Brookstone Announces First Quarter 2010 Financial Results

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May 06, 2010, 07:00 ET

MERRIMACK, N.H., May 6 /PRNewswire/ -- Innovative product development company and specialty lifestyle retailer Brookstone, Inc. today announced financial results for the first quarter ended April 3, 2010.

For the 13-week period ended April 3, 2010, Brookstone reported total net sales of $69.7 million, a 13.5% increase from the comparable 13-week period of 2009. Same-store sales increased 14.1% as compared to the comparable 13-week period last year.

For the 13-week period ended April 3, 2010, Brookstone reported a loss from operations of $17.0 million, compared to a loss from operations of $20.8 million for the comparable 13-week period last year.

Ron Boire, Brookstone President and Chief Executive Officer, said, "Our improving results in the first quarter of 2010 allowed us to recoup part of the shortfall in performance we experienced in 2009. We remain focused on the turnaround of the Company."

About Brookstone:

Brookstone, Inc. is an innovative product development and specialty lifestyle retail company that operates 304 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.

Brookstone is principally owned by three sponsors, Osim International, J.W. Childs, and Temasek Holdings. In accordance with the terms governing its publicly-held debt, the Company issues quarterly and annual reports under SEC guidelines.

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)
	April 3, 2010	January 2, 2010	April 4, 2009
	(Unaudited)		(Unaudited)
Assets

Current assets:
Cash and cash equivalents	$ 1,125	$ 31,802	$ 3,671
Receivables, net	7,081	8,159	5,736
Merchandise inventories	79,006	86,428	69,925
Prepaid expenses	12,760	22,210	9,648

Total current assets	99,972	148,599	88,980

Property, plant and equipment, net	50,256	52,925	63,847
Intangible assets, net	105,000	105,000	105,000
Goodwill	99,734	99,734	99,734
Other assets	5,254	5,942	7,823

Total assets	$ 360,216	$ 412,200	$ 365,384

Liabilities and Equity

Current liabilities:
Accounts payable	$ 7,357	$ 23,805	$ 9,812
Other current liabilities	30,671	42,993	30,321

Total current liabilities	38,028	66,798	40,133

Other long-term liabilities	20,673	20,814	21,836
Long-term debt	173,379	173,468	173,934
Deferred income taxes	38,194	38,194	38,020

Total liabilities	270,274	299,274	273,923

Commitments and contingencies	---	---	---

Equity:
Brookstone Shareholder's equity:
Common stock – $0.01 par value 1,000 shares authorized, one share issued and outstanding	---	---	---
Additional paid-in capital	244,259	244,088	241,394
Accumulated other comprehensive loss	(656)	(651)	(537)
Retained deficit	(154,934)	(131,532)	(150,566)
Total Brookstone Shareholder's equity	88,669	111,905	90,291
Noncontrolling interests	1,273	1,021	1,170
Total equity	89,942	112,926	91,461

Total liabilities and equity	$ 360,216	$ 412,200	$ 365,384

BROOKSTONE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands) (Unaudited)
	Thirteen weeks ended
	April 3, 2010	April 4, 2009

Net sales	$ 69,732	$ 61,460

Cost of sales	57,848	54,892

Gross profit	11,884	6,568

Selling, general and administrative expenses	28,930	27,353

Loss from operations	(17,046)	(20,785)

Interest expense, net	6,051	5,979

Loss before income taxes	(23,097)	(26,764)

Income tax provision	187	473

Consolidated net loss	(23,284)	(27,237)

Less: Net income attributable to noncontrolling interests	118	113

Net loss attributable to Brookstone	$ (23,402)	$ (27,350)