MERRIMACK, N.H. October 22, 2008 -- Innovative product development company and specialty lifestyle retailer Brookstone, Inc. today announced financial results for the third quarter and year-to-date ended September 27, 2008.
For the 13-week period ended September 27, 2008, Brookstone reported total net sales of $89.5 million, a 2.0% decrease from the comparable 13-week period of 2007. Same-store sales decreased 5.9% as compared to the comparable 13-week period last year.
For the 13-week period ended September 27, 2008, Brookstone reported a net loss of $10.4 million, compared to a net loss of $10.2 million for the comparable 13-week period last year.
For the 39-week period ended September 27, 2008, Brookstone reported total net sales of $276.7 million, a 0.8% increase from the comparable 39-week period of 2007. Same-store sales decreased 3.2% as compared to the comparable 39-week period last year.
For the 39-week period ended September 27, 2008, Brookstone reported a net loss of $30.8 million, compared to a net loss of $27.8 million for the comparable 39-week period last year.
Cash borrowings under the Company's $125 million revolving credit facility at the end of the third quarter were $23.1 million, as compared to $25.0 million at the end of the third quarter of 2007.
Lou Mancini, Brookstone Chief Executive Officer, said: "We believe our sales in the third quarter were affected by many of the negative factors rippling through the entire economy. We were pleased however, that we were able to mitigate much of this impact on the bottom line through expense reductions. With the exit of our closest competitor from dedicated retail outlets and direct marketing channels, there should be a significant opportunity to build on our market leadership through more new product introductions including OSIM healthy lifestyle products and self-use products such as the anti-snore pillow. We believe we are well positioned from a product and inventory position for the fourth quarter."
Brookstone, Inc. is an innovative product development and specialty lifestyle retail company that operates 312 Brookstone Brand stores nationwide and in Puerto Rico. Typically located in high-traffic regional shopping malls and airports, the stores feature unique and innovative consumer products. The Company also operates a Direct Marketing business that includes the Brookstone catalog and an e-commerce website at http://www.brookstone.com.
Statements in this release which are not historical facts, including statements about the Company's confidence or expectations, earnings, anticipated operations of its e-commerce sites and those of third-party service providers, and other statements about the Company's operational outlook are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 ("Reform Act") and are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties include, without limitation, risks of changing market conditions in the overall economy and the retail industry, consumer demand, the effectiveness of e-commerce technology and marketing efforts, availability of products, availability of adequate transportation of such products, and other factors detailed from time to time in the Company's annual and other reports posted to the Company's website. Words such as "estimate", "project", "plan", "believe", "feel", "anticipate", "assume", "may", "will", "should" and similar words and phrases may identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligations to publicly release any revisions to these forward-looking statements or reflect events or circumstances after the date hereof.
BROOKSTONE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
----------------------------------
Sept 27, Dec 29, Sept 29,
2008 2007 2007
----------- -------- -----------
(Unaudited) (Unaudited)
Assets
Current assets:
Cash and cash equivalents $1,680 $70,857 $1,489
Receivables, net 9,811 12,816 7,890
Merchandise inventories 110,919 106,400 120,824
Deferred income taxes, net 23,429 4,166 21,860
Prepaid expenses 9,749 4,020 16,669
------- ------- -------
Total current assets 155,588 198,259 168,732
Property, plant and equipment, net 72,224 71,918 70,449
Intangible assets, net 129,000 129,500 130,666
Goodwill 189,524 189,524 189,524
Other assets 9,470 11,834 12,806
------- ------- -------
Total assets $555,806 $601,035 $572,177
======== ======== ========
Liabilities and Shareholder's Equity
Current liabilities:
Accounts payable $24,155 $33,599 $29,420
Other current liabilities 34,271 61,214 34,543
Short-term borrowings 23,050 --- 25,000
------- ------- -------
Total current liabilities 81,476 94,813 88,963
Other long-term liabilities 19,691 21,137 21,073
Long-term debt, net of current portion 174,311 174,777 185,343
Deferred income taxes 43,258 42,999 44,522
Commitments and contingencies
Other party interests in consolidated
entities 1,230 1,250 1,127
Shareholder's equity:
Common Stock - $0.01 par value 1,000
shares authorized, one share issued
and outstanding --- --- ---
Additional paid-in capital 240,996 240,380 240,169
Accumulated other comprehensive income 572 593 140
Retained earnings (deficit) (5,728) 25,086 (9,160)
------- ------- -------
Total shareholder's equity 235,840 266,059 231,149
------- ------- -------
Total liabilities and shareholder's
equity $555,806 $601,035 $572,177
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BROOKSTONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
Thirteen Thirty-nine
weeks ended weeks ended
-------------------- --------------------
Sept 27, Sept 29, Sept 27, Sept 29,
2008 2007 2008 2007
--------- --------- --------- ---------
Net sales $89,471 $91,309 $276,662 $274,374
Cost of sales 68,614 67,941 207,506 203,444
------- ------- ------- -------
Gross profit 20,857 23,368 69,156 70,930
Selling, general and
administrative expenses 31,361 32,755 100,328 95,621
------- ------- ------- -------
Loss from operations (10,504) (9,387) (31,172) (24,691)
Loss on early
extinguishment of debt --- 123 --- 123
Interest expense, net 6,076 6,575 17,600 18,741
------- ------- ------- -------
Loss before taxes, other
party interests in
consolidated entities
and discontinued operations (16,580) (16,085) (48,772) (43,555)
Other party interests in
consolidated entities 308 330 944 1,017
------- ------- ------- -------
Loss before taxes and
discontinued operations (16,888) (16,415) (49,716) (44,572)
Income tax benefit (6,467) (6,292) (18,902) (16,954)
Loss on discontinued
operations, net of tax
benefit --- (68) --- (208)
------- ------- ------- -------
Net loss $(10,421) $(10,191) $(30,814) $(27,826)
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