Brookstone Announces Second Quarter 2011 Financial Results

MERRIMACK, N.H., Aug. 16, 2011 /PRNewswire/ -- Innovative product development company and specialty lifestyle retailer Brookstone, Inc. today announced financial results for the second quarter ended July 2, 2011.  

For the 13-week period ended July 2, 2011, Brookstone reported total net sales of $85.5 million, a 12.0% increase from the comparable 13-week period of 2010.  Same-store sales increased 9.8% as compared to the comparable 13-week period last year.

For the 13-week period ended July 2, 2011, Brookstone reported a loss from operations of $8.6 million, compared to a loss from operations of $12.5 million for the comparable 13-week period last year.

For the 26-week period ended July 2, 2011, Brookstone reported total net sales of $165.6 million, a 13.4% increase from the 26-week period ended July 3, 2010.  Same-store sales for the 26-week period ended July 2, 2011 increased 10.0% as compared to the comparable 26-week period last year.

For the 26-week period ended July 2, 2011, Brookstone reported a loss from operations of $22.9 million, compared to a loss from operations of $29.5 million for the 26-week period ended July 3, 2010.  

Ron Boire, Brookstone President and Chief Executive Officer, said, "We are encouraged by the improving results in both segments of our business. The second quarter of 2011 marks our seventh consecutive quarter of same-store sales increases in the retail segment, and the seventh consecutive quarter the direct segment has generated increased sales over the comparable quarter of the previous year.  This positive trend reflects an expanding product assortment in our direct segment and improved selling efforts in our retail stores.  We believe that Brookstone is well-positioned for the remainder of 2011."

About Brookstone:  

Brookstone, Inc. is an innovative product development and specialty lifestyle retail company that operates approximately 300 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)



July 2, 2011


January 1, 2011


July 3, 2010


(Unaudited)




(Unaudited)

Assets












Current assets:






   Cash and cash equivalents

$             1,384


$                 32,097


$             1,253

   Receivables, net

10,658


7,266


6,543

   Merchandise inventories

73,635


96,004


72,392

   Prepaid expenses

7,267


8,950


8,261







       Total current assets

92,944


144,317


88,449







Property, plant and equipment, net

45,923


46,362


48,821

Intangible assets, net

105,000


105,000


105,000

Goodwill

99,734


99,734


99,734

Other assets

4,580


5,386


6,830

       Total assets

$         348,181


$               400,799


$         348,834







Liabilities and Shareholder's Equity












Current liabilities:






   Accounts payable

$            15,347


$                 32,836


$           13,207

   Other current liabilities

31,618


44,435


25,493

   Short-term borrowings

12,069


---


6,819

   Deferred income taxes

716


716


762







       Total current liabilities

59,750


77,987


46,281







Long-term debt:






   Senior Notes, at face value net of discount

135,139


135,080


169,364

   Concession on 2010 Note Exchange, net

11,999


13,529


---

   Other long-term debt

2,889


3,408


3,793

       Total long-term debt

150,027


152,017


173,157







Other long-term liabilities

18,492


19,604


20,086

Deferred income taxes

37,819


37,819


37,773

       Total liabilities

266,088


287,427


277,297







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

266,824


265,485


245,277

Accumulated other comprehensive loss

(1,399)


(1,414)


(664)

Retained deficit

(184,750)


(151,999)


(173,995)

        Total Brookstone Shareholder's equity

80,675


112,072


70,618

Noncontrolling interests

1,418


1,300


919

       Total equity

82,093


113,372


71,537







       Total liabilities and equity

$          348,181


$               400,799


$         348,834




BROOKSTONE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)



Thirteen weeks ended


Twenty-six weeks ended


July 2, 2011


July 3, 2010


July 2, 2011


July 3, 2010









Net sales

$       85,535


$       76,388


$     165,631


$     146,120









Cost of sales

64,088


59,157


128,359


117,005









Gross profit

21,447


17,231


37,272


29,115









Selling, general and administrative
 expenses

30,012


29,725


60,185


58,656









Loss from operations

(8,565)


(12,494)


(22,913)


(29,541)









Interest expense, net

4,471


6,146


8,896


12,196









Loss before income taxes

(13,036)


(18,640)


(31,809)


(41,737)









Income tax provision

229


186


351


373









Consolidated net loss

(13,265)


(18,826)


(32,160)


(42,110)









Less: Net income attributable to non-
 controlling interests

351


235


591


353









Net loss attributable to Brookstone

$      (13,616)


$      (19,061)


$      (32,751)


$      (42,463)




Contact:

Thomas F. Moynihan
Vice President and Chief Financial Officer
(603) 880-9500

SOURCE Brookstone, Inc.



RELATED LINKS
http://www.brookstone.com

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