Gymboree Reports Increased Sales and Adjusted EBITDA in the Fourth Quarter of Fiscal 2014

Fourth Quarter Comparable Sales Increased 5%

SAN FRANCISCO - April 23, 2015 // PRNewswire // - The Gymboree Corporation (the "Company") today reported consolidated financial results for the fourth quarter and fiscal year ended January 31, 2015.

Fourth Quarter Highlights include:

  • Net sales of $375.6 million, increased 7% from the fourth quarter of fiscal 2013,
  • Comparable sales (including online sales) increase of 5% with increases in all brands,
  • Adjusted gross profit margin of 37.2%, an increase of approximately 110 basis points versus last year, and
  • Adjusted EBITDA of $32.3 million increased 29.1% from the fourth quarter last year.

"We're very pleased with the progress we made in the fourth quarter across our businesses, particularly in Janie and Jack and Crazy 8," said Mark Breitbard, Chief Executive Officer. "Gymboree brand continues to be our primary focus and we believe we have the right initiatives and strategies in place to achieve our 2015 plans."

Fiscal 2014 Fourth Quarter Results (13 weeks ended January 31, 2015 versus 13 weeks ended February 1, 2014)

  • Net sales were $375.6 million, compared to $351.0 million in the fourth quarter of fiscal 2013, an increase of 7%.
  • Comparable sales (including online sales) increased 5% compared to the fourth quarter of fiscal 2013.
  • Gross profit was $137.9 million, or 36.7% of net sales, compared to $124.5 million, or 35.5% of net sales for the fourth quarter of fiscal 2013.
  • Adjusted gross profit was $139.7 million, or 37.2% of net sales, compared to$126.6 million, or 36.1% of net sales, for the fourth quarter of fiscal 2013.
  • SG&A expense was $125.2 million, or 33.3% of net sales, compared to $126.6 million, or 36.1% of net sales in the fourth quarter of fiscal 2013.
  • Adjusted SG&A expense was $123.1 million, or 32.8% of net sales, compared to$122.6 million, or 34.9% of net sales in the fourth quarter of fiscal 2013.
  • Adjusted EBITDA, defined as net loss attributable to The Gymboree Corporation before interest, income taxes, and depreciation and amortization, adjusted for other items as described below, was $32.3 million compared to $25.0 million for the fourth quarter of fiscal 2013.
  • Net loss attributable to The Gymboree Corporation for the quarter was $7.4 million compared to $167.2 million for the same period last year. The Company recorded a $157.2 million non-cash goodwill and intangible asset impairment charge in the fourth quarter of fiscal 2013.

Fiscal Year 2014 (52 weeks ended January 31, 2015 versus 52 weeks endedFebruary 1, 2014) 

  • Net sales were $1.23 billion compared to $1.24 billion in fiscal year 2013.
  • Comparable sales (including online sales) decreased 3% compared to fiscal 2013.
  • Gross profit was $468.5 million, or 38.1% of net sales, compared to $476.0 million, or 38.2% of net sales for fiscal 2013.
  • Adjusted gross profit was $475.8 million, or 38.7% of net sales, compared to$485.8 million, or 39.0% of net sales in fiscal 2013.
  • SG&A expense was $448.4 million, or 36.5% of net sales, compared to $443.9 million, or 35.7% of net sales in the prior year. SG&A expense in fiscal 2014 included a $6.0 million asset impairment charge related to underperforming stores. SG&A expense in fiscal 2013 included a $7.6 million asset impairment charge related to underperforming stores and a $3.1 million asset impairment charge related to abandonment of assets.
  • Adjusted SG&A expense was $441.2 million, or 35.9% of net sales, compared to$430.6 million, or 34.6% of net sales in fiscal 2013.
  • Adjusted EBITDA totaled $93.7 million, compared to $119.7 million for fiscal 2013.
  • Net loss attributable to The Gymboree Corporation for fiscal year 2014 was$574.1 million compared to $203.0 million for the same period last year. The Company recorded a $591.4 million non-cash goodwill and intangible asset impairment charge in the third quarter of fiscal 2014. The Company recorded a$157.2 million non-cash goodwill and intangible asset impairment charge in the fourth quarter of fiscal 2013.

Adjusted EBITDA, Adjusted gross profit and Adjusted SG&A expense are not financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). For a description of Adjusted EBITDA and a reconciliation of these measures to GAAP measures, see "Non-GAAP Financial Measures" below and Exhibit D of this press release.

Balance Sheet and Other Highlights

  • There were $33.0 million in borrowings outstanding under the Company's $225 million asset-backed loan facility and approximately $103.3 million of undrawn availability after deducting letters of credit and outstanding borrowings at the end of the fourth quarter of fiscal 2014.
  • Capital expenditures were $32.0 million during fiscal 2014.
  • Inventory balances at the end of fiscal 2014 were $198.3 million compared to$175.5 million at the end of fiscal 2013. On a per square foot basis, inventory cost increased 13% year over year and inventory units increased by a mid-teen percentage year over year.

Fiscal 2015 Business Outlook

The Company's fiscal 2015 outlook is based on current economic environment trends, as well as management expectations for the remainder of the year.

First Quarter

The Company anticipates Adjusted EBITDA for the first quarter of fiscal 2015 to be in the range of $12 million to $15 million. This expectation reflects flat to slightly negative comparable sales, as well as the impact of the port slowdown, which is estimated to negatively impact Adjusted EBITDA by approximately $6 million.

Full Year

For the full year, the Company expects Adjusted EBITDA to be in the range of $95 million to $105 million, which includes a negative impact to Adjusted EBITDA of approximately $9 million to $12 million resulting from the port slowdown in the first half of the year. Based on this guidance, the Company expects to have sufficient liquidity during fiscal 2015 to service its debt and invest in the business to drive long-term growth.

Stores

During fiscal 2015, the Company plans to open approximately 12 stores and expects to close approximately 30 to 40 stores.

Capital Expenditures

During fiscal 2015, the Company anticipates spending approximately $25 million to $30 million for capital expenditures.

Non-GAAP Financial Measures

The Company defines "Adjusted EBITDA" as net loss attributable to The Gymboree Corporation before interest, income taxes, and depreciation and amortization ("EBITDA") adjusted for other items including 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. The Company is likely to exclude these items from Adjusted EBITDA in the future and may also exclude other similar items, the effect of which is uncertain but may be significant in amount. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts.

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 loss attributable to The Gymboree Corporation).

The live broadcast of the discussion of fourth quarter and fiscal 2014 financial results and fiscal 2015 business outlook will be available to interested parties at 2:00 p.m. PT (5:00 p.m. ET) on Thursday, April 23, 2015. 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 7, 2015, at 855-859-2056, passcode 91942931.

About The Gymboree Corporation

The Gymboree Corporation's specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of January 31, 2015, the Company operated a total of 1,326 retail stores: 608 Gymboree® stores (554 in the United States, 48 in Canada, 1 in Puerto Rico and 5 in Australia), 169 Gymboree Outlet stores (168 in the United States and 1 in Puerto Rico), 147 Janie and Jack® shops and 402 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 698 franchised and Company-operated Gymboree Play & Music® centers in the United States and 41 other countries.

Forward-Looking Statements

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 2015 Business Outlook" and the Company's expectation that it has the right initiatives and strategies in place to achieve its goals in 2015. 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 recent disruptions in the west coast ports and the timing of the ports resuming normal operations, if at all, the ongoing volatility in the commodities markets, uncertainties relating to high levels of consumer debt and general economic conditions, volatility in the financial markets, potential data breaches of the Company's or the Company's vendors or suppliers computer networks, the Company's ability to anticipate and timely respond to changes in trends, consumer preferences and customer reactions to new merchandise (particularly given the Company's need to build up inventory significantly in advance of potential product sales), competitive market conditions, including promotional activities of the Company's competitors, success in meeting the Company's delivery targets, 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

 

52 Weeks Ended

         

January 31, 2015

    

February 1, 2014

    

January 31, 2015

    

February 1, 2014

 

Net sales:

                 
 

Retail

   

$             361,711

 

$            340,003

 

$          1,178,476

 

$         1,197,176

 

Gymboree Play & Music 

   

9,013

 

6,276

 

30,908

 

25,685

 

Retail Franchise

   

4,884

 

4,753

 

19,356

 

21,708

   

Total net sales

   

375,608

 

351,032

 

1,228,740

 

1,244,569

 

Cost of goods sold, including buying and occupancy expenses

 

(237,703)

 

(226,545)

 

(760,192)

 

(768,555)

   

Gross profit

   

137,905

 

124,487

 

468,548

 

476,014

 

Selling, general and administrative expenses

   

(125,247)

 

(126,572)

 

(448,356)

 

(443,923)

 

Goodwill and intangible asset impairment

   

-

 

(157,189)

 

(591,396)

 

(157,189)

   

Operating income (loss)

   

12,658

 

(159,274)

 

(571,204)

 

(125,098)

 

Interest income

   

88

 

43

 

245

 

186

 

Interest expense

   

(20,781)

 

(20,206)

 

(82,378)

 

(81,558)

 

Loss on extinguishment of debt

   

-

 

-

 

-

 

(834)

 

Other (expense) income, net

   

(73)

 

(1,254)

 

(594)

 

(503)

   

Loss before income taxes

   

(8,108)

 

(180,691)

 

(653,931)

 

(207,807)

 

Income tax (expense) benefit

   

(1,753)

 

10,911

 

73,820

 

1,456

   

Net loss

   

(9,861)

 

(169,780)

 

(580,111)

 

(206,351)

   

Net loss attributable to noncontrolling interest

   

2,415

 

2,624

 

6,006

 

3,324

   

Net loss attributable to The Gymboree Corporation

 

$               (7,446)

 

$           (167,156)

 

$           (574,105)

 

$           (203,027)

 

EXHIBIT B

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

           
     

January 31,

    

February 1,

     

2015

 

2014

ASSETS

       

Current assets:

       
 

Cash and cash equivalents

 

$      18,520

 

$      39,429

 

Accounts receivable

 

25,248

 

21,882

 

Merchandise inventories

 

198,337

 

175,495

 

Prepaid income taxes

 

2,599

 

1,979

 

Prepaid expenses

 

6,821

 

18,801

 

Deferred income taxes

 

6,824

 

13,454

 

    Total current assets

 

258,349

 

271,040

           

Property and equipment, net

 

182,431

 

206,308

Goodwill

 

373,834

 

758,777

Other intangible assets, net

 

343,552

 

559,824

Deferred financing costs

 

25,622

 

32,455

Other assets

 

4,155

 

11,700

           
 

    Total assets

 

$ 1,187,943

 

$ 1,840,104

           
           

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

     

Current liabilities:

       
 

Accounts payable

 

$      87,032

 

$    101,959

 

Accrued liabilities

 

94,805

 

100,303

 

Line of credit borrowings

 

33,000

 

-

 

Current obligation under capital lease

 

552

 

503

 

    Total current liabilities

 

215,389

 

202,765

           

Long-term liabilities:

       
 

Long-term debt

 

1,114,048

 

1,113,742

 

Long-term obligation under capital lease

 

2,850

 

3,402

 

Lease incentives and other liabilities

 

53,677

 

50,432

 

Unrecognized tax benefits

 

5,048

 

6,157

 

Deferred income taxes

 

129,196

 

214,464

 

    Total liabilities

 

1,520,208

 

1,590,962

           

Stockholders' (deficit) equity

 

(332,265)

 

249,142

 

Total liabilities and stockholders' (deficit) equity

 

$ 1,187,943

 

$ 1,840,104

 

EXHIBIT C

     

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

       
 

52 Weeks Ended

 

January 31, 2015

    

February 1, 2014

CASH FLOWS FROM OPERATING ACTIVITIES:

     

Net loss

$           (580,111)

 

$           (206,351)

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

     
 

Loss on extinguishment of debt

-

 

834

 

Goodwill and intangible asset impairment

591,396

 

157,189

 

Depreciation and amortization

44,422

 

46,416

 

Amortization of deferred financing costs and accretion of original issue discount

7,138

 

6,798

 

Interest rate cap contracts - adjustment to market

2,062

 

1,135

 

Loss on disposal/impairment of assets

9,010

 

12,381

 

Deferred income taxes

(78,466)

 

(2,853)

 

Share-based compensation expense

4,624

 

5,809

 

Other

34

 

53

 

Change in assets and liabilities:

     
   

Accounts receivable

(3,928)

 

5,567

   

Merchandise inventories

(23,472)

 

22,675

   

Prepaid income taxes

(682)

 

1,056

   

Prepaid expenses and other assets

18,466

 

(4,378)

 

Accounts payable

(14,902)

 

11,887

 

Accrued liabilities

(2,065)

 

6,868

 

Lease incentives and other liabilities

4,716

 

9,785

 

Net cash (used in) provided by operating activities

(21,758)

 

74,871

       

CASH FLOWS FROM INVESTING ACTIVITIES:

     

Capital expenditures

(31,992)

 

(52,632)

Other

50

 

(494)

 

Net cash used in investing activities

(31,942)

 

(53,126)

       

CASH FLOWS FROM FINANCING ACTIVITIES:

     

Proceeds from ABL facility

447,000

 

123,000

Payments on ABL facility

(414,000)

 

(123,000)

Repurchase of notes

-

 

(24,760)

Payments on capital lease

(503)

 

(196)

Dividend payment to Parent

(153)

 

(7,564)

Capital contribution received by noncontrolling interest

992

 

15,886

 

Net cash provided by (used in) financing activities

33,336

 

(16,634)

Effect of exchange rate fluctuations on cash and cash equivalents

(545)

 

990

Net (decrease) increase in cash and cash equivalents

(20,909)

 

6,101

CASH AND CASH EQUIVALENTS:

     

Beginning of period

39,429

 

33,328

End of period

$              18,520

 

$              39,429

 

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

 

52 Weeks Ended

   

January 31, 2015

   

February 1, 2014

    

January 31, 2015

    

February 1, 2014

                 

Net loss attributable to The Gymboree Corporation

 

$               (7,446)

 

$           (167,156)

 

$           (574,105)

 

$           (203,027)

Reconciling items (a):

               

Interest expense 

 

20,781

 

20,206

 

82,378

 

81,558

Interest income 

 

(10)

 

(18)

 

(90)

 

(132)

Income tax expense (benefit)

 

979

 

(10,340)

 

(75,654)

 

(1,138)

Depreciation and amortization (b)

 

10,476

 

11,021

 

42,757

 

45,177

Non-cash share-based compensation expense 

 

1,235

 

1,392

 

4,624

 

5,809

Loss on disposal/impairment on assets

 

2,416

 

6,686

 

8,457

 

12,269

Loss on extinguishment of debt

 

-

 

-

 

-

 

834

Goodwill and intangible asset impairment

 

-

 

157,189

 

591,396

 

157,189

Acquisition-related adjustments (c)

 

3,327

 

3,708

 

12,005

 

15,590

Other (d)

 

513

 

2,305

 

1,882

 

5,543

Adjusted EBITDA

 

$               32,271

 

$              24,993

 

$               93,650

 

$            119,672

                 

(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

 

$                 1,534

 

$                3,409

Amortization of below and above market leases (impacts COGS)

 

(234)

 

(336)

 

(958)

 

(1,446)

   

$                    149

 

$                     48

 

$                    576

 

$                1,963

                 

(c) Includes the following:

               

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

 

$                 2,052

 

$                2,202

 

$                 8,241

 

$                8,877

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

 

1,275

 

1,308

 

3,764

 

4,377

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)

 

-

 

198

 

-

 

2,336

   

$                 3,327

 

$                3,708

 

$               12,005

 

$              15,590

                 

(d) Other is comprised of restructuring charges, certain non-recurring charges and executive-related hiring expenses.

             
                 

OTHER NON-GAAP FINANCIAL MEASURES:

               
                 
   

13 Weeks Ended

 

52 Weeks Ended

   

January 31, 2015

 

February 1, 2014

 

January 31, 2015

 

February 1, 2014

                 

Gross profit as reported

 

$             137,905

 

$            124,487

 

$             468,548

 

$            476,014

Acquisition-related adjustments

 

1,818

 

2,064

 

7,283

 

9,767

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

 

$             139,723

 

$            126,551

 

$             475,831

 

$            485,781

                 
                 
   

13 Weeks Ended

 

52 Weeks Ended

   

January 31, 2015

 

February 1, 2014

 

January 31, 2015

 

February 1, 2014

                 

SG&A as reported

 

$           (125,247)

 

$           (126,572)

 

$           (448,356)

 

$           (443,923)

Acquisition-related adjustments

 

1,658

 

1,692

 

5,298

 

7,786

Other adjustments

 

513

 

2,305

 

1,882

 

5,543

   

2,171

 

3,997

 

7,180

 

13,329

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

 

$           (123,076)

 

$           (122,575)

 

$           (441,176)

 

$           (430,594)

 

EXHIBIT E

             

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)

                 
   

For the 13 Weeks Ended January 31, 2015

   

Balance Before 

                 
   

Consolidation of VIEs

 

VIEs*

 

Eliminations

 

As Reported

Net sales

$                      368,882

 

$   8,649

 

$       (1,923)

 

$     375,608

Cost of goods sold, including buying and occupancy expenses

(235,330)

 

(2,769)

 

396

 

(237,703)

 

Gross profit

133,552

 

5,880

 

(1,527)

 

137,905

Selling, general and administrative expenses

(119,199)

 

(7,546)

 

1,498

 

(125,247)

 

Operating income (loss)

14,353

 

(1,666)

 

(29)

 

12,658

Other non operating (expense) income

(20,791)

 

25

 

-

 

(20,766)

 

Loss before income taxes

(6,438)

 

(1,641)

 

(29)

 

(8,108)

Income tax expense

(979)

 

(774)

 

-

 

(1,753)

 

Net loss

(7,417)

 

(2,415)

 

(29)

 

(9,861)

 

Net loss attributable to noncontrolling interest

-

 

2,415

 

-

 

2,415

 

Net loss attributable to The Gymboree Corporation

$                        (7,417)

 

$         -

 

$            (29)

 

$        (7,446)

                 
                 
   

For the 13 Weeks Ended February 1, 2014

   

Balance Before 

           
   

Consolidation of VIEs

 

VIEs*

 

Eliminations

 

As Reported

Net sales

$                      346,552

 

$   5,658

 

$       (1,178)

 

$     351,032

Cost of goods sold, including buying and occupancy expenses

(224,004)

 

(2,649)

 

108

 

(226,545)

 

Gross profit

122,548

 

3,009

 

(1,070)

 

124,487

Selling, general and administrative expenses

(279,291)

 

(5,579)

 

1,109

 

(283,761)

 

Operating loss

(156,743)

 

(2,570)

 

39

 

(159,274)

Other non operating (expense) income

(20,791)

 

(624)

 

(2)

 

(21,417)

 

Loss before income taxes

(177,534)

 

(3,194)

 

37

 

(180,691)

Income tax benefit

10,340

 

570

 

1

 

10,911

 

Net loss

(167,194)

 

(2,624)

 

38

 

(169,780)

 

Net loss attributable to noncontrolling interest

-

 

2,624

 

-

 

2,624

 

Net loss attributable to The Gymboree Corporation

$                    (167,194)

 

$         -

 

$              38

 

$    (167,156)

                 
                 
   

For the 52 Weeks Ended January 31, 2015

   

Balance Before 

           
   

Consolidation

 of VIEs

 

 

VIEs*

 

 

Eliminations

 

As Reported

Net sales

$                   1,209,676

 

$ 26,354

 

$       (7,290)

 

$  1,228,740

Cost of goods sold, including buying and occupancy expenses

(753,756)

 

(7,643)

 

1,207

 

(760,192)

 

Gross profit

455,920

 

18,711

 

(6,083)

 

468,548

Selling, general and administrative expenses

(1,022,894)

 

(22,902)

 

6,044

 

(1,039,752)

 

Operating loss

(566,974)

 

(4,191)

 

(39)

 

(571,204)

Other non operating (expense) income

(82,746)

 

19

 

-

 

(82,727)

 

Loss before income taxes

(649,720)

 

(4,172)

 

(39)

 

(653,931)

Income tax benefit (expense)

75,654

 

(1,834)

 

-

 

73,820

 

Net loss

(574,066)

 

(6,006)

 

(39)

 

(580,111)

 

Net loss attributable to noncontrolling interest

-

 

6,006

 

-

 

6,006

 

Net loss attributable to The Gymboree Corporation

$                    (574,066)

 

$         -

 

$            (39)

 

$    (574,105)

                 
                 
   

For the 52 weeks Ended February 1, 2014

   

Balance Before 

           
   

Consolidation

 of VIEs

 

 

VIEs*

 

 

Eliminations

 

As Reported

Net sales

$                   1,228,816

 

$ 20,685

 

$       (4,932)

 

$  1,244,569

Cost of goods sold, including buying and occupancy expenses

(762,595)

 

(6,517)

 

557

 

(768,555)

 

Gross profit

466,221

 

14,168

 

(4,375)

 

476,014

Selling, general and administrative expenses

(587,524)

 

(18,056)

 

4,468

 

(601,112)

 

Operating loss

(121,303)

 

(3,888)

 

93

 

(125,098)

Other non operating (expense) income, net

(82,954)

 

247

 

(2)

 

(82,709)

 

Loss before income taxes

(204,257)

 

(3,641)

 

91

 

(207,807)

Income tax benefit

1,138

 

317

 

1

 

1,456

 

Net loss

(203,119)

 

(3,324)

 

92

 

(206,351)

 

Net loss attributable to noncontrolling interest

-

 

3,324

 

-

 

3,324

 

Net loss attributable to The Gymboree Corporation

$                    (203,119)

 

$         -

 

$              92

 

$    (203,027)

 

EXHIBIT E (continued)

             

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING BALANCE SHEETS

(In thousands)

(Unaudited)

                   
     

January 31, 2015

     

Balance Before 

                 
     

Consolidation of VIEs

 

VIEs*

 

Eliminations

 

As Reported

Current assets

$                      243,682

 

$  16,222

 

$        (1,555)

 

$     258,349

Non-current assets

924,367

 

5,227

 

-

 

929,594

 

Total assets

$                   1,168,049

 

$  21,449

 

$        (1,555)

 

$  1,187,943

                   

Current liabilities

$                      205,674

 

$  11,088

 

$        (1,373)

 

$     215,389

Non-current liabilities

1,304,384

 

435

 

-

 

1,304,819

 

Total liabilities

$                   1,510,058

 

$  11,523

 

$        (1,373)

 

$  1,520,208

                   

Total stockholders' deficit

(342,009)

 

-

 

(182)

 

(342,191)

Noncontrolling interest

-

 

9,926

 

-

 

9,926

 

Total liabilities and stockholders' deficit

$                   1,168,049

 

$  21,449

 

$        (1,555)

 

$  1,187,943

                   
     

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

                 

* 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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