Body Central Corp. Announces Third Quarter 2013 Financial Results
October 31 2013 - 4:01PM
Body Central Corp. (Nasdaq:BODY) today announced financial results
for the third quarter of 2013.
Highlights for the thirteen weeks ended September 28,
2013:
- Net revenues for the quarter decreased 10.4% to $60.8 million,
compared to $67.9 million for the third quarter of 2012.
- Store sales decreased 10.1% to $55.7 million due to a
comparable-store sales decrease of 18.3%, partially offset by a net
increase of 28 stores from the same quarter last year.
- Direct sales decreased by 13.6% to $5.1 million from $5.9
million in the same quarter last year.
- The loss from operations was $15.5 million, as compared to
income from operations of $196,000 for the third quarter in
2012.
- The net loss was $9.0 million, or $(0.55) per diluted share
based on 16.4 million weighted average shares outstanding. Net
income for the third quarter of 2012 was $153,000, or $0.01 per
diluted share based on 16.3 million weighted average shares
outstanding.
- The Company opened 5 new stores during the third quarter and
operated 291 stores as of September 28, 2013.
Brian Woolf, Body Central's CEO, stated: "Our third quarter
results reflect the continued difficulty of driving traffic into
our stores and the overall traffic slowdown within our segment.
While our comparable sales decreased 18% for the quarter, we
realized positive comp sales performance in our bottoms and shoe
businesses. In addition, the eCommerce component of our direct
business continues to grow rapidly as we shift our marketing spend
to online traffic drivers such as email campaigns, display ads, and
affiliate programs. During the third quarter, we saw direct
business revenue attributed to eCommerce increase approximately
threefold from prior year levels. We are also confident that our
focus on nightlife and club wear will resonate with our customers
this holiday season. The introduction of our Sexy Stretch line
performed well and we have plans to expand the offering. Our
priorities continue to be to improve merchandise assortments,
customer messaging and store traffic. We are initiating several key
marketing actions during the holiday season to expand our customer
base and reactivate former customers."
Mr. Woolf further stated: "Due to the longer transition period,
we have reduced our corporate staff by 11% effective immediately,
and have initiated other cost cutting measures that will be fully
deployed by year end with the expectation that these initiatives
will reduce our annualized SG&A exposure by $5 million."
In closing, Mr. Woolf said: "We believe our strategic direction
and initiatives will support the re-engagement of our customer base
while driving long-term sales growth and profitability."
Balance Sheet highlights as of September 28,
2013:
Cash, cash equivalents and short-term investments were $20.0
million at the end of the third quarter of 2013 compared to $36.9
million at the end of the third quarter in the prior year.
Average per store inventory at cost decreased 12.4% and average
per store inventory units increased 4.0% from one year ago.
The Company had no long-term debt as of the end of the third
quarter 2013 and 2012.
Reported results are preliminary and remain subject to
adjustment until the filing of our Form 10-Q with the SEC.
Conference Call Information
A conference call to discuss third quarter financial results is
scheduled for today October 31, 2013 at 4:30 PM Eastern Time. The
conference call will also be webcast live at www.bodycentral.com.
To access the replay of this call, please dial (877) 870-5176 and
enter pin number 1108801. The replay is available until November
14, 2013. A replay of this web cast will also be available on the
Investor Relations section of the Company's website,
www.bodycentral.com, within two hours of the conclusion of the call
and will remain on the website for ninety days.
About Body Central
Founded in 1972, Body Central Corp. is a growing, multi-channel,
specialty retailer offering on trend, quality apparel and
accessories at value prices. As of October 31, 2013 the Company
operated 292 specialty apparel stores in 28 states under the Body
Central and Body Shop banners, as well as a direct business
comprised of a Body Central catalog and an e-commerce website at
www.bodycentral.com. The Company targets women in their late teens
to early thirties from diverse cultural backgrounds who seek the
latest fashions and a flattering fit. The Company's stores feature
an assortment of tops, dresses, bottoms, jewelry, accessories and
shoes sold primarily under the Company's exclusive Body Central®
and Lipstick® labels.
Safe Harbor Language
Certain statements in this release are "forward-looking
statements" made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Words such as
"guidance," "expects," "intends," "projects," "plans," "believes,"
"estimates," "targets," "anticipates," and similar expressions are
used to identify these forward-looking statements. Forward-looking
statements are based on our current expectations and assumptions,
which may not prove to be accurate. These statements are not
guarantees and are subject to risks, uncertainties and changes in
circumstances that are difficult to predict. Many factors could
cause actual results to differ materially and adversely from these
forward-looking statements. Among these factors are (1) our ability
to identify and respond to new and changing fashion trends,
customer preferences and other related factors; (2) our ability to
execute successfully our growth strategy; (3) changes in consumer
spending and general economic conditions; (4) changes in the
competitive environment in our industry and the markets we serve,
including increased competition from other retailers; (5) our new
stores or existing stores achieving sales and operating levels
consistent with our expectations; (6) our ability to obtain
financing or to generate sufficient cash flow to support
operations; (7) the success of the malls and shopping centers in
which our stores are located; (8) our dependence on a strong brand
image; (9) our direct business growing consistently with our growth
strategy; (10) our information technology systems supporting our
current and growing business, before and after our planned
upgrades; (11) disruptions to our information systems in the
ordinary course or as a result of systems upgrades; (12) our
dependence upon key executive management or our inability to hire
or retain additional personnel; (13) disruptions in our supply
chain and distribution facility; (14) our lease obligations; (15)
our reliance upon independent third-party transportation providers
for all of our product shipments; (16) hurricanes, natural
disasters, unusually adverse weather conditions, boycotts and
unanticipated events; (17) the seasonality of our business; (18)
increases in costs of fuel, or other energy, transportation or
utilities costs and in the costs of labor and employment; (19) the
impact of governmental laws and regulations and the outcomes of
legal proceedings; (20) our maintaining effective internal
controls; and (21) our ability to protect our trademarks or other
intellectual property rights.
|
|
BODY CENTRAL
CORP. |
NON-GAAP CONSOLIDATED
STATEMENTS OF (LOSS) INCOME (UNAUDITED) |
|
|
|
(ADJUSTED FOR SECOND
QUARTER DIRECT BUSINESS GOODWILL IMPAIRMENT LOSS) |
|
|
|
|
Thirty-Nine Weeks
Ended |
|
September 28, |
September 29, |
|
2013 |
2012 |
|
(In thousands, except share data) |
Net (loss) income, as reported |
$ (19,053) |
$ 9,541 |
Direct business impairment |
10,358 |
— |
Net (loss) income, as adjusted |
$ (8,695) |
$ 9,541 |
Net (loss) income per common share, as
reported: |
|
|
Basic |
$ (1.17) |
$ 0.59 |
Diluted |
$ (1.17) |
$ 0.58 |
Net (loss) income per common share, as
adjusted: |
|
|
Basic |
$ (0.53) |
$ 0.59 |
Diluted |
$ (0.53) |
$ 0.58 |
Weighted-average common shares
outstanding: |
|
|
Basic |
16,318,046 |
16,169,953 |
Diluted |
16,318,046 |
16,350,690 |
|
|
BODY CENTRAL
CORP. |
CONSOLIDATED STATEMENTS
OF (LOSS) INCOME (UNAUDITED) |
|
|
|
|
|
|
Thirteen Weeks
Ended |
Thirty-Nine Weeks
Ended |
|
September 28,
2013 |
September 29,
2012 |
September 28,
2013 |
September 29,
2012 |
|
In Thousands
Except Per Share Data |
Net revenues |
$ 60,833 |
$ 67,920 |
$ 217,383 |
$ 229,956 |
Cost of goods sold, including occupancy,
buying, distribution center and catalog costs |
49,692 |
46,399 |
157,977 |
154,440 |
Gross profit |
11,141 |
21,521 |
59,406 |
75,516 |
Selling, general and administrative
expenses |
24,480 |
19,718 |
69,406 |
55,820 |
Depreciation |
2,154 |
1,607 |
6,438 |
4,469 |
Impairment of long-lived assets |
— |
— |
10,358 |
— |
(Loss) income from
operations |
(15,493) |
196 |
(26,796) |
15,227 |
Interest income, net |
2 |
3 |
11 |
10 |
Other (loss) income, net |
(259) |
45 |
747 |
104 |
(Loss) income before income
taxes |
(15,750) |
244 |
(26,038) |
15,341 |
Benefit (provision) for income taxes |
6,769 |
(91) |
6,985 |
(5,800) |
Net (loss) income |
$ (8,981) |
$ 153 |
$ (19,053) |
$ 9,541 |
|
|
|
|
|
Net (loss) income per common share: |
|
|
|
|
Basic |
$ (0.55) |
$ 0.01 |
$ (1.17) |
$ 0.59 |
Diluted |
$ (0.55) |
$ 0.01 |
$ (1.17) |
$ 0.58 |
Weighted-average common shares
outstanding: |
|
|
|
|
Basic |
16,363,633 |
16,205,845 |
16,318,046 |
16,169,953 |
Diluted |
16,363,633 |
16,305,557 |
16,318,046 |
16,350,690 |
|
|
BODY CENTRAL
CORP. |
CONSOLIDATED BALANCE
SHEETS (UNAUDITED) |
|
|
|
|
September 28,
2013 |
September 29,
2012 |
|
In
Thousands |
Assets |
|
Current assets |
|
|
Cash and cash equivalents |
$ 15,597 |
$ 22,679 |
Short-term investments |
4,356 |
14,265 |
Accounts receivable |
1,479 |
1,536 |
Inventories |
24,464 |
20,860 |
Prepaid expenses and other
current assets |
12,221 |
7,516 |
Deferred tax asset |
3,289 |
2,168 |
Total current assets |
61,406 |
69,024 |
Property and equipment, net of accumulated
depreciation |
40,479 |
30,860 |
Goodwill |
11,150 |
21,508 |
Intangible assets, net of accumulated
amortization |
16,574 |
16,574 |
Other assets |
333 |
108 |
Total assets |
$ 129,942 |
$ 138,074 |
Liabilities and Stockholders'
Equity |
|
|
Current liabilities |
|
|
Merchandise accounts
payable |
$ 10,585 |
$ 8,547 |
Accrued expenses and other
current liabilities |
21,155 |
19,674 |
Total current liabilities |
31,740 |
28,221 |
Other liabilities |
10,167 |
7,900 |
Deferred tax liability |
4,392 |
4,577 |
Total liabilities |
46,299 |
40,698 |
Commitments and contingencies |
|
|
Stockholders' equity |
|
|
Total stockholders' equity |
83,643 |
97,376 |
Total liabilities and
stockholders' equity |
$ 129,942 |
$ 138,074 |
|
|
BODY CENTRAL
CORP. |
CONSOLIDATED STATEMENTS
OF CASH FLOWS (UNAUDITED) |
|
|
|
|
Thirty-Nine Weeks
Ended |
|
September 28,
2013 |
September 29,
2012 |
|
In
Thousands |
Cash flows from operating
activities |
|
|
Net (loss) income |
$ (19,053) |
$ 9,541 |
Adjustments to reconcile net income to net
cash provided by operating activities: |
|
|
Depreciation |
6,438 |
4,469 |
Deferred income taxes |
(2,236) |
137 |
Excess tax benefits from
stock-based compensation |
(39) |
(751) |
Stock-based compensation |
2,061 |
1,473 |
Amortization of premiums and
discounts on investments, net |
147 |
263 |
Loss on disposal of property
and equipment |
422 |
82 |
Impairment of long-lived
assets |
10,358 |
— |
Changes in assets and
liabilities: |
|
|
Accounts receivable |
3,231 |
1,071 |
Inventories |
(1,493) |
281 |
Prepaid expenses and other
assets |
(5,342) |
(490) |
Merchandise accounts
payable |
(3,130) |
(7,951) |
Accrued expenses and other
current liabilities |
362 |
(1,626) |
Other liabilities |
(380) |
732 |
Net cash (used in) provided by
operating activities |
(8,654) |
7,231 |
Cash flows from investing
activities |
|
|
Proceeds from sale of property and
equipment |
-- |
29 |
Purchases of property and equipment |
(12,709) |
(13,158) |
Purchases of intangible assets |
— |
(179) |
Purchases of short-term investments |
(12,786) |
(24,582) |
Proceeds from sales of short-term
investments |
2,310 |
1,051 |
Proceeds from maturities of short-term
investments |
5,973 |
9,000 |
Net cash used in investing
activities |
(17,212) |
(27,839) |
Cash flows from financing
activities |
|
|
Proceeds from exercise of stock options |
327 |
543 |
Excess tax benefits from stock-based
compensation |
— |
751 |
Net cash provided by financing
activities |
327 |
1,294 |
Net decrease in cash and cash
equivalents |
(25,539) |
(19,314) |
Cash and cash
equivalents |
|
|
Beginning of year |
41,136 |
41,993 |
End of period |
$ 15,597 |
$ 22,679 |
CONTACT: Tom Stoltz
Chief Operating Officer and Chief Financial Officer
904-207-6720
tstoltz@bodyc.com