Aeropostale Reports Results for Third Quarter of Fiscal 2015

EXHIBIT A

AÉROPOSTALE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 (In thousands)

October 31,
2015

January 31,
2015

November 1,
2014

(Unaudited)

(Unaudited)

ASSETS

Current Assets:

  Cash and cash equivalents 

$

41,828

$

151,750

$

109,198

  Merchandise inventory 

205,731

130,474

211,136

  Other current assets 

43,699

67,063

57,156

     Total current assets 

291,258

349,287

377,490

Fixtures, equipment and improvements, net 

111,897

130,109

151,196

Goodwill and intangible assets

22,163

22,728

28,016

Other assets 

9,176

10,065

21,622

TOTAL ASSETS 

$

434,494

$

512,189

$

578,324

LIABILITIES AND STOCKHOLDERS' (DEFICIT)
EQUITY

Current Liabilities:

  Accounts payable 

$

157,436

$

88,289

$

143,354

  Accrued expenses 

68,826

110,560

99,319

     Total current liabilities 

226,262

198,849

242,673

Long-term debt

142,822

138,540

136,042

Other non-current liabilities 

81,196

81,248

95,766

Stockholders' (deficit) equity 

(15,786)

93,552

103,843

TOTAL LIABILITIES AND STOCKHOLDERS'
(DEFICIT) EQUITY 

$

434,494

$

512,189

$

578,324

EXHIBIT B

AÉROPOSTALE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

SELECTED STORE DATA

 (In thousands, except per share and store data)

(Unaudited)

13 weeks ended

October 31, 2015

November 1, 2014

% of sales

% of sales

Net sales  

$

363,325

100.0%

$

452,889

100.0%

Cost of sales (including certain buying, occupancy and
warehousing expenses) ⁽¹⁾

288,755

79.5%

384,011

84.8%

Gross profit 

74,570

20.5%

68,878

15.2%

Selling, general and administrative expenses ⁽²⁾

97,732

26.8%

121,250

26.8%

Restructuring (benefit) charges ⁽³⁾

(92)

-

1,713

0.3%

Loss from operations  

(23,070)

(6.3)%

(54,085)

(11.9)%

Interest expense 

3,291

1.0%

3,035

0.7%

Loss before income taxes 

(26,361)

(7.3)%

(57,120)

(12.6)%

Income tax expense (benefit)

2

-

(4,797)

(1.0)%

Net loss

$

(26,363)

(7.3)%

$

(52,323)

(11.6)%

Basic loss per share 

$

(0.33)

$

(0.66)

Diluted loss per share 

$

(0.33)

$

(0.66)

Weighted average basic shares 

79,607

79,015

Weighted average diluted shares 

79,607

79,015

STORE DATA:

Comparable sales change (including e-commerce channel) 

(10)%

(11)%

Stores open at end of period 

824

1,052

Total square footage at end of period 

3,177,494

3,912,039

Average square footage during period 

3,181,127

3,988,975

⁽¹⁾ Cost of sales for the third quarter of 2015 was unfavorably impacted by store asset impairment charges of $2.7 million ($2.7 million after tax, or $0.03 per diluted share).  These charges were offset somewhat by the reversal of previously established store closing cost obligation liabilities of $0.4 million ($0.4 million after tax, or less than $0.01 per diluted share).  Cost of sales for the third quarter of 2014 was unfavorably impacted by asset impairment charges of $12.5 million ($10.9 million after tax, or $0.13 per diluted share) and lease buyout costs of $3.7 million ($3.2 million after tax, or $0.04 per diluted share).

⁽²⁾ Selling, general and administrative expenses for the third quarter of 2015 were impacted by the reversal of a previously established consulting fee liability of $0.4 million ($0.4 million after tax, or less than $0.01 per diluted share). Selling, general and administrative expenses for the third quarter of 2014 was unfavorably impacted by consulting fees of $1.4 million ($1.2 million after tax, or $0.01 per diluted share) and severance costs, net of the reversal of stock-based compensation, of $0.3 million ($0.2 million after tax, or $0.01 per diluted share).

⁽³⁾ Restructuring charges for the third quarter of 2014 included severance and other exit costs of $1.7 million ($1.5 million after tax, or $0.02 per diluted share).      

EXHIBIT C

AÉROPOSTALE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

SELECTED STORE DATA

 (In thousands, except per share and store data)

(Unaudited)

39 weeks ended

October 31, 2015

November 1, 2014

% of sales

% of sales

Net sales  

$

1,008,829

100.0%

$

1,244,902

100.0%

Cost of sales (including certain buying, occupancy and
warehousing expenses) ⁽¹⁾

816,807

81.0%

1,042,977

83.8%

Gross profit 

192,022

19.0%

201,925

16.2%

Selling, general and administrative expenses ⁽²⁾

299,079

29.6%

361,877

29.1%

Restructuring (benefit) charges ⁽³⁾

(6,100)

(0.6)%

39,221

3.1%

Loss from operations  

(100,957)

(10.0)%

(199,173)

(16.0)%

Interest expense 

9,526

1.0%

5,808

0.5%

Loss before income taxes 

(110,483)

(11.0)%

(204,981)

(16.5)%

Income tax expense (benefit) ⁽⁴⁾

4,807

0.4%

(12,057)

(1.0)%

Net loss

$

(115,290)

(11.4)%

$

(192,924)

(15.5)%

Basic loss per share 

$

(1.45)

$

(2.45)

Diluted loss per share 

$

(1.45)

$

(2.45)

Weighted average basic shares 

79,484

78,775

Weighted average diluted shares 

79,484

78,775

STORE DATA:

Comparable sales change (including e-commerce channel) 

(9)%

(12)%

Average square footage during period 

3,234,671

4,028,731

⁽¹⁾ Cost of sales for the first thirty-nine weeks of 2015 was unfavorably impacted by store closing costs of $4.5 million ($4.7 million after tax, or $0.06 per diluted share) and store asset impairment charges of $2.7 million ($2.7 million after tax, or $0.03 per diluted share).  Cost of sales for the thirty-nine weeks of 2014 was unfavorably impacted by asset impairment charges of $34.1 million ($31.9 million after tax, or $0.41 per diluted share) and lease buyout costs of $4.0 million ($3.5 million after tax, or $0.04 per diluted share).

⁽²⁾ Selling, general and administrative expenses for the thirty-nine weeks of 2015 was unfavorably impacted by real estate consulting fees of $1.9 million ($2.0 million after tax, or $0.03 per diluted share) and favorably impacted by a retirement plan settlement adjustment of $1.1 million ($1.1 million after tax, or $0.01 per diluted share).   Selling, general and administrative expenses for the thirty-nine weeks of 2014 was unfavorably impacted by consulting fees of $4.4 million ($4.1 million after tax, or $0.05 per diluted share) and severance costs, net of the reversal of stock-based compensation, of $0.3 million ($0.2 million after tax, or $0.01 per diluted share). 

⁽³⁾ Restructuring charges for the first thirty-nine weeks of 2015 included the benefit of reversals of previously established exit cost obligation liabilities resulting from subsequent lease terminations of $6.1 million ($6.5 million after tax, or $0.09 per diluted share).  Restructuring charges for the first thirty-nine weeks of 2014 included store asset impairment charges of $30.5 million ($29.1 million after tax, or $0.37 per diluted share) and other restructuring charges of $8.7 million ($8.2 million after tax, or $0.10 per diluted share).      

⁽⁴⁾ Income tax benefit for the first thirty-nine weeks of fiscal 2014 was unfavorably impacted by the establishment of reserves against net deferred tax assets of $3.4 million after tax, or $0.04 per diluted share.      

EXHIBIT D

AÉROPOSTALE, INC.

RECONCILIATION OF OPERATING LOSS, NET LOSS AND DILUTED LOSS PER SHARE

(In thousands, except per share data)

(Unaudited)

The following table presents a reconciliation of operating loss, net loss and diluted loss per share on a GAAP basis to the non-GAAP adjusted basis discussed in this release.  

13 weeks ended

October 31, 2015

November 1, 2014

Operating Loss

Net Loss 

Diluted EPS

Operating Loss

Net Loss

Diluted EPS

As reported  

$

(23,070)

$

(26,363)

$

(0.33)

$

(54,085)

$

(52,323)

$

(0.66)

Restructuring charges (benefit) ⁽¹⁾

(92)

(92)

-

1,713

1,500

0.02

Store closing costs

(399)

(399)

(0.01)

-

-

-

Consulting costs

(395)

(395)

(0.01)

1,365

1,195

0.01

Store asset impairment charges 

2,654

2,654

0.03

12,479

10,929

0.13

Lease buyout costs

-

-

-

3,661

3,206

0.04

Severance, net of reversal of stock-

based compensation

-

-

-

281

246

0.01

As adjusted  

$

(21,302)

$

(24,595)

$

(0.31)

$

(34,586)

$

(35,247)

$

(0.45)

39 weeks ended

October 31, 2015

November 1, 2014

Operating Loss

Net Loss 

Diluted EPS

Operating Loss

Net Loss

Diluted EPS

As reported  

$

(100,957)

$

(115,290)

$

(1.45)

$

(199,173)

$

(192,924)

$

(2.45)

Restructuring charges (benefit) ⁽¹⁾

(6,100)

(6,460)

(0.09)

8,724

8,231

0.10

Store closing costs

4,457

4,748

0.06

-

-

-

Consulting costs

1,888

2,025

0.03

4,416

4,124

0.05

Retirement plan settlement adjustment

(1,064)

(1,099)

(0.01)

-

-

-

Store asset impairment charges

2,654

2,654

0.03

64,612

60,977

0.78

Establishment of reserves against 

net deferred tax assets

-

-

-

-

3,440

0.04

Lease buyout costs

-

-

-

3,997

3,529

0.04

Severance, net of reversal of stock-

based compensation

-

-

-

281

246

0.01

As adjusted  

$

(99,122)

$

(113,422)

$

(1.43)

$

(117,143)

$

(112,377)

$

(1.43)

⁽¹⁾ Net of reversal of restructuring liabilities.