthening its product assortment and continuing to drive its growth opportunities of real estate, ecommerce and international. The Company's fiscal 2013 outlook is based on the current economic environment and trends, as well as its expectations for the balance of the year.
The Company anticipates Adjusted EBITDA for the first quarter to be in the range of $30 million to $35 million. This expectation reflects a comparable sales decline of 7% quarter to date with an improvement in trend in April. The Company expects inventory cost on a per square foot basis at quarter end to be down mid-teens versus the prior year quarter and units per square foot to be down in the mid-single digits.
For the full year, the Company expects Adjusted EBITDA to grow modestly over last year and comparable sales to be flat to slightly positive. Based on this guidance, the Company expects to generate sufficient cash flow to service its debt and invest in the business to drive long term growth.
During fiscal 2013, the Company plans to open approximately 100 new stores, with the majority being Crazy 8 stores.
During fiscal 2013, the Company anticipates spending approximately $50 million for capital expenditures.
The Company defines "Adjusted EBITDA" as net income (loss) attributable to The Gymboree Corporation before interest (income) expense, income tax expense (benefit), and depreciation and amortization ("EBITDA") adjusted for other items including (gain) or loss on extinguishment of debt, non-cash share-based compensation, loss on disposal/impairment of assets and sponsor management fees and expenses, as well as the impact of purchase accounting adjustments resulting from the Acquisition and other non-recurring or unusual items.
Adjusted EBITDA is a non-GAAP measure but is considered an important supplemental measure of the Company's performance and is believed to be used frequently by securities analysts, investors and other interested parties in the evaluation of similar retail companies. Adjusted EBITDA is not a presentation made in accordance with GAAP and the Company's computation of Adjusted EBITDA may vary from others in the industry. Adjusted EBITDA should not be considered an alternative to operating income or net income, as a measure of operating performance or cash flow, or as a measure of liquidity. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP. See Exhibit D for a reconciliation of Adjusted EBITDA to net income/(loss).
The live broadcast of the discussion of fourth quarter and fiscal 2012 financial results and fiscal 2013 business outlook will be available to interested parties at 1:00 p.m. PT (4:00 p.m. ET) on Thursday, April 25, 2013. To listen to the live broadcast over the internet, please log on to www.gymboree.com, click on "Company Information" at the bottom of the page, go to "Investor & Media" and then "Conference Calls & Webcasts." A replay of the call will be available two hours after the broadcast through midnight PT, Thursday, May 9, 2013, at 855-859-2056, passcode 31845978.
The Gymboree Corporation's specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of February 2, 2013, the Company operated a total of 1,262 retail stores: 637 Gymboree® stores (588 in the United States, 42 in Canada, 1 in Puerto Rico and 6 in Australia), 160 Gymboree Outlet stores (158 in the United States and 2 in Puerto Rico), 133 Janie and Jack® shops and 332 Crazy 8® stores in the United States. The Company also operates online stores at www.gymboree.com, www.janieandjack.com and www.crazy8.com, and offers directed parent-child developmental play programs at 718 franchised and Company-operated Gymboree Play & Music® centers in the United States and 42 other countries.
The foregoing financial information for the fourth fiscal quarter and the fiscal year ended February 2, 2013 is unaudited and subject to quarter-end and year-end adjustments. The foregoing paragraphs contain forward-looking statements relating to The Gymboree Corporation's anticipated future financial performance,such as those relating to its comparable store sales growth, Adjusted EBITDA, capital expenditures, cash flows and new store openings in fiscal 2013. Actual results could vary materially as a result of a number of factors, including the ongoing volatility in the commodities market for cotton, uncertainties relating to high levels of unemployment and consumer debt, volatility in the financial markets, general economic conditions, the Company's ability to anticipate and timely respond to changes in trends and consumer preferences and customer reactions to new merchandise, service levels and new concepts, competitive market conditions, success in meeting the Company's delivery targets, the Company's promotional activity, gross margin achievement, the Company's ability to appropriately manage inventory, effects of future embargos from countries used to source product, the Company's ability to attract and retain key personnel and other qualified team members, and other factors, including those discussed under "Risk Factors" in "Item 1A, Risk Factors," of the Company's Annual Report on Form 10-K for the fiscal year ended January 28, 2012, filed with the Securities and Exchange Commission ("SEC") on April 26, 2012, and its subsequent SEC filings. The forward-looking statements contained in this press release reflect the Company's expectations as of the date hereof,and the inclusion of a projection or forward-looking statement in this press release should not be regarded as a representation by the Company that its plans or objectives will be achieved. The Company undertakes no obligation to update the information provided herein.
Gymboree, Janie and Jack, Crazy 8, and Gymboree Play & Music are registered trademarks of The Gymboree Corporation.
SOURCE The Gymboree Corporation
The Gymboree Corporation is a family of specialty retail brands that provide unique, high-quality products. All of our brands have an important thing in common: a concentrated focus on pleasing every customer.