MERRIMACK, N.H., April 25, 2007 -- Innovative product development company and specialty lifestyle retailer Brookstone, Inc. today announced financial results for the first quarter ended March 31, 2007.
For the 13-week period ended March 31, 2007, Brookstone reported total net sales of $83.1 million, an 8.4% increase from the comparable 13-week period ended April 1, 2006. Same-store sales increased 9.2 percent from the comparable 13-week period ending April 1, 2006.
For the 13-week period ending March 31, 2007 Brookstone reported a loss from continuing operations of $11.7 million, compared to a loss from continuing operations of $14.6 million for the comparable 13-week period ending April 1, 2006.
Brookstone ended the first quarter with approximately $30.8 million in cash and no cash borrowings under our asset-backed lending agreement.
Lou Mancini, Brookstone Chief Executive Officer, said: "We are pleased with our first quarter 2007 results and our continuing trend of same-store sales increases. Our improved results are due to the introduction of new and innovative products as well as our continued execution of our sales incentive strategy. In the second quarter, we will continue to launch new merchandise, including exclusive OSIM healthy lifestyle products, which we believe will continue to contribute positively to our performance."
Brookstone, Inc. is an innovative product development and specialty lifestyle retail company that operates 306 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 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 filed with the Securities and Exchange Commission. Words such as "estimate", "project", "plan", "believe", "feel", "anticipate", "assume", "may", "will", "should" and similar words and phrases may identify forward-looking statements. Statements about a possible sale or divestiture of its Gardeners Eden business constitute forward-looking statements. The Company may not be able to complete a divestiture on acceptable terms because of a number of factors, including failure to reach agreement with a purchaser. 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited) (Unaudited)
----------- ----------- ----------
March 31, December 30, April 1,
2007 2006 2006
----------- ----------- ----------
Assets
Current assets:
Cash and cash
equivalents $ 30,794 $ 71,738 $ 38,202
Receivables, net 8,416 12,472 9,920
Merchandise
inventories 99,238 95,253 76,650
Deferred income
taxes, net 11,432 3,841 14,790
Prepaid expenses 6,674 7,478 6,233
-------- -------- --------
Total current
assets 156,554 190,782 145,795
Property, plant and
equipment, net 70,790 72,638 75,045
Intangible assets, net 131,125 131,354 132,042
Goodwill 190,329 190,329 192,453
Other assets 16,756 16,080 20,248
-------- -------- --------
Total assets $565,554 $601,183 $565,583
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Liabilities and
Shareholder's Equity
Current liabilities:
Accounts payable $ 14,822 $ 23,410 $ 12,733
Other current
liabilities 40,001 56,240 42,883
-------- -------- --------
Total current
liabilities 54,823 80,037 55,616
Other long-term
liabilities 21,439 20,954 19,232
Long-term debt 190,037 190,253 190,700
Deferred income taxes 45,335 45,317 43,397
Other party interests
in consolidated entities 1,256 1,114 1,259
Total shareholder's
equity 252,664 263,895 255,379
-------- -------- --------
Total liabilities
and shareholder's
equity $565,554 $601,183 $565,583
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BROOKSTONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
-------------- --------------
Thirteen-Weeks Thirteen-Weeks
Ended Ended
March 31, 2007 April 1, 2006
-------------- --------------
Net sales $ 83,140 $ 76,709
Cost of sales 64,140 60,941
-------- --------
Gross profit 19,000 15,768
Selling, general and
administrative expenses 30,671 30,358
-------- --------
Loss from continuing
operations (11,671) (14,590)
Interest expense, net 5,931 5,799
-------- --------
Loss before taxes, other
party interests in
consolidated entities and
discontinued operations (17,602) (20,389)
Other party interests in
consolidated entities 308 287
-------- --------
Loss before taxes and
discontinued operations (17,910) (20,676)
Income tax benefit (6,808) (9,654)
Loss on discontinued
operations, net of income
tax benefit (71) (242)
-------- --------
Net loss $(11,173) $(11,264)
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