The Gymboree Corporation Reports Second Fiscal Quarter 2014 Results; Comparable Sales are Positive for August

SAN FRANCISCO - Sept. 10, 2014 // PRNewswire // - The Gymboree Corporation (the "Company") today reported consolidated financial results for the second fiscal quarter ended August 2, 2014.

"Despite a difficult second quarter, we continued to make progress on our key initiatives in product, inventory and execution," said Mark Breitbard, Chief Executive Officer. "We are seeing a meaningful improvement in trend at the start of the third quarter with positive comparable store sales across each of our brands in August. In addition, we are well on our way to achieve our annual efficiency and cost savings goals. Based on the progress we have made, we remain confident that we have the right action plans in place and the balance sheet strength to stabilize our sales trend and return our Company to consistent, long-term profitable growth."

Second Fiscal Quarter Results (13 weeks ended August 2, 2014 versus 13 weeks ended August 3, 2013)

  • Net sales were $264.3 million, compared to $290.9 million in the second quarter of fiscal 2013.
  • Comparable store sales (including online stores) declined 10%.
  • Gross profit was $96.4 million, or 36.5% of net sales, compared to $107.1 million, or 36.8% of net sales, for the second quarter of fiscal 2013.
  • Adjusted gross profit was $98.2 million, or 37.1% of net sales, compared to $109.6 million, or 37.7% of net sales, for the second quarter of fiscal 2013. The decline in gross profit margin reflects the deleverage of fixed costs on lower sales partially offset by an increase in average unit retail prices. Adjusted gross profit excludes purchase accounting adjustments of $1.8 million and $2.5 million for the second quarter of fiscal 2014 and the second quarter of fiscal 2013, respectively, relating to the November 2010 acquisition of the Company by investment funds advised by Bain Capital Partners, LLC (the "Acquisition") (see Exhibit D for definition and reconciliation information).
  • SG&A expense was $107.1 million, or 40.5% of net sales, compared to $102.0 million, or 35.1% of net sales, for the second quarter of fiscal 2013.
  • Adjusted SG&A expense was $104.9 million, or 39.7% of net sales, compared to $98.7 million, or 33.9% of net sales, in the second quarter of fiscal 2013. Adjusted SG&A in the second quarter of fiscal 2014 and 2013 excludes $2.3 million and $3.3 million, respectively, of additional costs resulting from the Acquisition, including the effect of purchase accounting adjustments and non-recurring adjustments (see Exhibit D for definition and reconciliation information).
  • Net loss attributable to The Gymboree Corporation was $31.2 million compared to $9.4 million for the second quarter of fiscal 2013.
  • Adjusted EBITDA, defined as net loss attributable to The Gymboree Corporation before interest income/expense, income taxes and depreciation and amortization, adjusted for other items described above, was $9.6 million compared to $24.8 million for the second quarter of fiscal 2013.
  • Adjusted EBITDA is not a financial measure under U.S. generally accepted accounting principles ("GAAP"). For a description of these measures, see "Non-GAAP Financial Measures" below. A reconciliation of net loss attributable to The Gymboree Corporation to Adjusted EBITDA presented herein is included in Exhibit D of this press release.

Balance Sheet Highlights

  • There were $64.0 million in borrowings outstanding under the Company's $225 million asset-backed loan facility and approximately $95.5 million of undrawn availability after deducting letters of credit and outstanding borrowings at the end of the second quarter of fiscal 2014.
  • Cash balances were at $24.9 million at the end of the second quarter of fiscal 2014, a decrease of $14.6 million from $39.4 million at the end of fiscal 2013.
  • Capital expenditures were $7.2 million during the second quarter of fiscal 2014.
  • Inventory balances at the end of the second quarter of fiscal 2014 were $223.7 million, compared to$215.0 million at the end of the second quarter of fiscal 2013. On a per square foot basis, inventory cost increased 1% and inventory units declined in the low single digits.

Fiscal 2014 Business Outlook

The Company's fiscal 2014 outlook is based on the Company's first half performance, current economic environment trends, and management expectations for the remainder of the year.

Full Year

For the full year, the Company expects Adjusted EBITDA in the range of $90 million to $110 million. Based on this guidance, the Company expects to have sufficient liquidity during fiscal 2014 to service its debt and invest in the business to drive long-term growth.

New Stores

The Company now plans to close approximately 30 to 40 stores and still expects to open approximately 50 new stores during fiscal 2014, distributed fairly evenly across the brands.

Capital Expenditures

During fiscal 2014, the Company still anticipates spending approximately $35 million to $40 million for capital expenditures.

Non-GAAP Financial Measures

The Company defines "Adjusted EBITDA" as net loss attributable to The Gymboree Corporation before interest income/expense, income taxes, and depreciation and amortization ("EBITDA") adjusted for other items including 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 operating 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 loss attributable to The Gymboree Corporation).

Management Presentation

The live broadcast of the discussion of second fiscal quarter 2014 financial results and business outlook will be available to interested parties at 1:00 p.m. PT (4:00 p.m. ET) on Wednesday, September 10, 2014. 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 "Investors & Media" and then "Conference Calls & Webcasts." A replay of the call will be available two hours after the broadcast through midnight PT, Wednesday, September 17, 2014, at 855-859-2056, passcode 84323970.

About The Gymboree Corporation

The Gymboree Corporation's specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of August 2, 2014, the Company operated a total of 1,344 retail stores: 625 Gymboree® stores (572 in the United States, 46 in Canada, 1 in Puerto Rico and 6 in Australia), 171 Gymboree Outlet stores (169 in the United States and 2 in Puerto Rico), 148 Janie and Jack® shops and 400 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 699 franchised and Company-operated Gymboree Play & Music® centers in the United States and 41 other countries.

Forward-Looking Statements

The foregoing financial information for the second quarter of fiscal 2014 is unaudited and subject to quarter-end and year-end adjustments. This press release includes forward-looking statements, including statements relating to The Gymboree Corporation's anticipated future financial performance, especially those set forth under the heading "Fiscal 2014 Business Outlook" and the Company's expectation that it will be able to stabilize its sales trend and return to consistent, long- term profitable growth. These forward-looking statements generally can be identified by the use of words such as "anticipate," "expect," "plan," "could," "may," "will," "believe," "estimate," "forecast," "goal," "project," and other words of similar meaning. Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. The Company presently considers the following risks and uncertainties to be important factors that could cause actual results to differ materially from the Company's expectations: the ongoing volatility in the commodities markets, uncertainties relating to high levels of unemployment and consumer debt, volatility in the financial markets, general economic conditions, the Company's dependence on the holiday season in November and December to sell a significant portion of its existing inventory, the Company's ability to anticipate and timely respond to changes in trends, consumer preferences and customer reactions to new merchandise and concepts, competitive market conditions, success in meeting the Company's delivery targets, the Company's promotional activity, particularly during the holiday season, that may be required to sell existing inventory, 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, the limited data available in the future upon which to base its expectations for stabilizing sales trends, 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 February 1, 2014, filed with the Securities and Exchange Commission ("SEC") on May 2, 2014. The Company cautions investors to carefully consider the risks associated with, and not to place considerable reliance on, the forward-looking statements contained in this press release. The forward-looking statements in this press release speak only as of the date of this document, and the Company undertakes no obligation to update or revise any of these statements.

Gymboree, Janie and Jack, Crazy 8, and Gymboree Play & Music are registered trademarks of The Gymboree Corporation.

EXHIBIT A

             

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)

                   
     

13 Weeks Ended

 

26 Weeks Ended

     

August 2, 2014

    

August 3, 2013

    

August 2, 2014

    

August 3, 2013

Net sales:

             
 

Retail

$         253,376

 

$         278,944

 

$         512,500

 

$         559,821

 

Gymboree Play & Music 

7,319

 

6,260

 

14,151

 

12,588

 

Retail Franchise

3,608

 

5,712

 

9,662

 

11,290

   

Total net sales

264,303

 

290,916

 

536,313

 

583,699

 

Cost of goods sold, including buying and occupancy expenses

(167,939)

 

(183,830)

 

(331,591)

 

(355,640)

   

Gross profit

96,364

 

107,086

 

204,722

 

228,059

 

Selling, general and administrative expenses

(107,140)

 

(102,023)

 

(209,430)

 

(206,152)

   

Operating (loss) income

(10,776)

 

5,063

 

(4,708)

 

21,907

 

Interest income

68

 

61

 

115

 

102

 

Interest expense

(20,455)

 

(20,467)

 

(40,829)

 

(40,869)

 

Other income (expense), net

(134)

 

(111)

 

(502)

 

(102)

   

Loss before income taxes

(31,297)

 

(15,454)

 

(45,924)

 

(18,962)

 

Income tax (expense) benefit

(1,556)

 

6,129

 

(1,932)

 

6,789

   

Net loss

(32,853)

 

(9,325)

 

(47,856)

 

(12,173)

   

Net loss (income) attributable to noncontrolling interest

1,700

 

(25)

 

3,272

 

287

   

Net loss attributable to The Gymboree Corporation

$         (31,153)

 

$           (9,350)

 

$         (44,584)

 

$         (11,886)

 

EXHIBIT B

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

             
   

August 2,

    

February 1,

    

August 3,

   

2014

 

2014

 

2013

ASSETS

         

Current assets:

         
 

Cash and cash equivalents

$       24,879

 

$       39,429

 

$       26,831

 

Accounts receivable

21,129

 

21,882

 

26,916

 

Merchandise inventories

223,694

 

175,495

 

214,981

 

Prepaid income taxes

3,076

 

1,979

 

4,037

 

Prepaid expenses

19,684

 

18,801

 

18,081

 

Deferred income taxes

8,172

 

13,454

 

36,378

 

    Total current assets

300,634

 

271,040

 

327,224

             

Property and equipment, net

196,667

 

206,308

 

206,460

Goodwill

758,777

 

758,777

 

898,983

Other intangible assets, net

558,210

 

559,824

 

577,782

Deferred financing costs

29,091

 

32,455

 

36,819

Other assets

9,835

 

11,700

 

8,293

             
 

    Total assets

$  1,853,214

 

$  1,840,104

 

$  2,055,561

             
             

LIABILITIES AND STOCKHOLDERS' EQUITY

         

Current liabilities:

         
 

Accounts payable

$     112,638

 

$     101,959

 

$     100,794

 

Accrued liabilities

86,231

 

100,303

 

93,947

 

Line of credit

64,000

 

-

 

-

 

Current obligation under capital lease

527

 

503

 

-

 

    Total current liabilities

263,396

 

202,765

 

194,741

             

Long-term liabilities:

         
 

Long-term debt

1,113,893

 

1,113,742

 

1,138,595

 

Long-term obligation under capital lease

3,133

 

3,402

 

-

 

Lease incentives and other liabilities

52,664

 

50,432

 

45,529

 

Unrecognized tax benefits

6,475

 

6,157

 

8,894

 

Deferred income taxes

209,220

 

214,464

 

229,548

 

    Total liabilities

1,648,781

 

1,590,962

 

1,617,307

             

Stockholders' equity

204,433

 

249,142

 

438,254

             
 

Total liabilities and stockholders' equity

$  1,853,214

 

$  1,840,104

 

$  2,055,561

 

EXHIBIT C

     

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

         
   

26 Weeks Ended

   

August 2, 2014

    

August 3, 2013

CASH FLOWS FROM OPERATING ACTIVITIES:

     

Net loss

$           (47,856)

 

$           (12,173)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

     
 

Depreciation and amortization

22,534

 

23,684

 

Amortization of deferred financing costs and accretion of original issue discount

3,515

 

3,362

 

Interest rate cap contracts - adjustment to market

932

 

432

 

Loss on disposal/impairment of assets

3,883

 

1,949

 

Deferred income taxes

36

 

(9,498)

 

Share-based compensation expense

2,269

 

2,974

 

Other

21

 

-

 

Change in assets and liabilities:

     

            Accounts receivable

739

 

645

            Merchandise inventories

(48,576)

 

(16,803)

            Prepaid income taxes

(1,095)

 

(1,166)

            Prepaid expenses and other assets

(174)

 

(1,083)

            Accounts payable

10,673

 

10,661

            Accrued liabilities

(12,822)

 

(456)

            Lease incentives and other liabilities

3,472

 

8,062

 

Net cash (used in) provided by operating activities

(62,449)

 

10,590

         

CASH FLOWS FROM INVESTING ACTIVITIES:

     

Capital expenditures

(16,523)

 

(23,228)

Other

(66)

 

(162)

 

Net cash used in investing activities

(16,589)

 

(23,390)

         

CASH FLOWS FROM FINANCING ACTIVITIES:

     

Proceeds from ABL facility

218,000

 

-

Payments on ABL facility

(154,000)

 

-

Payments on capital lease

(246)

 

-

Dividend payment to Parent

-

 

(201)

Capital contribution received by noncontrolling interest

992

 

6,506

 

Net cash provided by financing activities

64,746

 

6,305

Effect of exchange rate fluctuations on cash and cash equivalents

(258)

 

(2)

Net decrease in cash and cash equivalents

(14,550)

 

(6,497)

CASH AND CASH EQUIVALENTS:

     

Beginning of period

39,429

 

33,328

End of period

$            24,879

 

$            26,831

 

EXHIBIT D

             

THE GYMBOREE CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands)

(Unaudited)

               

ADJUSTED EBITDA:

             

The Company defines "Adjusted EBITDA" as net income (loss) attributable to The Gymboree Corporation before interest expense, interest income, income tax expense/benefit, and depreciation and amortization ("EBITDA") adjusted for other items, including non-cash share-based compensation, loss on disposal/impairment of assets, sponsor management fees and expenses, as well as the impact of purchase accounting adjustments resulting from the acquisition of the Company by investment funds sponsored by Bain Capital Partners, LLC (the "Acquisition"), non-recurring and unusual items. 

Adjusted EBITDA is not a performance measure under U.S. generally accepted accounting principles ("GAAP"), 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. 

The table below provides a reconciliation of net loss attributable to The Gymboree Corporation to Adjusted EBITDA:

               
 

13 Weeks Ended

 

26 Weeks Ended

 

August 2, 2014

 

August 3, 2013

 

August 2, 2014

 

August 3, 2013

               

Net loss attributable to The Gymboree Corporation

$           (31,153)

 

$             (9,350)

 

$           (44,584)

 

$           (11,886)

Reconciling items (a):

             

Interest expense 

20,455

 

20,467

 

40,829

 

40,869

Interest income 

(14)

 

(47)

 

(66)

 

(73)

Income tax expense (benefit)

791

 

(5,854)

 

1,390

 

(6,715)

Depreciation and amortization (b)

11,018

 

10,662

 

21,804

 

23,282

Non-cash share-based compensation expense 

993

 

1,477

 

2,269

 

2,974

Loss on disposal/impairment on assets

3,525

 

1,571

 

3,855

 

1,871

Acquisition-related adjustments (c)

2,963

 

3,899

 

5,907

 

7,992

Other (d)

983

 

1,974

 

188

 

2,463

Adjusted EBITDA

$              9,561

 

$            24,799

 

$            31,592

 

$            60,777

               

(a) Excludes amounts related to noncontrolling interest, which are already excluded from net loss attributable to The Gymboree Corporation.

           
               

(b) Includes the following:

             

Amortization of intangible assets (impacts SG&A)

$                 383

 

$                 384

 

$                 767

 

$              2,642

Amortization of below and above market leases (impacts COGS)

(240)

 

(376)

 

(487)

 

(762)

 

$                 143

 

$                     8

 

$                 280

 

$              1,880

               

(c) Includes the following:

             

Additional rent expense recognized due to the elimination of deferred rent and construction allowances in purchase accounting (impacts COGS)

$              2,063

 

$              2,226

 

$              4,131

 

$              4,458

Sponsor fees, legal and accounting, as well as other costs incurred as a result of the Acquisition or refinancing (impacts SG&A)

900

 

975

 

1,776

 

2,095

Decrease in net sales due to the elimination of deferred revenue related to the Company's co-branded credit card program in purchase accounting (impacts net sales)

-

 

698

 

-

 

1,439

 

$              2,963

 

$              3,899

 

$              5,907

 

$              7,992

               

(d) Other is comprised of a non-recurring change in reserves, restructuring charges, and executive-related hiring expenses.

           
               

OTHER NON-GAAP FINANCIAL MEASURES:

             
               
 

13 Weeks Ended

 

26 Weeks Ended

 

August 2, 2014

 

August 3, 2013

 

August 2, 2014

 

August 3, 2013

               

Gross profit as reported

$            96,364

 

$          107,086

 

$          204,722

 

$          228,059

Acquisition-related adjustments

1,823

 

2,548

 

3,644

 

5,135

Adjusted gross profit excluding Acquisition-related adjustments (non-GAAP measure)

$            98,187

 

$          109,634

 

$          208,366

 

$          233,194

               
               
 

13 Weeks Ended

 

26 Weeks Ended

 

August 2, 2014

 

August 2, 2014

 

August 2, 2014

 

August 2, 2014

               

SG&A as reported

$         (107,140)

 

$         (102,023)

 

$         (209,430)

 

$         (206,152)

Acquisition-related adjustments

1,283

 

1,359

 

2,543

 

4,737

Other adjustments

983

 

1,974

 

188

 

2,463

 

2,266

 

3,333

 

2,731

 

7,200

Adjusted SG&A excluding Acquisition-related and other adjustments (non-GAAP measure)

$         (104,874)

 

$           (98,690)

 

$         (206,699)

 

$         (198,952)

 

EXHIBIT E

             

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)

                 
   

For the 13 Weeks Ended August 2, 2014

   

Balance Before 

           
   

Consolidation of VIEs

    

VIEs*

    

Eliminations

    

As Reported

Net sales

$                      259,392

 

$    6,246

 

$        (1,335)

 

$     264,303

Cost of goods sold, including buying and occupancy expenses

(166,259)

 

(2,011)

 

331

 

(167,939)

 

Gross profit

93,133

 

4,235

 

(1,004)

 

96,364

Selling, general and administrative expenses

(102,881)

 

(5,241)

 

982

 

(107,140)

 

Operating loss

(9,748)

 

(1,006)

 

(22)

 

(10,776)

Other non operating (expense) income

(20,592)

 

71

 

-

 

(20,521)

 

Loss before income taxes

(30,340)

 

(935)

 

(22)

 

(31,297)

Income tax expense

(791)

 

(765)

 

-

 

(1,556)

 

Net loss

(31,131)

 

(1,700)

 

(22)

 

(32,853)

 

Net loss attributable to noncontrolling interest

-

 

1,700

 

-

 

1,700

 

Net loss attributable to The Gymboree Corporation

$                       (31,131)

 

$          -

 

$             (22)

 

$      (31,153)

                 
                 
   

For the 13 Weeks Ended August 3, 2013

   

Balance Before 

           
   

Consolidation of VIEs

 

VIEs*

 

Eliminations

 

As Reported

Net sales

$                      287,145

 

$    4,998

 

$        (1,227)

 

$     290,916

Cost of goods sold, including buying and occupancy expenses

(182,693)

 

(1,341)

 

204

 

(183,830)

 

Gross profit

104,452

 

3,657

 

(1,023)

 

107,086

Selling, general and administrative expenses

(99,131)

 

(3,930)

 

1,038

 

(102,023)

 

Operating income (loss)

5,321

 

(273)

 

15

 

5,063

Other non operating (expense) income

(20,540)

 

23

 

-

 

(20,517)

 

Loss before income taxes

(15,219)

 

(250)

 

15

 

(15,454)

Income tax benefit

5,854

 

275

 

-

 

6,129

 

Net (loss) income

(9,365)

 

25

 

15

 

(9,325)

 

Net income attributable to noncontrolling interest

-

 

(25)

 

-

 

(25)

 

Net loss attributable to The Gymboree Corporation

$                         (9,365)

 

$          -

 

$              15

 

$        (9,350)

                 
                 
   

For the 26 Weeks Ended August 2, 2014

   

Balance Before 

           
   

 Consolidation of VIEs

 

VIEs*

 

Eliminations

 

As Reported

Net sales

$                      528,536

 

$  11,650

 

$        (3,873)

 

$     536,313

Cost of goods sold, including buying and occupancy expenses

(328,697)

 

(3,313)

 

419

 

(331,591)

 

Gross profit

199,839

 

8,337

 

(3,454)

 

204,722

Selling, general and administrative expenses

(201,841)

 

(11,034)

 

3,445

 

(209,430)

 

Operating loss

(2,002)

 

(2,697)

 

(9)

 

(4,708)

Other non operating expense

(41,183)

 

(33)

 

-

 

(41,216)

 

Loss before income taxes

(43,185)

 

(2,730)

 

(9)

 

(45,924)

Income tax expense

(1,390)

 

(542)

 

-

 

(1,932)

 

Net loss

(44,575)

 

(3,272)

 

(9)

 

(47,856)

Net loss attributable to noncontrolling interest

-

 

3,272

 

-

 

3,272

 

Net loss attributable to The Gymboree Corporation

$                       (44,575)

 

$          -

 

$               (9)

 

$      (44,584)

                 
                 
   

For the 26 Weeks Ended August 3, 2013

   

Balance Before 

           
   

 Consolidation of VIEs

 

VIEs*

 

Eliminations

 

As Reported

Net sales

$                       576,625

 

$    9,632

 

$        (2,558)

 

$     583,699

Cost of goods sold, including buying and occupancy expenses

(353,475)

 

(2,571)

 

406

 

(355,640)

 

Gross profit

223,150

 

7,061

 

(2,152)

 

228,059

Selling, general and administrative expenses

(200,762)

 

(7,576)

 

2,186

 

(206,152)

 

Operating income (loss)

22,388

 

(515)

 

34

 

21,907

Other non operating (expense) income, net

(41,023)

 

154

 

-

 

(40,869)

 

Loss before income taxes

(18,635)

 

(361)

 

34

 

(18,962)

Income tax benefit

6,715

 

74

 

-

 

6,789

 

Net loss

(11,920)

 

(287)

 

34

 

(12,173)

Net loss attributable to noncontrolling interest

-

 

287

 

-

 

287

 

Net loss attributable to The Gymboree Corporation

$                       (11,920)

 

$          -

 

$              34

 

$      (11,886)

 

EXHIBIT E (continued)

             

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING BALANCE SHEETS

(In thousands)

(Unaudited)

   

August 2, 2014

   

Balance Before 

           
   

Consolidation of VIEs

    

VIEs*

    

Eliminations

    

As Reported

Current assets

$                      286,407

 

$  15,567

 

$        (1,340)

 

$     300,634

Non-current assets

1,547,311

 

5,269

 

-

 

1,552,580

 

Total assets

$                   1,833,718

 

$  20,836

 

$        (1,340)

 

$  1,853,214

                 

Current liabilities

$                      256,936

 

$    7,652

 

$        (1,192)

 

$     263,396

Non-current liabilities

1,384,986

 

399

 

-

 

1,385,385

 

Total liabilities

$                   1,641,922

 

$    8,051

 

$        (1,192)

 

$  1,648,781

                 

Total stockholders' equity

191,796

 

-

 

(148)

 

191,648

Noncontrolling interest

-

 

12,785

 

-

 

12,785

 

Total liabilities and stockholders' equity

$                   1,833,718

 

$  20,836

 

$        (1,340)

 

$  1,853,214

                 
   

February 1, 2014

   

Balance Before 

           
   

Consolidation of VIEs

 

VIEs*

 

Eliminations

 

As Reported

Current assets

$                      253,764

 

$  18,764

 

$        (1,488)

 

$     271,040

Non-current assets

1,564,620

 

4,444

 

-

 

1,569,064

 

Total assets

$                   1,818,384

 

$  23,208

 

$        (1,488)

 

$  1,840,104

                 

Current liabilities

$                      196,631

 

$    7,490

 

$        (1,356)

 

$     202,765

Non-current liabilities

1,387,828

 

370

 

(1)

 

1,388,197

 

Total liabilities

$                   1,584,459

 

$    7,860

 

$        (1,357)

 

$  1,590,962

                 

Total stockholders' equity

233,925

 

-

 

(131)

 

233,794

Noncontrolling interest

-

 

15,348

 

-

 

15,348

 

Total liabilities and stockholders' equity

$                   1,818,384

 

$  23,208

 

$        (1,488)

 

$  1,840,104

                 
   

August 3, 2013

   

Balance Before 

           
   

Consolidation of VIEs

 

VIEs*

 

Eliminations

 

As Reported

Current assets

$                      316,457

 

$  12,708

 

$        (1,941)

 

$     327,224

Non-current assets

1,725,168

 

3,169

 

-

 

1,728,337

 

Total assets

$                   2,041,625

 

$  15,877

 

$        (1,941)

 

$  2,055,561

                 

Current liabilities

$                      189,637

 

$    6,850

 

$        (1,746)

 

$     194,741

Non-current liabilities

1,422,337

 

229

 

-

 

1,422,566

 

Total liabilities

$                   1,611,974

 

$    7,079

 

$        (1,746)

 

$  1,617,307

                 

Total stockholders' equity

429,651

 

-

 

(195)

 

429,456

Noncontrolling interest

-

 

8,798

 

-

 

8,798

 

Total liabilities and stockholders' equity

$                   2,041,625

 

$  15,877

 

$        (1,941)

 

$  2,055,561

* The Variable Interest Entities ("VIEs") include the results of Gymboree (China) Commercial and Trading Co. Ltd. and Gymboree (Tianjin) Educational Information Consultation Co. Ltd. While the Company does not control these two entities, they have been determined to be variable interest entities and their results have been consolidated by the Company.

SOURCE The Gymboree Corporation

###

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