The Gymboree Corporation Reports Second Quarter Fiscal 2015 Results

  • Net Sales of $273.5 million, an increase of 3.5% compared to the second quarter of fiscal 2014
  • Comparable sales (including online sales) increased 2% during the second quarter of fiscal 2015
  • Adjusted EBITDA was $11.1 million for the second quarter of fiscal 2015 compared to $9.6 million for the second quarter of fiscal 2014, an increase of 15.7%

SAN FRANCISCO - September 10, 2015 // PRNewswire // - The Gymboree Corporation (the "Company") today reported consolidated financial results for the second fiscal quarter ended August 1, 2015.

Second Quarter Results (13-weeks ended August 1, 2015 versus 13-weeks ended August 2, 2014)

  • Net sales were $273.5 million, compared to $264.3 million in the second quarter of fiscal 2014;
  • Comparable sales (including online stores) increased 2%;
  • Gross profit was $100.7 million, or 36.8% of net sales, compared to $96.4 million, or 36.5% of net sales, for the second quarter of fiscal 2014;
  • Adjusted gross profit was $102.3 million, or 37.4% of net sales, compared to $98.2 million, or 37.1% of net sales, for the second quarter of fiscal 2014, an increase of 30 basis points;
  • SG&A expense was $103.4 million, or 37.8% of net sales, compared to $107.1 million, or 40.5% of net sales, in the second quarter of fiscal 2014. The $3.8 million decline in SG&A expense was primarily driven by a decline in impairment charges of $3.2 million from the comparable prior year period;
  • Adjusted SG&A expense was $100.8 million, or 36.9% of net sales, compared to $104.9 million, or 39.7% of net sales, in the second quarter of fiscal 2014;
  • 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 $11.1 million compared to $9.6 million for the second quarter of fiscal 2014, an increase of $1.5 million;
  • Adjusted EBITDA was negatively impacted by approximately $5 million as a result of receipt flow disruption driven by the west coast port slowdown; and
  • Net loss attributable to The Gymboree Corporation for the quarter was $26.6 million compared to $31.2 million for the same quarter of fiscal 2014.

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 Highlights

  • As of the end of the second quarter of fiscal 2015, there were $70.0 million in borrowings outstanding under the Company's $225 million asset-backed loan facility and approximately $95.7 million of undrawn availability after being reduced by letters of credit of $30.4 million.
  • Capital expenditures were $4.4 million during the second quarter of fiscal 2015.
  • Inventory balances at the end of the second quarter of fiscal 2015 were $243.0 million, compared to $223.7 million at the end of the second quarter of fiscal 2014. On a per square foot basis, inventory cost was up 9% over the second quarter of fiscal 2014. Inventory units were up on a mid-teens percentage basis.

As previously announced, on May 5, 2015, the Company entered into an agreement to sell and lease-back its distribution center located in Dixon, California. Net proceeds received from the sale were $25.9 million of which approximately $10.9 million were restricted to fund capital expenditures or reduce the Company's liability under the Term loan.

Fiscal 2015 Business Outlook

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

For the full year, the Company continues to expect Adjusted EBITDA to be in the range of $95 million to $105 million, which includes the net impact to Adjusted EBITDA of approximately $11 million resulting from the west coast 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 continues to plan to open approximately 12 stores and expects to close approximately 30 to 40 stores.

Capital Expenditures

During fiscal 2015, the Company continues to anticipate 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, 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 second quarter fiscal 2015 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, September 10, 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, September 24, 2015, at 855-859-2056, passcode 93757199.

About The Gymboree Corporation

The Gymboree Corporation's specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of August 1, 2015, the Company operated a total of 1,317 retail stores: 604 Gymboree® stores (550 in the United States, 48 in Canada, 1 in Puerto Rico and 5 in Australia), 172 Gymboree Outlet stores (171 in the United States and 1 in Puerto Rico), 150 Janie and Jack® shops (149 in the United States and 1 in Puerto Rico), and 391 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 712 franchised and Company-operated Gymboree Play & Music® centers in the United States and 42 other countries.

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

Forward-Looking Statements

The foregoing financial information for the second quarter of fiscal 2015 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 2015 Business Outlook". 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, 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 January 31, 2015, filed with the Securities and Exchange Commission ("SEC") on May 1, 2015. 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 1, 2015

    

August 2, 2014

    

August 1, 2015

    

August 2, 2014

 

Net sales:

                   

Retail

   

$        256,991

 

$         253,376

 

$         518,723

 

$        512,500

 

Gymboree Play & Music 

   

11,667

 

7,319

 

20,315

 

14,151

 

Retail Franchise

   

4,807

 

3,608

 

10,496

 

9,662

 
 

Total net sales

   

273,465

 

264,303

 

549,534

 

536,313

 

Cost of goods sold, including buying and occupancy expenses

 

(172,805)

 

(167,939)

 

(343,517)

 

(331,591)

 
 

Gross profit

   

100,660

 

96,364

 

206,017

 

204,722

 

Selling, general and administrative expenses

   

(103,366)

 

(107,140)

 

(208,076)

 

(209,430)

 
 

Operating loss

   

(2,706)

 

(10,776)

 

(2,059)

 

(4,708)

 

Interest income

   

23

 

68

 

42

 

115

 

Interest expense

   

(21,631)

 

(20,455)

 

(42,707)

 

(40,829)

 

Other income (expense), net

   

142

 

(134)

 

32

 

(502)

 
 

Loss before income taxes

   

(24,172)

 

(31,297)

 

(44,692)

 

(45,924)

 

Income tax expense

   

(1,222)

 

(1,556)

 

(3,182)

 

(1,932)

 
 

Net loss

   

(25,394)

 

(32,853)

 

(47,874)

 

(47,856)

 
 

Net (income) loss attributable to noncontrolling interest

   

(1,168)

 

1,700

 

(1,713)

 

3,272

 
 

Net loss attributable to The Gymboree Corporation

 

$         (26,562)

 

$          (31,153)

 

$          (49,587)

 

$         (44,584)

 

 

EXHIBIT B

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

               
     

August 1,

    

January 31,

    

August 2,

     

2015

 

2015

 

2014

ASSETS

           

Current assets:

           
 

Cash and cash equivalents

 

$         23,497

 

$          18,520

 

$          24,879

 

Accounts receivable

 

24,684

 

25,248

 

21,129

 

Merchandise inventories

 

243,037

 

198,337

 

223,694

 

Prepaid income taxes

 

2,596

 

2,599

 

3,076

 

Prepaid expenses

 

19,399

 

6,821

 

19,684

 

Deferred income taxes

 

9,124

 

6,824

 

8,172

 

    Total current assets

 

322,337

 

258,349

 

300,634

               

Property and equipment, net

 

170,605

 

182,431

 

196,667

Goodwill

 

373,446

 

373,834

 

758,777

Other intangible assets, net

 

342,157

 

343,552

 

558,210

Deferred financing costs

 

23,145

 

25,622

 

29,091

Restricted cash

 

8,157

 

-

 

-

Other assets

 

3,867

 

4,155

 

9,835

               
 

    Total assets

 

$     1,243,714

 

$     1,187,943

 

$     1,853,214

               
               

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

         

Current liabilities:

           
 

Accounts payable

 

$        123,995

 

$          87,032

 

$        112,638

 

Accrued liabilities

 

95,079

 

94,805

 

86,231

 

Line of credit borrowings

 

70,000

 

33,000

 

64,000

 

Current obligation under capital lease

 

578

 

552

 

527

 

    Total current liabilities

 

289,652

 

215,389

 

263,396

               

Long-term liabilities:

           
 

Long-term debt

 

1,114,207

 

1,114,048

 

1,113,893

 

Long-term sale-leaseback financing liability

 

26,516

 

-

 

-

 

Long-term obligation under capital lease

 

2,555

 

2,850

 

3,133

 

Lease incentives and other liabilities

 

51,770

 

53,677

 

52,664

 

Unrecognized tax benefits

 

5,123

 

5,048

 

6,475

 

Deferred income taxes

 

131,887

 

129,196

 

209,220

 

    Total liabilities

 

1,621,710

 

1,520,208

 

1,648,781

               

Stockholders' (deficit) equity

 

(377,996)

 

(332,265)

 

204,433

               
 

Total liabilities and stockholders' (deficit) equity

 

$     1,243,714

 

$     1,187,943

 

$     1,853,214

 

EXHIBIT C

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

           
     

26 Weeks Ended

     

August 1, 2015

    

August 2, 2014

CASH FLOWS FROM OPERATING ACTIVITIES:

     

Net loss

 

$            (47,874)

 

$          (47,856)

Adjustments to reconcile net loss to net cash used in operating activities:

     
 

Depreciation and amortization

20,896

 

22,534

 

Amortization of deferred financing costs and accretion of original issue discount

3,758

 

3,515

 

Interest rate cap contracts - adjustment to market

1,693

 

932

 

(Gain) loss on disposal/impairment of assets

(93)

 

3,883

 

Deferred income taxes

294

 

36

 

Share-based compensation expense

1,852

 

2,269

 

Other

 

(549)

 

21

 

Change in assets and liabilities:

     

                      Accounts receivable

637

 

739

                      Merchandise inventories

(45,037)

 

(48,576)

                      Prepaid income taxes

(24)

 

(1,095)

                      Prepaid expenses and other assets

(12,831)

 

(174)

                      Accounts payable

37,001

 

10,673

                      Accrued liabilities

(792)

 

(12,822)

                      Lease incentives and other liabilities

(897)

 

3,472

 

Net cash used in operating activities

(41,966)

 

(62,449)

           

CASH FLOWS FROM INVESTING ACTIVITIES:

     

Capital expenditures

(7,506)

 

(16,523)

Increase in restricted cash

(10,863)

 

-

Decrease in restricted cash

2,706

 

-

Proceeds from sale of assets

353

 

-

Other

 

40

 

(66)

 

Net cash used in investing activities

(15,270)

 

(16,589)

           

CASH FLOWS FROM FINANCING ACTIVITIES:

     

Proceeds from ABL facility

283,000

 

218,000

Payments on ABL facility

(246,000)

 

(154,000)

Proceeds from sale-leaseback financing liability

26,750

 

-

Payments for deferred financing costs

(1,122)

 

-

Payments on capital lease and sale-leaseback financing liability

(312)

 

(246)

Dividend payment to parent

(11)

 

-

Capital contribution received by noncontrolling interest

-

 

992

 

Net cash provided by financing activities

62,305

 

64,746

Effect of exchange rate fluctuations on cash and cash equivalents

(92)

 

(258)

Net increase (decrease) in cash and cash equivalents

4,977

 

(14,550)

CASH AND CASH EQUIVALENTS:

     

Beginning of period

18,520

 

39,429

End of period

 

$             23,497

 

$            24,879

 

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 1, 2015

 

August 2, 2014

 

August 1, 2015

 

August 2, 2014

                 

Net loss attributable to The Gymboree Corporation

 

$            (26,562)

 

$            (31,153)

 

$            (49,587)

 

$            (44,584)

Reconciling items (a):

               

Interest expense 

 

21,631

 

20,455

 

42,707

 

40,829

Interest income 

 

(10)

 

(14)

 

(17)

 

(66)

Income tax expense

 

613

 

791

 

1,918

 

1,390

Depreciation and amortization (b)

 

9,813

 

11,018

 

20,108

 

21,804

Non-cash share-based compensation expense 

 

1,132

 

993

 

1,852

 

2,269

Loss on disposal/impairment on assets

 

409

 

3,525

 

542

 

3,855

Acquisition-related adjustments (c)

 

2,767

 

2,963

 

6,001

 

5,907

Other (d)

 

1,271

 

983

 

3,137

 

188

Adjusted EBITDA

 

$              11,064

 

$                9,561

 

$              26,661

 

$              31,592

                 

(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

 

$                   383

 

$                   767

 

$                   767

Amortization of below and above market leases (impacts COGS)

 

(214)

 

(240)

 

(347)

 

(487)

   

$                   169

 

$                   143

 

$                   420

 

$                   280

                 

(c) Includes the following:

               

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

 

$                1,881

 

$                2,063

 

$                3,767

 

$                4,131

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

 

886

 

900

 

2,234

 

1,776

   

$                2,767

 

$                2,963

 

$                6,001

 

$                5,907

                 

(d) Other is comprised of restructuring charges in the first half of fiscal 2015 and 2014, and non-recurring changes in reserves in the second quarter of fiscal 2015 and first quarter of fiscal 2014.

                 

OTHER NON-GAAP FINANCIAL MEASURES:

               
                 
   

13 Weeks Ended

 

26 Weeks Ended

   

August 1, 2015

 

August 2, 2014

 

August 1, 2015

 

August 2, 2014

                 

Gross profit as reported

 

$            100,660

 

$              96,364

 

$            206,017

 

$            204,722

Acquisition-related adjustments

 

1,667

 

1,823

 

3,420

 

3,644

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

 

$            102,327

 

$              98,187

 

$            209,437

 

$            208,366

                 
                 
   

13 Weeks Ended

 

26 Weeks Ended

   

August 1, 2015

 

August 2, 2014

 

August 1, 2015

 

August 2, 2014

                 

SG&A as reported

 

$          (103,366)

 

$          (107,140)

 

$          (208,076)

 

$          (209,430)

Acquisition-related adjustments

 

1,269

 

1,283

 

3,001

 

2,543

Other adjustments

 

1,271

 

983

 

3,137

 

188

   

2,540

 

2,266

 

6,138

 

2,731

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

 

$          (100,826)

 

$          (104,874)

 

$          (201,938)

 

$          (206,699)

 

EXHIBIT E

             

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)

                 
   

For the 13 Weeks Ended August 1, 2015

   

Balance Before 

                 
   

Consolidation of VIEs

 

VIEs*

 

Eliminations

 

As Reported

Net sales

$                   264,895

 

$                   11,081

 

$               (2,511)

 

$           273,465

Cost of goods sold, including buying and occupancy expenses

(170,680)

 

(2,831)

 

706

 

(172,805)

 

Gross profit

94,215

 

8,250

 

(1,805)

 

100,660

Selling, general and administrative expenses

(98,709)

 

(6,490)

 

1,833

 

(103,366)

 

Operating (loss) income

(4,494)

 

1,760

 

28

 

(2,706)

Other non operating (expense) income

(21,482)

 

16

 

-

 

(21,466)

 

(Loss) income before income taxes

(25,976)

 

1,776

 

28

 

(24,172)

Income tax expense

(614)

 

(608)

 

-

 

(1,222)

 

Net (loss) income

(26,590)

 

1,168

 

28

 

(25,394)

 

Net income attributable to noncontrolling interest

-

 

(1,168)

 

-

 

(1,168)

 

Net loss attributable to The Gymboree Corporation

$                    (26,590)

 

$                           -

 

$                     28

 

$            (26,562)

                 
                 
   

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 26 Weeks Ended August 1, 2015

   

Balance Before 

           
   

Consolidation

           
   

 of VIEs

 

VIEs*

 

Eliminations

 

As Reported

Net sales

$                   535,033

 

$                  19,692

 

$               (5,191)

 

$         549,534

Cost of goods sold, including buying and occupancy expenses

(340,242)

 

(5,058)

 

1,783

 

(343,517)

 

Gross profit

194,791

 

14,634

 

(3,408)

 

206,017

Selling, general and administrative expenses

(199,697)

 

(11,663)

 

3,284

 

(208,076)

 

Operating (loss) income

(4,906)

 

2,971

 

(124)

 

(2,059)

Other non operating (expense) income

(42,639)

 

6

 

-

 

(42,633)

 

(Loss) income before income taxes

(47,545)

 

2,977

 

(124)

 

(44,692)

Income tax expense

(1,918)

 

(1,264)

 

-

 

(3,182)

 

Net (loss) income

(49,463)

 

1,713

 

(124)

 

(47,874)

 

Net income attributable to noncontrolling interest

-

 

(1,713)

 

-

 

(1,713)

 

Net loss attributable to The Gymboree Corporation

$                    (49,463)

 

$                          -

 

$                  (124)

 

$          (49,587)

                 
                 
   

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)

 

EXHIBIT E (continued)

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING BALANCE SHEETS

(In thousands)

(Unaudited)

                   
     

August 1, 2015

     

Balance Before 

           
     

Consolidation of VIEs

    

VIEs*

    

Eliminations

    

As Reported

Current assets

$                304,808

 

$                   19,769

 

$               (2,240)

 

$           322,337

Non-current assets

916,610

 

4,767

 

-

 

921,377

 

Total assets

$             1,221,418

 

$                   24,536

 

$               (2,240)

 

$        1,243,714

                   

Current liabilities

$                279,221

 

$                   12,373

 

$               (1,942)

 

$           289,652

Non-current liabilities

1,331,588

 

470

 

-

 

1,332,058

 

Total liabilities

1,610,809

 

12,843

 

(1,942)

 

1,621,710

                   

Total stockholders' deficit

(389,391)

 

-

 

(298)

 

(389,689)

Noncontrolling interest

-

 

11,693

 

-

 

11,693

 

Total liabilities and stockholders' deficit

$             1,221,418

 

$                   24,536

 

$               (2,240)

 

$        1,243,714

                   
     

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

                   
     

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

 

                     

*  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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