Brookstone Announces Third Quarter 2011 Financial Results

MERRIMACK, N.H., Nov. 15, 2011 /PRNewswire/ -- Innovative product development company and specialty lifestyle retailer Brookstone, Inc. today announced financial results for the third quarter ended October 1, 2011.  

For the 13-week period ended October 1, 2011, Brookstone reported total net sales of $78.2 million, a 7.6% increase from the comparable 13-week period of 2010.  Same-store sales increased 4.7% as compared to the comparable 13-week period last year.

For the 13-week period ended October 1, 2011, Brookstone reported a loss from operations of $8.8 million, compared to a loss from operations of $14.1 million for the comparable 13-week period last year.

For the 39-week period ended October 1, 2011, Brookstone reported total net sales of $243.8 million, an 11.4% increase from the 39-week period ended October 2, 2010.  Same-store sales for the 39-week period ended October 1, 2011 increased 8.2% as compared to the comparable 39-week period last year.

For the 39-week period ended October 1, 2011, Brookstone reported a loss from operations of $31.7 million, compared to a loss from operations of $43.6 million for the 39-week period ended October 2, 2010.  

Ron Boire, Brookstone President and Chief Executive Officer, said, "We continue to be encouraged by the improving results in both segments of our business. The third quarter of 2011 marks our eighth consecutive quarter of same-store sales increases in the retail segment, and the eighth 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 upcoming holiday selling season."

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)

(Unaudited)



October 1, 2011


January 1, 2011


October 2, 2010







Assets












Current assets:






   Cash and cash equivalents

$               1,222


$                 32,097


$                  1,341

   Receivables, net

11,147


7,266


6,434

   Merchandise inventories

85,099


96,004


89,899

   Prepaid expenses

9,152


8,950


9,440







       Total current assets

106,620


144,317


107,114







Property, plant and equipment, net

45,917


46,362


47,633

Intangible assets, net

105,000


105,000


105,000

Goodwill

99,734


99,734


99,734

Other assets

4,203


5,386


6,224







Total assets

$           361,474


$               400,799


$              365,705







Liabilities and Shareholder's Equity












Current liabilities:






   Accounts payable

$             30,579


$                 32,836


$                20,285

   Other current liabilities

27,760


44,435


30,176

   Short-term borrowings

29,548


---


32,539

   Deferred income taxes

716


716


762







Total current liabilities

88,603


77,987


83,762







Long-term debt:






   Senior Notes, at face value net of discount

135,169


135,080


169,435

   Concession on 2010 Note Exchange, net

11,203


13,529


---

   Other long-term debt

2,662


3,408


3,567

       Total long-term debt

149,034


152,017


173,002







Other long-term liabilities

17,912


19,604


19,714

Deferred income taxes

37,819


37,819


37,773

Total liabilities

293,368


287,427


314,251







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

266,842


265,485


245,470

Accumulated other comprehensive income (loss)

(1,391)


(1,414)


(665)

Retained deficit

(198,536)


(151,999)


(194,507)

        Total Brookstone Shareholder's equity

66,915


112,072


50,298

Noncontrolling interests

1,191


1,300


1,156

Total equity

68,106


113,372


51,454







Total liabilities and equity

$           361,474


$               400,799


$              365,705




BROOKSTONE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)



Thirteen weeks ended


Thirty-nine weeks ended


October 1,
2011


October 2,
2010


October 1,
2011


October 2,
2010









Net sales

$         78,171


$         72,669


$       243,801


$       218,788









Cost of sales

60,107


58,958


188,466


175,962









Gross profit

18,064


13,711


55,335


42,826









Selling, general and administrative
 expenses


26,851



27,816



          87,037



          86,472









Loss from operations

(8,787)


(14,105)


(31,702)


(43,646)









Interest expense, net

4,524


6,203


13,420


18,399









Loss before income taxes

(13,311)


(20,308)


(45,122)


(62,045)









Income tax provision (benefit)

170


(12)


520


361









Consolidated net loss

(13,481)


(20,296)


(45,642)


(62,406)









Less: Net income attributable to noncontrolling interests


304



216



895



569









Net loss attributable to Brookstone

$       (13,785)


$       (20,512)


$       (46,537)


$       (62,975)




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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