The Gymboree Corporation Reports Third Quarter Fiscal 2015 Results

Dec 10, 2015, 16:01 ET from The Gymboree Corporation

SAN FRANCISCO, Dec. 10, 2015 /PRNewswire/ -- The Gymboree Corporation (the "Company") today reported consolidated financial results for the third fiscal quarter ended October 31, 2015.

  • Comparable sales (including online sales) decreased 3% during the third quarter of fiscal 2015
  • Net Sales of $305.4 million, a decrease of 3.6% compared to the third quarter of fiscal 2014
  • Adjusted EBITDA was $28.2 million for the third quarter of fiscal 2015 compared to $29.8 million for the third quarter of fiscal 2014, a decrease of 5.2%

"While our business in the third quarter was challenging, we are encouraged by our performance to date in the fourth quarter," said Mark Breitbard, Chief Executive Officer.  "Our quarter to date comparable retail sales are up mid-single digits, and while we continue to expect our Adjusted EBITDA to be in the range of $95 million to $105 million, we believe the lower half of the range is the more likely outcome."

Third Quarter Results (13-weeks ended October 31, 2015 versus 13-weeks ended November 1, 2014)

  • Comparable sales (including online sales) decreased 3%;
  • Net sales were $305.4 million, a decrease of 3.6% compared to $316.8 million in the third quarter of fiscal 2014, which was primarily driven by a decrease in Gymboree brand net sales;
  • Gross profit was $122.8 million, or 40.2% of net sales, compared to $125.9 million, or 39.7% of net sales, for the third quarter of fiscal 2014;
  • Adjusted gross profit was $124.5 million, or 40.7% of net sales, compared to $127.7 million, or 40.3% of net sales, for the third quarter of fiscal 2014, an increase of 40 basis points;
  • SG&A expense was $108.6 million, or 35.5% of net sales, compared to $113.7 million, or 35.9% of net sales, in the third quarter of fiscal 2014.  The $5.1 million decrease in SG&A expense was primarily driven by a decrease in expenses due to store closures and reduction in asset impairment charges for under-performing stores, partially offset by an increase in marketing expenses; 
  • Adjusted SG&A expense was $105.7 million, or 34.6% of net sales, compared to $111.4 million, or 35.2% of net sales, in the third quarter of fiscal 2014;
  • Adjusted EBITDA, defined as net loss attributable to The Gymboree Corporation before interest, income taxes and depreciation and amortization, adjusted for other items as described below, was $28.2 million compared to $29.8 million for the third quarter of fiscal 2014, a decrease of $1.6 million or 5.2%;
  • Net loss attributable to The Gymboree Corporation for the quarter was $10.0 million compared to $522.1 million for the same quarter of fiscal 2014. The third fiscal quarter of 2014 included a $591.4 million non-cash goodwill and intangible asset impairment charge. 

Adjusted EBITDA, Adjusted gross profit and Adjusted SG&A expense are not financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). For a description of Adjusted EBITDA and a reconciliation of these measures to GAAP measures, see "Non-GAAP Financial Measures" below and Exhibit D of this press release.

Net Sales Results for the 13 weeks and 39 weeks ended October 31, 2015

For the 13 weeks and 39 weeks ended October 31, 2015, Gymboree's consolidated net sales were $305.4 million and $855.0 million, respectively, compared to the same prior year period of $316.8 million and $853.1 million, respectively.  On a constant currency basis, net sales decreased by $2.5 million and $5.0 million for the 13 weeks and 39 weeks ended October 31, 2015, respectively, compared to the same prior year period of $314.3 million and $848.1 million, respectively.  In calculating net sales on a constant currency basis, average current period foreign exchange rates are applied to both current period and prior period net sales. The Company provides net sales on a constant currency basis to help investors assess sales trends, excluding the impact of foreign currency exchange rate fluctuations.

The following table details the Company's net retail sales for the 13 weeks and 39 weeks ended October 31, 2015 in order to help investors further assess sales trends:

 




 Net Retail Sales










Total








Gymboree


Janie and Jack


Crazy 8


Before VIE


VIE


Total

13 Weeks Ended October 31, 2015

$            186,423


$              33,600


$              67,825


$            287,848


$                1,805


$            289,653

13 Weeks Ended November 1, 2014

$            202,558


$              32,242


$              68,366


$            303,166


$                1,099


$            304,265















39 Weeks Ended October 31, 2015

$            508,390


$            101,251


$            193,440


$            803,081


$                5,295


$            808,376

39 Weeks Ended November 1, 2014

$            531,152


$              93,144


$            188,591


$            812,887


$                3,878


$            816,765

 

Balance Sheet Highlights

  • As of the end of the third quarter of fiscal 2015, there were $50.0 million in borrowings outstanding under the Company's $225 million asset-backed loan facility and approximately $142.3 million of undrawn availability after being reduced by letters of credit of $32.7 million.  As previously announced, on September 24, 2015, the Company amended its asset-backed loan facility to, among other things, extend the maturity date and provide for the incurrence of asset-backed term loans under the facility in an amount not to exceed $75 million, subject to a borrowing base.
  • Capital expenditures were $5.1 million during the third quarter of fiscal 2015.
  • Inventory balances at the end of the third quarter of fiscal 2015 were $265.4 million, compared to $259.3 million at the end of the third quarter of fiscal 2014. On a per square foot basis, inventory cost was up 4% over the third quarter of fiscal 2014.  Inventory units were up on a low double digit percentage basis. 

Fiscal 2015 Business Outlook

The Company's fiscal 2015 outlook is based on current economic environment trends, as well as management expectations for the remainder of the year.

For the full year, the Company expects Adjusted EBITDA will likely be in the lower half of the previously announced range of $95 million to $105 million, which includes the net impact to Adjusted EBITDA of approximately $11 million resulting from the west coast port slowdown in the first half of the year. Based on this guidance, the Company expects to have sufficient liquidity during fiscal 2015 to service its debt and invest in the business to drive long-term growth.

Stores

During fiscal 2015, the Company continues to plan to open approximately 13 stores and expects to close approximately 30 to 40 stores.

Capital Expenditures

During fiscal 2015, the Company now anticipates spending approximately $20 million to $25 million for capital expenditures.

Non-GAAP Financial Measures

The Company defines "Adjusted EBITDA" as net loss attributable to The Gymboree Corporation before interest, income taxes, and depreciation and amortization ("EBITDA") adjusted for other items including, non-cash share-based compensation, loss on disposal/impairment of assets and sponsor management fees and expenses, as well as the impact of purchase accounting adjustments resulting from the Acquisition and other non-recurring or unusual items.  The Company is likely to exclude these items from Adjusted EBITDA in the future and may also exclude other similar items, the effect of which is uncertain but may be significant in amount.  The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts.

Adjusted EBITDA is a non-GAAP measure but is considered an important supplemental measure of the Company's performance and is believed to be used frequently by securities analysts, investors and other interested parties in the evaluation of similar retail companies. Adjusted EBITDA is not a presentation made in accordance with GAAP and the Company's computation of Adjusted EBITDA may vary from others in the industry. Adjusted EBITDA should not be considered an alternative to operating income or net income, as a measure of operating performance or cash flow, or as a measure of liquidity. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP (see Exhibit D for a reconciliation of Adjusted EBITDA to net loss attributable to The Gymboree Corporation).

The live broadcast of the discussion of third quarter fiscal 2015 financial results and fiscal 2015 business outlook will be available to interested parties at 2:00 p.m. PT (5:00 p.m. ET) on Thursday, December 10, 2015. To listen to the live broadcast over the internet, please log on to www.gymboree.com, click on "Company Information" at the bottom of the page; go to "Investor & Media" and then "Conference Calls & Webcasts." A replay of the call will be available two hours after the broadcast through midnight PT, December 24, 2015, at 855-859-2056, passcode 70524600.

About The Gymboree Corporation

The Gymboree Corporation's specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of October 31, 2015, the Company operated a total of 1,315 retail stores: 598 Gymboree® stores (549 in the United States, 48 in Canada and 1 in Puerto Rico), 175 Gymboree Outlet stores (174 in the United States and 1 in Puerto Rico), 152 Janie and Jack® shops (151 in the United States and 1 in Puerto Rico), and 390 Crazy 8® stores in the United States. The Company also operates online stores at www.gymboree.com, www.janieandjack.com and www.crazy8.com, and offers directed parent-child developmental play programs at 720 franchised and Company-operated Gymboree Play & Music® centers in the United States and 42 other countries.

Gymboree, Janie and Jack, Crazy 8 and Gymboree Play & Music are registered trademarks of The Gymboree Corporation. 

Forward-Looking Statements

The foregoing financial information for the third quarter of fiscal 2015 and fourth quarter to date is unaudited and subject to quarter-end and year-end adjustments. The fourth quarter to date comparable retail sales reflect sales through December 8, 2015 and should not be relied upon as an indicator of our results for the fourth quarter of fiscal 2015.  This press release includes forward-looking statements, including statements relating to The Gymboree Corporation's anticipated future financial performance, liquidity and capital resources, especially those set forth under the heading "Fiscal 2015 Business Outlook". These forward-looking statements generally can be identified by the use of words such as "anticipate," "expect," "plan," "could," "may," "will," "believe," "estimate," "forecast," "goal," "project," and other words of similar meaning. Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. The Company presently considers the following risks and uncertainties to be important factors that could cause actual results to differ materially from the Company's expectations: the disruptions in the west coast ports, ongoing volatility in the commodities markets, uncertainties relating to high levels of consumer debt and general economic conditions, volatility in the financial markets, potential data breaches of the Company's or the Company's vendors or suppliers computer networks, the Company's dependence on the holiday season, particularly the month of December, to sell a significant portion of its existing inventory, which may be affected by weather, spending patterns, promotional activity, terrorist activity or other security threats or perceived threats impacting store traffic and other factors, the Company's ability to anticipate and timely respond to changes in trends, consumer preferences and customer reactions to new merchandise (particularly given the Company's need to build up inventory significantly in advance of potential product sales), competitive market conditions, including promotional activities of the Company's competitors, success in meeting the Company's delivery targets, gross margin achievement, the Company's ability to appropriately manage inventory, effects of future embargos from countries used to source product, the Company's ability to attract and retain key personnel and other qualified team members, the limited data available in the future upon which to base its expectations for stabilizing sales trends, and other factors, including those discussed under "Risk Factors" in "Item 1A. Risk Factors," of the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2015, filed with the Securities and Exchange Commission ("SEC") on May 1, 2015. The Company cautions investors to carefully consider the risks associated with, and not to place considerable reliance on, the forward-looking statements contained in this press release. The forward-looking statements in this press release speak only as of the date of this document, and the Company undertakes no obligation to update or revise any of these statements.

Gymboree, Janie and Jack, Crazy 8, and Gymboree Play & Music are registered trademarks of The Gymboree Corporation.

 

EXHIBIT A

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)






















13 Weeks Ended



39 Weeks Ended







October 31, 2015



November 1, 2014



October 31, 2015



November 1, 2014



Net sales:















Retail



$            289,653



$            304,265



$            808,376



$            816,765



Gymboree Play & Music 



9,921



7,744



30,236



21,895



Retail Franchise



5,867



4,810



16,363



14,472




Total net sales



305,441



316,819



854,975



853,132



Cost of goods sold, including buying and occupancy expenses


(182,660)



(190,898)



(526,177)



(522,489)




Gross profit



122,781



125,921



328,798



330,643



Selling, general and administrative expenses



(108,566)



(113,679)



(316,642)



(323,109)



Goodwill and intangible asset impairment



-



(591,396)



-



(591,396)




Operating income (loss)



14,215



(579,154)



12,156



(583,862)



Interest income



38



42



80



157



Interest expense



(21,906)



(20,768)



(64,613)



(61,597)



Other expense, net



(170)



(19)



(138)



(521)




Loss before income taxes



(7,823)



(599,899)



(52,515)



(645,823)



Income tax (expense) benefit



(1,829)



77,505



(5,011)



75,573




Net loss



(9,652)



(522,394)



(57,526)



(570,250)




Net (income) loss attributable to noncontrolling interest



(376)



319



(2,089)



3,591




Net loss attributable to The Gymboree Corporation


$             (10,028)



$           (522,075)



$             (59,615)



$           (566,659)


 

EXHIBIT B

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)


















October 31,



January 31,



November 1







2015



2015



2014



ASSETS












Current assets:













Cash and cash equivalents



$             24,277



$             18,520



$             20,828




Accounts receivable



22,487



25,248



23,377




Merchandise inventories



265,409



198,337



259,266




Prepaid income taxes



2,577



2,599



2,715




Prepaid expenses



7,402



6,821



21,090




Deferred income taxes



7,053



6,824



9,182




    Total current assets



329,205



258,349



336,458
















Property and equipment, net



166,660



182,431



191,175



Goodwill



373,408



373,834



375,345



Other intangible assets, net



341,585



343,552



344,829



Deferred financing costs



22,489



25,622



27,338



Restricted cash




4,535



-



-



Other assets



4,117



4,155



8,866

















    Total assets



$        1,241,999



$        1,187,943



$        1,284,011





























LIABILITIES AND STOCKHOLDERS' DEFICIT












Current liabilities:













Accounts payable



$           132,523



$             87,032



$           146,066




Accrued liabilities



115,286



94,805



108,334




Line of credit borrowings



50,000



33,000



42,000




Current obligation under capital lease



591



552



539




    Total current liabilities



298,400



215,389



296,939
















Long-term liabilities:













Long-term debt



1,114,288



1,114,048



1,113,970




Long-term sale-leaseback financing liability



26,462



-



-




Long-term obligation under capital lease



2,402



2,850



2,993




Lease incentives and other liabilities



50,992



53,677



54,129




Unrecognized tax benefits



6,114



5,048



6,186




Deferred income taxes



129,808



129,196



131,137




    Total liabilities



1,628,466



1,520,208



1,605,354
















Stockholders' deficit



(386,467)



(332,265)



(321,343)

















Total liabilities and stockholders' deficit



$        1,241,999



$        1,187,943



$        1,284,011
















 

EXHIBIT C

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)














39 Weeks Ended






October 31, 2015



November 1, 2014


CASH FLOWS FROM OPERATING ACTIVITIES:







Net loss



$              (57,526)


$

(570,250)


Adjustments to reconcile net loss to net cash used in operating activities:








Goodwill and intangible asset impairment


-



591,396



Depreciation and amortization


30,868



33,469



Amortization of deferred financing costs and accretion of original issue discount


5,948



5,345



Interest rate cap contracts - adjustment to market


2,737



1,441



Loss on disposal/impairment of assets


438



6,089



Deferred income taxes


260



(79,214)



Share-based compensation expense


2,665



3,389



Other



(907)



(106)



Change in assets and liabilities:








Accounts receivable


4,476



(1,507)



Merchandise inventories


(67,669)



(84,093)



Prepaid income taxes


8



(744)



Prepaid expenses and other assets


(377)



630



Accounts payable


45,516



44,115



Accrued liabilities


17,529



8,237



Lease incentives and other liabilities


(304)



5,304



Net cash used in operating activities


(16,338)



(36,499)











CASH FLOWS FROM INVESTING ACTIVITIES:







Capital expenditures


(12,576)



(24,372)


Increase in restricted cash


(10,863)



-


Decrease in restricted cash


6,328



-


Increase in related party loan receivable


(1,741)



-


Proceeds from sale of assets


353



-


Other



33



(45)



Net cash used in investing activities


(18,466)



(24,417)











CASH FLOWS FROM FINANCING ACTIVITIES:







Proceeds from ABL facility


390,000



300,000


Payments on ABL facility


(373,000)



(258,000)


Proceeds from sale-leaseback financing liability


26,750



-


Payments on capital lease and sale-leaseback financing liability


(497)



(373)


Payments for deferred financing costs


(2,574)



-


Dividend payment to parent


(11)



(84)


Capital contribution received by noncontrolling interest


-



992



Net cash provided by financing activities


40,668



42,535


Effect of exchange rate fluctuations on cash and cash equivalents


(107)



(220)


Net increase (decrease) in cash and cash equivalents


5,757



(18,601)


CASH AND CASH EQUIVALENTS:







Beginning of period


18,520



39,429


End of period



$                24,277



$                20,828


 

EXHIBIT D

THE GYMBOREE CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands)

(Unaudited)











ADJUSTED EBITDA:










The Company defines "Adjusted EBITDA" as net income (loss) attributable to The Gymboree Corporation before interest expense, interest income, income tax expense/benefit, and depreciation and amortization ("EBITDA") adjusted for other items, including non-cash share-based compensation, loss on disposal/impairment of assets, sponsor management fees and expenses, as well as the impact of purchase accounting adjustments resulting from the acquisition of the Company by investment funds sponsored by Bain Capital Partners, LLC (the "Acquisition"), non-recurring and unusual items.

Adjusted EBITDA is not a performance measure under U.S. generally accepted accounting principles ("GAAP"), but is considered an important supplemental measure of the Company's performance and is believed to be used frequently by securities analysts, investors and other interested parties in the evaluation of similar retail companies. Adjusted EBITDA is not a presentation made in accordance with GAAP and the Company's computation of Adjusted EBITDA may vary from others in the industry. Adjusted EBITDA should not be considered an alternative to operating income or net income, as a measure of operating performance or cash flow, or as a measure of liquidity. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP.

The table below provides a reconciliation of net loss attributable to The Gymboree Corporation to Adjusted EBITDA:














13 Weeks Ended


39 Weeks Ended




October 31, 2015


November 1, 2014


October 31, 2015


November 1, 2014












Net loss attributable to The Gymboree Corporation


$                (10,028)


$              (522,075)


$                (59,615)


$              (566,659)


Reconciling items (a):










Interest expense 


21,906


20,768


64,613


61,597


Interest income 


(6)


(14)


(23)


(80)


Income tax expense (benefit)


951


(78,023)


2,869


(76,633)


Depreciation and amortization (b)


9,705


10,477


29,813


32,281


Non-cash share-based compensation expense 


813


1,120


2,665


3,389


Loss on disposal/impairment on assets


332


2,186


874


6,041


Loss on modification of ABL facility


201


-


201


-


Goodwill and intangible asset impairment


-


591,396


-


591,396


Acquisition-related adjustments (c)


2,563


2,771


8,564


8,678


Other (d)


1,801


1,181


4,938


1,369


Adjusted EBITDA


$                  28,238


$                  29,787


$                  54,899


$                  61,379












(a) Excludes amounts related to noncontrolling interest, which are already excluded from net loss attributable to The Gymboree Corporation.




















(b) Includes the following:










Amortization of intangible assets (impacts SG&A)


$                       384


$                       384


$                    1,151


$                    1,151


Amortization of below and above market leases (impacts COGS)


(198)


(237)


(546)


(724)




$                       186


$                       147


$                       605


$                       427












(c) Includes the following:










Additional rent expense recognized due to the elimination of deferred rent and construction allowances in purchase accounting (impacts COGS)


$                    1,879


$                    2,058


$                    5,646


$                    6,189


Sponsor fees, legal and accounting, as well as other costs incurred as a result of the Acquisition or refinancing (impacts SG&A)


684


713


2,918


2,489




$                    2,563


$                    2,771


$                    8,564


$                    8,678












(d) Other is comprised of restructuring charges and non-recurring changes in reserves.




















OTHER NON-GAAP FINANCIAL MEASURES:






















13 Weeks Ended


39 Weeks Ended




October 31, 2015


November 1, 2014


October 31, 2015


November 1, 2014












Gross profit as reported


$                122,781


$                125,921


$                328,798


$                330,643


Acquisition-related adjustments


1,681


1,821


5,100


5,465


Adjusted gross profit excluding Acquisition-related adjustments (non-GAAP measure)


$                124,462


$                127,742


$                333,898


$                336,108
























13 Weeks Ended


39 Weeks Ended




October 31, 2015


November 1, 2014


October 31, 2015


November 1, 2014












SG&A as reported


$              (108,566)


$              (113,679)


$              (316,642)


$              (323,109)


Acquisition-related adjustments


1,068


1,097


4,069


3,640


Other adjustments


1,801


1,181


4,938


1,369




2,869


2,278


9,007


5,009


Adjusted SG&A excluding Acquisition-related and other adjustments (non-GAAP measure)


$              (105,697)


$              (111,401)


$              (307,635)


$              (318,100)


 

EXHIBIT E

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)













For the 13 Weeks Ended October 31, 2015




Balance Before 










Consolidation










 of VIEs


VIEs*


Eliminations


As Reported


Net sales

$                 297,895


$                     9,917


$                    (2,371)


$                 305,441


Cost of goods sold, including buying and occupancy expenses

(180,276)


(3,087)


703


(182,660)



Gross profit

117,619


6,830


(1,668)


122,781


Selling, general and administrative expenses

(104,633)


(5,627)


1,694


(108,566)



Operating income

12,986


1,203


26


14,215


Other non-operating (expense) income

(22,089)


51


-


(22,038)



(Loss) income before income taxes

(9,103)


1,254


26


(7,823)


Income tax expense

(951)


(878)


-


(1,829)



Net (loss) income

(10,054)


376


26


(9,652)



Net income attributable to noncontrolling interest

-


(376)


-


(376)



Net loss attributable to The Gymboree Corporation

$                  (10,054)


$                           -


$                          26


$                  (10,028)
























For the 13 Weeks Ended November 1, 2014




Balance Before 










Consolidation










 of VIEs


VIEs*


Eliminations


As Reported


Net sales

$                 312,258


$                     6,055


$                    (1,494)


$                 316,819


Cost of goods sold, including buying and occupancy expenses

(189,729)


(1,561)


392


(190,898)



Gross profit

122,529


4,494


(1,102)


125,921


Selling, general and administrative expenses

(701,854)


(4,322)


1,101


(705,075)



Operating (loss) income

(579,325)


172


(1)


(579,154)


Other non-operating (expense) income

(20,772)


27


-


(20,745)



(Loss) income before income taxes

(600,097)


199


(1)


(599,899)


Income tax benefit (expense)

78,023


(518)


-


77,505



Net loss

(522,074)


(319)


(1)


(522,394)



Net loss attributable to noncontrolling interest

-


319


-


319



Net loss attributable to The Gymboree Corporation

$                (522,074)


$                           -


$                           (1)


$                (522,075)
























For the 39 Weeks Ended October 31, 2015




Balance Before 










Consolidation










 of VIEs


VIEs*


Eliminations


As Reported


Net sales

$                 832,928


$                   29,609


$                    (7,562)


$                 854,975


Cost of goods sold, including buying and occupancy expenses

(520,518)


(8,145)


2,486


(526,177)



Gross profit

312,410


21,464


(5,076)


328,798


Selling, general and administrative expenses

(304,330)


(17,290)


4,978


(316,642)



Operating income

8,080


4,174


(98)


12,156


Other non-operating (expense) income

(64,728)


57


-


(64,671)



(Loss) income before income taxes

(56,648)


4,231


(98)


(52,515)


Income tax expense

(2,869)


(2,142)


-


(5,011)



Net (loss) income

(59,517)


2,089


(98)


(57,526)



Net income attributable to noncontrolling interest

-


(2,089)


-


(2,089)



Net loss attributable to The Gymboree Corporation

$                  (59,517)


$                           -


$                         (98)


$                  (59,615)
























For the 39 Weeks Ended November 1, 2014




Balance Before 










Consolidation










 of VIEs


VIEs*


Eliminations


As Reported


Net sales

$                 840,794


$                   17,705


$                    (5,367)


$                 853,132


Cost of goods sold, including buying and occupancy expenses

(518,426)


(4,874)


811


(522,489)



Gross profit

322,368


12,831


(4,556)


330,643


Selling, general and administrative expenses

(903,695)


(15,356)


4,546


(914,505)



Operating loss

(581,327)


(2,525)


(10)


(583,862)


Other non-operating expense

(61,955)


(6)


-


(61,961)



Loss before income taxes

(643,282)


(2,531)


(10)


(645,823)


Income tax benefit (expense)

76,633


(1,060)


-


75,573



Net loss

(566,649)


(3,591)


(10)


(570,250)



Net loss attributable to noncontrolling interest

-


3,591


-


3,591



Net loss attributable to The Gymboree Corporation

$                (566,649)


$                           -


$                         (10)


$                (566,659)


 


EXHIBIT E (continued)

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING BALANCE SHEETS

(In thousands)

(Unaudited)















October 31, 2015





Balance Before 











Consolidation of VIEs


VIEs*


Eliminations


As Reported


Current assets

$                     309,963


$                        21,203


$                    (1,961)


$               329,205


Non-current assets

908,163


4,631


-


912,794



Total assets

$                  1,218,126


$                        25,834


$                    (1,961)


$            1,241,999













Current liabilities

$                     286,632


$                        13,451


$                    (1,683)


$               298,400


Non-current liabilities

1,329,555


511


-


1,330,066



Total liabilities

1,616,187


13,962


(1,683)


1,628,466













Total stockholders' deficit

(398,061)


-


(278)


(398,339)


Noncontrolling interest

-


11,872


-


11,872



Total liabilities and stockholders' deficit

$                  1,218,126


$                        25,834


$                    (1,961)


$            1,241,999
















January 31, 2015





Balance Before 











Consolidation of VIEs


VIEs*


Eliminations


As Reported


Current assets

$                     243,682


$                        16,222


$                    (1,555)


$               258,349


Non-current assets

924,367


5,227


-


929,594



Total assets

$                  1,168,049


$                        21,449


$                    (1,555)


$            1,187,943













Current liabilities

$                     205,674


$                        11,088


$                    (1,373)


$               215,389


Non-current liabilities

1,304,384


435


-


1,304,819



Total liabilities

1,510,058


11,523


(1,373)


1,520,208













Total stockholders' deficit

(342,009)


-


(182)


(342,191)


Noncontrolling interest

-


9,926


-


9,926



Total liabilities and stockholders' deficit

$                  1,168,049


$                        21,449


$                    (1,555)


$            1,187,943
















November 1, 2014





Balance Before 











Consolidation of VIEs


VIEs*


Eliminations


As Reported


Current assets

$                     321,144


$                        16,636


$                    (1,322)


$               336,458


Non-current assets

942,208


5,345


-


947,553



Total assets

$                  1,263,352


$                        21,981


$                    (1,322)


$            1,284,011













Current liabilities

$                     289,155


$                          8,959


$                    (1,175)


$               296,939


Non-current liabilities

1,307,985


430


-


1,308,415



Total liabilities

1,597,140


9,389


(1,175)


1,605,354













Total stockholders' deficit

(333,788)


-


(147)


(333,935)


Noncontrolling interest

-


12,592


-


12,592



Total liabilities and stockholders' deficit

$                  1,263,352


$                        21,981


$                    (1,322)


$            1,284,011













*  The Variable Interest Entities ("VIEs") include the results of Gymboree (China) Commercial and Trading Co. Ltd. and Gymboree (Tianjin) Educational Information Consultation Co. Ltd.  While the Company does not control these two entities, they have been determined to be variable interest entities and their results have been consolidated by the Company.

 

SOURCE The Gymboree Corporation



RELATED LINKS

http://www.gymboree.com