Body Central Corp. Announces Fourth Quarter 2013 Financial Results
March 25 2014 - 4:22PM
Body Central Corp. (Nasdaq:BODY) today announced financial results
for the fourth quarter of 2013.
Highlights for the thirteen weeks ended December 28,
2013:
- Net revenues for the quarter decreased 18.3% to $66.2 million,
compared to $81.0 million for the fourth quarter of 2012.
- Store sales decreased 19.5% to $59.4 million due to a
comparable-store sales decrease of 26.0%, partially offset by a net
increase of 18 stores from the fourth quarter last year.
- Direct sales decreased by 6.9% to $6.7 million from $7.2
million in the fourth quarter last year.
- The loss from operations was $26.6 million, as compared to
income from operations of $3.9 million for the fourth quarter in
2012.
- The net loss was $23.3 million, or $(1.42) per diluted share
based on 16.4 million weighted average shares outstanding. This
includes an $11.1 million, or $(0.68) per diluted share, goodwill
impairment charge related to the stores operating segment.
Excluding the $11.1 million goodwill impairment charge, the net
loss would have been $12.1 million, or $(0.74) per diluted share.
Net income for the fourth quarter of 2012 was $2.4 million, or
$0.15 per diluted share based on 16.3 million weighted average
shares outstanding.
- The Company opened 3 new stores during the fourth quarter of
2013 and operated 294 stores as of December 28, 2013.
- These results have had a negative impact on our liquidity. As a
result, we have taken several actions to increase our liquidity
which we believe should be adequate to finance our working capital
needs through 2014, if we are successful in executing our business
plan. However, the Company has suffered losses and negative cash
flows from operations that raise substantial doubt about our
ability to continue as a going concern.
Brian Woolf, Body Central's CEO, stated: "Our fourth quarter
results reflect challenges facing the Company as we work to improve
our store and direct business merchandising assortments and drive
traffic. We remain focused on executing our strategy and serving
our customers amid a difficult environment. We currently have
approximately $20.1 million of cash (including $12 million drawn as
a term loan under our asset-based loan facility) and up to an
additional $5 million under the undrawn, asset-based revolving loan
facility, and we are taking additional actions intended to improve
liquidity through the balance of 2014."
Mr. Woolf adds: "We are pleased to have announced the early
February 2014 closing of our asset-based loan facility with a total
commitment of $17 million. This expanded line will provide
increased flexibility to flow merchandise to our stores and support
marketing and operational initiatives that we believe can drive
future sales increases, better margins and improved cash
flows. In addition to our expanded line of credit facility, we
are taking measures which, if successful, will provide more
liquidity. These measures include additional corporate and
other administrative headcount reductions, the deferral of
non-essential capital projects, and the pursuit of additional
sale-leaseback financing arrangements for previously incurred
capital projects."
Mr. Woolf concluded by stating: "While not reflected in the
overall results yet, we believe we have moved forward with the
business transformation that positions us for improving
results."
Balance Sheet highlights as of December 28,
2013:
Cash and cash equivalents were $16.5 million at the end of the
fourth quarter of 2013 compared to $41.1 million at the end of the
fourth quarter of 2012.
Average per store inventory at cost decreased 18.9% and average
per store inventory units decreased 10% from one year ago.
Reported results are preliminary and remain subject to
adjustment until the filing of our Form 10-K with the SEC.
Conference Call Information
A conference call to discuss fourth quarter and fiscal year-end
financial results is scheduled for today March 25, 2014 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 7998129. The replay
is available until April 8, 2014. 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 multi-channel,
specialty retailer offering on trend, quality apparel and
accessories at value prices. As of March 14, 2014 the Company
operated 282 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 mid-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®, Sexy Stretch® and Lipstick Lingerie® 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 generate sufficient cash flows to support operations or
to obtain financing; (2) our ability to identify and respond to
changing fashion trends, customer preferences and other related
factors; (3) our ability to execute successfully our growth
strategy; (4) changes in consumer spending and general
economic conditions; (5) changes in the competitive
environment in our industry and the markets we serve, including
increased competition from other retailers; (6) our new stores
or existing stores achieving sales and operating levels consistent
with our expectations; (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 GOODWILL
IMPAIRMENT LOSS) |
|
|
|
|
|
|
Thirteen Weeks Ended |
Fiscal Year Ended |
|
December 28, |
December 29, |
December 28, |
December 29, |
|
2013 |
2012 |
2013 |
2012 |
|
(In thousands, except share data) |
(In thousands, except share data) |
Net (loss) income, as reported |
$ (23,257) |
$ 2,406 |
$ (42,310) |
$ 11,947 |
Impairment of goodwill |
11,150 |
— |
21,508 |
— |
Net (loss) income, as adjusted |
$ (12,107) |
$ 2,406 |
$ (20,802) |
$ 11,947 |
Net (loss) income per common share, as
reported: |
|
|
|
|
Basic |
$ (1.42) |
$ 0.15 |
$ (2.59) |
$ 0.74 |
Diluted |
$ (1.42) |
$ 0.15 |
$ (2.59) |
$ 0.73 |
Net (loss) income per common share, as
adjusted: |
|
|
|
|
Basic |
$ (0.74) |
$ 0.15 |
$ (1.27) |
$ 0.74 |
Diluted |
$ (0.74) |
$ 0.15 |
$ (1.27) |
$ 0.73 |
Weighted-average common shares
outstanding: |
|
|
|
|
Basic |
16,366,016 |
16,240,458 |
16,337,959 |
16,187,530 |
Diluted |
16,366,016 |
16,312,796 |
16,337,959 |
16,342,859 |
|
|
|
|
|
|
|
|
|
|
BODY CENTRAL
CORP. |
CONSOLIDATED STATEMENTS
OF (LOSS) INCOME |
|
|
|
|
|
|
Thirteen Weeks Ended |
Fiscal Year Ended |
|
December 28, |
December 29, |
December 28, |
December 29, |
|
2013 |
2012 |
2013 |
2012 |
|
(In Thousands Except
Per Share Data) |
Net revenues |
$ 66,177 |
$ 81,002 |
$ 283,560 |
$ 310,958 |
Cost of goods sold, including occupancy,
buying, distribution center and catalog costs |
52,820 |
56,473 |
210,797 |
210,913 |
Gross profit |
13,357 |
24,529 |
72,763 |
100,045 |
Selling, general and administrative
expenses |
25,498 |
18,830 |
94,904 |
74,650 |
Depreciation and amortization |
2,337 |
1,804 |
8,775 |
6,273 |
Impairment of depreciable long-lived
assets |
933 |
— |
933 |
— |
Impairment of goodwill |
11,150 |
— |
21,508 |
— |
(Loss) income from
operations |
(26,561) |
3,895 |
(53,357) |
19,122 |
Interest (expense) income, net |
(37) |
(3) |
(26) |
7 |
Other income, net |
278 |
101 |
1,025 |
205 |
(Loss) income before income
taxes |
(26,320) |
3,993 |
(52,358) |
19,334 |
Benefit from (provision for) income
taxes |
3,063 |
(1,587) |
10,048 |
(7,387) |
Net (loss) income |
$ (23,257) |
$ 2,406 |
$ (42,310) |
$ 11,947 |
|
|
|
|
|
Net (loss) income per common share: |
|
|
|
|
Basic |
$ (1.42) |
$ 0.15 |
$ (2.59) |
$ 0.74 |
Diluted |
$ (1.42) |
$ 0.15 |
$ (2.59) |
$ 0.73 |
Weighted-average common shares
outstanding: |
|
|
|
|
Basic |
16,366,016 |
16,240,458 |
16,337,959 |
16,187,530 |
Diluted |
16,366,016 |
16,312,796 |
16,337,959 |
16,342,859 |
|
|
|
|
|
|
|
|
|
|
BODY CENTRAL
CORP. |
CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
For
the Fiscal Years Ended |
|
December 28, |
December 29, |
|
2013 |
2012 |
|
(In
Thousands) |
Assets |
|
|
Current assets |
|
|
Cash and cash equivalents |
$ 16,513 |
$ 41,136 |
Accounts receivable |
2,803 |
4,710 |
Inventories |
18,807 |
22,971 |
Income tax receivable |
14,802 |
2,214 |
Prepaid expenses and other
current assets |
2,055 |
4,752 |
Deferred tax asset |
3,323 |
1,959 |
Total current
assets |
58,303 |
77,742 |
Property and equipment, net of accumulated
depreciation |
45,732 |
33,515 |
Goodwill |
— |
21,508 |
Intangible assets, net of accumulated
amortization |
16,574 |
16,574 |
Other assets |
353 |
246 |
Total assets |
$ 120,962 |
$ 149,585 |
Liabilities and Stockholders'
Equity |
|
|
Current liabilities |
|
|
Merchandise accounts
payable |
8,972 |
13,715 |
Accrued expenses and other
current liabilities |
24,623 |
19,732 |
Financing obligation,
sale-leaseback, current portion |
737 |
— |
Total current liabilities |
34,332 |
33,447 |
Other liabilities |
11,358 |
10,494 |
Financing obligation, sale-leaseback, net of
current portion |
2,369 |
— |
Notes payable |
5,000 |
— |
Deferred tax liability |
6,913 |
5,298 |
Total liabilities |
59,972 |
49,239 |
Commitments and contingencies |
|
|
Stockholders' equity |
|
|
Total stockholders' equity |
60,990 |
100,346 |
Total liabilities and
stockholders' equity |
$ 120,962 |
$ 149,585 |
|
|
|
|
|
|
BODY CENTRAL
CORP. |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
|
|
Fiscal Year Ended |
|
December 28, |
December 29, |
|
2013 |
2012 |
|
(in
thousands) |
Cash flows from operating
activities |
|
|
Net (loss) income |
$ (42,310) |
$ 11,947 |
Adjustments to reconcile net income to net
cash provided by operating activities: |
|
|
Depreciation |
8,775 |
6,273 |
Deferred income taxes |
(2,785) |
1,067 |
Deferred tax asset valuation
allowance |
3,019 |
— |
Excess tax benefit from
stock-based compensation |
— |
(757) |
Stock-based compensation |
2,666 |
2,028 |
Amortization of premiums and
discounts on investments |
184 |
460 |
Loss on disposal of property
and equipment |
454 |
84 |
Impairment of depreciable
long-lived assets |
933 |
— |
Impairment of goodwill |
21,508 |
— |
Loss on short-term
investments |
2 |
4 |
Changes in assets and
liabilities: |
|
|
Accounts
receivable |
1,907 |
(2,103) |
Inventories |
4,164 |
(1,830) |
Prepaid expenses
and other assets |
2,593 |
(599) |
Merchandise
accounts payable |
(4,743) |
(2,783) |
Accrued expenses
and other current liabilities |
1,730 |
933 |
Income taxes |
(12,587) |
(1,457) |
Other
liabilities |
866 |
2,905 |
Net
cash (used in) provided by operating activities |
(13,624) |
16,172 |
Cash flows from investing
activities |
|
|
Purchases of property and equipment |
(17,751) |
(17,714) |
Proceeds from sale of property and
equipment |
— |
29 |
Purchases of short-term investments |
(12,897) |
(25,104) |
Proceeds from sales of short-term
investments |
6,133 |
10,880 |
Proceeds from maturities of short-term
investments |
6,578 |
13,760 |
Purchases of intangible assets |
— |
(179) |
Net cash used in investing
activities |
(17,937) |
(18,328) |
Cash flows from financing
activities |
|
|
Proceeds from sale-leaseback transaction |
1,665 |
— |
Payments on sale-leaseback transaction |
(54) |
— |
Proceeds from borrowing on line of
credit |
5,000 |
— |
Proceeds from exercise of stock options |
327 |
542 |
Excess tax benefit from stock-based
compensation |
— |
757 |
Net cash provided by financing
activities |
6,938 |
1,299 |
Net decrease in cash and cash
equivalents |
(24,623) |
(857) |
Cash and cash
equivalents |
|
|
Beginning of year |
41,136 |
41,993 |
End of period |
$ 16,513 |
$ 41,136 |
|
|
|
CONTACT: Tom Stoltz
Chief Operating Officer and Chief Financial Officer
904-207-6720
tstoltz@bodyc.com