MERRIMACK, N.H., July 25, 2007 -- Innovative product development company and specialty lifestyle retailer Brookstone, Inc. today announced financial results for the second quarter ended June 30, 2007.
For the 13-week period ended June 30, 2007, Brookstone reported total net sales of $99.9 million, a 9.4% increase from the comparable 13-week period of 2006. Same-store sales increased 2.1% as compared to the comparable 13-week period last year.
For the 13-week period ending June 30, 2007 Brookstone reported a loss from continuing operations of $3.6 million, compared to a loss from continuing operations of $6.2 million for the comparable 13-week period last year.
For the 26-week period ended June 30, 2007, Brookstone reported total net sales of $183.1 million, a 8.9% increase from the comparable 26-week period of 2006. Same-store sales increased 5.1% as compared to the comparable 26-week period last year.
For the 26-week period ending June 30, 2007 Brookstone reported a loss from continuing operations of $15.3 million, compared to a loss from continuing operations of $20.8 million for the comparable 26-week period last year.
Brookstone ended the second quarter with approximately $11.9 million in cash and no cash borrowings under its asset-backed lending agreement.
Lou Mancini, Brookstone Chief Executive Officer, said: "We are pleased with our second quarter and year to date results. This quarter marks our fifth consecutive quarter of same-store sales increases. In addition, our Direct to Customer business continues to drive increases in both sales and profitability. Our improved results are due to continuing improvements in our product and selling strategies. In the third 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 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 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. 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
Thirteen-weeks Ended Twenty-six-weeks Ended
-------------------- ----------------------
June 30, July 1, June 30, July 1,
2007 2006 2007 2006
------- ------- -------- --------
Net sales $99,925 $91,322 $183,065 $168,031
Cost of sales 71,362 66,410 135,502 127,351
------- ------- -------- --------
Gross profit 28,563 24,912 47,563 40,680
Selling, general and
administrative
expenses 32,196 31,120 62,868 61,478
------- ------- -------- --------
Loss from continuing
operations (3,633) (6,208) (15,305) (20,798)
Interest expense, net 6,235 6,178 12,166 11,977
------- ------- -------- --------
Loss before taxes,
other party interests
in consolidated
entities and
discontinued operations (9,868) (12,386) (27,471) (32,775)
Other party interests
in consolidated entities 379 359 686 646
------- ------- -------- --------
Loss before taxes and
discontinued operations (10,247) (12,745) (28,157) (33,421)
Income tax benefit (3,855) (1,859) (10,663) (11,513)
Loss on discontinued
operations, net of tax
benefit of $39, $37,
$79 and $173 (70) (76) (141) (318)
------- ------- -------- --------
Net loss $(6,462) $ (10,962) $(17,635) $(22,226)
======= ======== ======== ========
BROOKSTONE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
------------------------ ----------
June 30, Dec. 30, July 1,
2007 2006 2006
---------- -------- ----------
(Unaudited) (Unaudited)
Assets
------
Current assets:
Cash and cash equivalents $ 11,937 $ 71,738 $ 23,604
Receivables, net 8,453 12,472 9,663
Merchandise inventories 99,570 95,253 73,776
Deferred income taxes, net 15,427 3,841 16,704
Prepaid expenses 9,364 7,478 9,003
-------- -------- ---------
Total current assets 144,751 190,782 132,750
Property, plant and equipment,
net 70,170 72,638 74,631
Intangible assets, net 130,896 131,354 131,813
Goodwill 190,329 190,329 192,453
Other assets 14,767 16,080 17,300
-------- -------- ---------
Total assets $550,913 $601,183 $ 548,947
======== ======== =========
Liabilities and Shareholder's
Equity
-----------------------------
Current liabilities:
Accounts payable $ 17,986 $ 23,410 $ 12,562
Other current liabilities 33,694 56,240 41,098
-------- -------- ---------
Total current liabilities 51,680 79,650 53,660
Other long-term liabilities 21,664 20,954 19,700
Long-term debt 189,955 190,253 190,551
Deferred income taxes 45,355 45,317 43,430
Commitments and contingencies -- -- --
Other party interests in
consolidated entities 1,045 1,114 1,296
Shareholder's equity:
Common Stock - $0.01 par value
1,000 shares authorized, one
share issued and outstanding -- -- --
Additional paid-in capital 240,009 245,071 245,310
Accumulated other comprehensive
income 174 158 192
Retained earnings (deficit) 1,031 18,666 (5,192)
-------- -------- ---------
Total shareholder's equity 241,214 263,895 240,310
-------- -------- ---------
Total liabilities and
shareholder's equity $550,913 $601,183 $ 548,947
======== ======== =========