Brookstone Reports 45% Increase in Fiscal Year 2011 EBITDA - Fiscal Year 2011 Net Sales increased 6.1% to $496.8 million

- Company debt refinanced with Wells Fargo Bank and extended to July 2014

- Innovative product launches including Accessories for iPad®, Big Blue Audio™ and App Controlled Vehicles highlighted a productive year of proprietary product launches

MERRIMACK, N.H., March 28, 2012 /PRNewswire/ -- Innovative product development company and multi-channel lifestyle retailer Brookstone, Inc. announced today that, for the fiscal year ended December 31, 2011, net sales increased 6.1% to $496.8 million and EBITDA increased 44.6% to $23.3 million from the comparable period last year.  

Net sales in the Retail channel increased $2.5 million or approximately 1% to $372.4 million and same-store sales increased 2.5% as compared to fiscal year 2010. These increases were due in part to improved selling efforts at our retail stores, offset by a net decrease in the number of stores from 307 to 294. For the same period, net sales in our e-Commerce channel increased 9.6% to $96.8 million, primarily due to revenue growth in our on-line marketplace initiative.  Net sales in the Alternative Distribution channel, which includes our wholesale business, rose 175.9% to $27.6 million.  

For the fourth quarter ended December 31, 2011, Brookstone reported that net sales increased 1.4% to $253.0 million and EBITDA decreased 5.1% to $47.8 million as compared to the fourth quarter of 2010.  

Net sales in the Retail channel for the period decreased 6.1% to $175.7 million, including a decrease of 3.1% in same-store sales.  Net sales in the e-Commerce channel increased 9.4% to $62.7 million and net sales in the Alternative Distribution channel increased 198.3% to $14.5 million.  

Jim Speltz, Brookstone's Chief Operating Officer, said:  "Despite the uncertainty and negative tone of the economy throughout 2011, we were able to realize improvements in our business, including an expansion of our product assortment in our e-Commerce segment, improved product assortment and selling efforts in our retail stores, and increased sales to our wholesale and corporate partners. We are especially pleased with the performance of certain products such as our high quality accessories for iPad tablet, our line of proprietary massagers and our Big Blue Audio Bluetooth® enabled speakers. Our improving net sales results provide us with optimism for 2012 as we continue to invest in strategic growth initiatives to drive our long-term success in each of our business segments."

Tom Moynihan, Brookstone's Chief Financial Officer, said: "We continued our debt restructuring efforts that began with the 2010 Note Exchange by completely retiring in January 2012 the balance of our outstanding 12% Unsecured Notes due October 2012, which will improve cash flows through reduced interest payments. This initiative, along with our previously announced new senior credit facility with Wells Fargo Bank entered into at the end of 2011, and the Company's program to improve performance, strengthen the Company's financial structure."  Moynihan added: "We ended the year with approximately $30.1 million in cash and approximately $45.8 million of availability under our credit facility. Additionally, our inventories at the end of the year were managed down by approximately $7.1 million or 7.4% from last year.  We believe that our debt restructuring efforts and the current level and quality of our merchandise assortment position the Company favorably for continued growth."  

Non-GAAP Financial Information

EBITDA is a measure used by management to evaluate the Company's ongoing operations and as a general indicator of the Company's operating cash flow. The Company defines EBITDA as net income, plus interest expense, provision for income taxes, and depreciation and amortization. Management believes EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the comparative evaluation of companies. Because not all companies use identical calculations, the Company's presentation of EBITDA may not be comparable to similarly titled measures of other companies. EBITDA is not a recognized term under GAAP and does not purport to be an alternative to either net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow for management's discretionary use as it does not reflect certain cash requirements such as interest payments, tax payments and debt service requirements. We have provided a reconciliation of EBITDA to GAAP net income below:


Brookstone, Inc.  

Reconciliation of Net Income (Loss) to Earnings Before Interest,

Taxes, and Depreciation and Amortization (EBITDA)

(In thousands)

(Unaudited)




For the fourth quarter ended


For the fiscal year ended



December 31,
2011


January 1,
2011


December 31,
2011


January 1,
2011

Net income (loss)


$    39,255


$    42,507


$    (7,281)


$  (20,467)

Interest expense


6,302


5,409


19,723


23,809

Income tax provision (benefit)


(383)


120


136


481

Depreciation and Amortization


2,617


2,320


10,745


12,311

EBITDA


$    47,791


$    50,356


$    23,323


$     16,134




Brookstone, Inc. is an innovative product development and specialty lifestyle retail company that currently operates 284 Brookstone branded 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 an e-Commerce channel that includes the Brookstone catalog and the Brookstone website at http://www.brookstone.com as well as an alternative distribution channel that includes sales to select resellers and corporate partners.  

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 for share data)


(Unaudited)






December 31, 2011


January 1, 2011

Assets:





Current assets:





Cash and cash equivalents

$                30,051


$                32,097


Receivables, less allowances for doubtful accounts of $507 at

December 31, 2011 and $257 at January 1, 2011

13,298


7,266


Merchandise inventories

88,936


96,004


Prepaid expenses

8,603


8,950


  Total current assets

140,888


144,317







Property, plant and equipment, net

45,441


46,362


Intangible assets

105,000


105,000


Goodwill

99,734


99,734


Other assets

2,661


5,386


  Total assets

$              393,724


$              400,799






Liabilities and Shareholder's Equity





Current liabilities:





Accounts payable

$               32,073


$               32,836


Other current liabilities

49,141


43,531


Current portion of long-term debt

10,828


904


Deferred income taxes

469


716


  Total current liabilities

92,511


77,987







Long-term debt:





  Senior Notes, at face value net of discount

125,275


135,080


  Concession on 2010 Note Exchange, net

10,401


13,529


  Other long-term debt

2,503


3,408


      Total long-term debt

138,179


152,017







Other long term liabilities

18,757


19,604


Deferred income taxes

38,066


37,819


  Total liabilities

287,513


287,427







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

266,827


265,485


Accumulated other comprehensive loss

(2,717)


(1,414)


Retained deficit

(159,280)


(151,999)


  Total Brookstone Shareholder's equity

104,830


112,072


Noncontrolling interests

1,381


1,300


  Total equity

106,211


113,372


  Total liabilities and equity

$            393,724


$            400,799




BROOKSTONE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)




Thirteen weeks ended


Thirteen weeks ended


December 31, 2011


January 1, 2011





Net sales

$               252,965


$               249,402





Cost of sales

151,165


143,291





Gross profit

101,800


106,111





Selling, general and administrative expenses

56,337


57,745





Income from operations

45,463


48,366





Interest expense, net

6,302


5,409





Income before taxes

39,161


42,957





Income tax provision (benefit)

(383)


120





Consolidated net income

39,544


42,837





Less: Net income attributable to noncontrolling interests

289


330





Net income attributable to Brookstone, Inc.

$                 39,255


$                 42,507








BROOKSTONE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)








Fifty-two weeks ended


Fifty-two weeks ended


December 31, 2011


January 1, 2011





Net sales

$           496,766


$               468,191





Cost of sales

339,631


319,254





Gross profit

157,135


148,937





Selling, general and administrative expenses

143,374


144,216





Income from operations

13,761


4,721





Interest expense, net

19,722


23,808





Loss before taxes

(5,961)


(19,087)





Income tax provision

136


481





Consolidated net loss

(6,097)


(19,568)





Less: Net income attributable to noncontrolling interests

1,184


899





Net loss attributable to Brookstone, Inc.

$             (7,281)


$               (20,467)








Contact:

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

SOURCE Brookstone, Inc.



RELATED LINKS
http://www.brookstone.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.