FOR IMMEDIATE RELEASE:
| Investor Relations contact: | |
| Marc Passalacqua | |
| Tel: 415-278-7933 | |
| investor_relations@gymboree.com | |
| Media Relations contact: | |
| Tel: 415-278-7493 | |
| media_relations@gymboree.com |
The Gymboree Corporation Reports Third Quarter 2013 Results
San Francisco, Calif., December 12, 2013 – The Gymboree Corporation (the “Company”) today reported consolidated financial results for its quarter ended November 2, 2013.
Net sales for the quarter were $309.8 million, a decrease of 0.5% compared to $311.5 million in net sales for the same quarter last year. Comparable sales for the quarter decreased 4% versus the same quarter last year.
Gross profit for the quarter was $123.5 million, or 39.8% of net sales, compared to $125.6 million, or 40.3% of net sales, for the same quarter last year. Excluding purchase accounting adjustments of $2.6 million and $3.1 million for the third quarter of this year and last year, respectively, relating to the November 2010 acquisition of the Company by Giraffe Holding, Inc., an entity majority-owned by investment funds sponsored by Bain Capital Partners, LLC (the “Acquisition”), gross profit was $126.0 million, or 40.7% of net sales, and $128.7 million, or 41.3% of net sales, for the third quarter of this year and last year, respectively (see Exhibit D).
SG&A expense for the quarter was $111.2 million, or 35.9% of net sales, compared to $99.0 million, or 31.8% of net sales, in the same quarter last year. Results for the third quarter of this year and last year include $2.1 million and $5.3 million, respectively, of additional costs resulting from the Acquisition, including the effect of purchase accounting adjustments, and other adjustments. Excluding these expenses, SG&A expense for the third quarter of this year and last year was $109.1 million, or 35.2% of net sales, and $93.8 million, or 30.1% of net sales, respectively (see Exhibit D).
Net loss for the quarter was $24.4 million compared to net income of $4.9 million for the same quarter last year.
Net loss attributable to The Gymboree Corporation before interest, income taxes and depreciation and amortization, adjusted for other items (“Adjusted EBITDA”), decreased 27.7% to $33.9 million for the quarter compared to $46.9 million for the same quarter last year. Adjusted EBITDA is not a performance measure under GAAP. See “Non-GAAP Financial Measures” below. A reconciliation of net income (loss) attributable to The Gymboree Corporation to Adjusted EBITDA presented herein is included in Exhibit D of this press release.
Balance Sheet Highlights
There were $24.0 million in borrowings outstanding under the ABL as of the end of the quarter and approximately $165.9 million of undrawn availability.
Cash at the end of the quarter was $19.1 million compared to $42.6 million at the end of the same quarter last year, reflecting the pay down of approximately $25 million of the term loan and the repurchase of $54.0 million in notes since the end of the third quarter last year.
Capital expenditures for the fiscal year to date were $35.2 million, with the majority of the cash used to fund the opening of 70 new stores during the year.
Inventory balances at the end of the quarter were $222.4 million compared to $255.7 million at the end of the same quarter last year. Compared to the same quarter last year, inventory cost on a per square foot basis was down 20% this quarter, while inventory units on a per square foot basis were down mid teens in the quarter.
Fiscal 2013 Business Outlook
Full Year
For the fiscal year ending February 1, 2014, the Company now expects Adjusted EBITDA to be in the range of $125 million to $130 million. Comparable sales are now expected to be down mid single digits compared to last year. Based on this guidance, the Company still expects to generate sufficient cash flow to service its debt and invest in the business to drive long term growth.
New Stores
The Company plans to open approximately 85 new stores during the fiscal year, with the majority being Crazy 8 stores.
Capital Expenditures
The Company anticipates capital expenditures of approximately $50 million during the fiscal year.
Non-GAAP Financial Measures
The Company defines "Adjusted EBITDA" as net income (loss) attributable to The Gymboree Corporation before interest (income) expense, income tax expense (benefit), and depreciation and amortization ("EBITDA") adjusted for other items, including loss on extinguishment of debt, 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.
Adjusted EBITDA is a non-GAAP measure but is considered an important supplemental measure of the Company's performance and is believed to be frequently used 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.
Webcast and Conference Call Information
The Gymboree Corporation will host a conference call to discuss its third quarter fiscal 2013 results today at 1:00 p.m. Pacific Time/4:00 p.m. Eastern Time. To listen live over the internet, please log on to www.gymboree.com, click on "Company Information" at the bottom of the page, go to "Investors & Media" and then "Conference Calls & Webcasts." A replay of the call will be available two hours after the broadcast through midnight PT, Thursday, December 19, 2013, at 855-859-2056, passcode 10055574.
About The Gymboree Corporation
The Gymboree Corporation’s specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of November 2, 2013, the Company operated a total of 1,319 retail stores: 633 Gymboree® stores (583 in the United States, 43 in Canada, 1 in Puerto Rico and 6 in Australia), 164 Gymboree Outlet stores (162 in the United States and 2 in Puerto Rico), 139 Janie and Jack® shops and 383 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 708 franchised and Company-operated Gymboree Play & Music® centers in the United States and
41 other countries.
Forward-Looking Statements
The foregoing financial information for the third fiscal quarter ended November 2, 2013 is unaudited and subject to quarter-end and year-end adjustments. This press release contains forward-looking statements, including those relating to The Gymboree Corporation's anticipated future financial performance, such as those relating to its comparable sales growth, Adjusted EBITDA, capital expenditures, cash flows and new store openings. Actual results could vary materially as a result of a number of factors, including the ongoing volatility in the commodities market for cotton, uncertainties relating to high levels of unemployment and consumer debt, volatility in the financial markets, general economic conditions, holiday spending levels and patterns, the Company’s ability to anticipate and timely respond to changes in trends and consumer preferences and customer reactions to new merchandise, service levels and new concepts, competitive market conditions, success in meeting the Company's delivery targets, the Company's promotional activity, 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, 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 February 2, 2013 filed with the Securities and Exchange Commission (“SEC”) on May 2, 2013, and its subsequent SEC filings. The forward-looking statements contained in this press release reflect the Company's expectations as of the date hereof, and the inclusion of a projection or forward-looking statement in this press release should not be regarded as a representation by the Company that its plans or objectives will be achieved. The Company undertakes no obligation to update the information provided herein.
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
(Unaudited)
| 13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
| November 2, 2013 | October 27, 2012 | November 2, 2013 | October 27, 2012 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net sales: | ||||||||||||||||
| Retail | $ | 297,352 | $ | 299,965 | $ | 857,173 | $ | 847,195 | ||||||||
| Gymboree Play & Music | 6,821 | 6,390 | 19,409 | 17,981 | ||||||||||||
| Retail Franchise | 5,665 | 5,163 | 16,955 | 12,845 | ||||||||||||
| Total net sales | 309,838 | 311,518 | 893,537 | 878,021 | ||||||||||||
| Cost of goods sold, including buying and occupancy expenses | (186,370 | ) | (185,915 | ) | (542,010 | ) | (541,406 | ) | ||||||||
| Gross profit | 123,468 | 125,603 | 351,527 | 336,615 | ||||||||||||
| Selling, general and administrative expenses | (111,199 | ) | (99,016 | ) | (317,351 | ) | (286,350 | ) | ||||||||
| Operating income | 12,269 | 26,587 | 34,176 | 50,265 | ||||||||||||
| Interest income | 41 | 42 | 143 | 146 | ||||||||||||
| Interest expense | (20,483 | ) | (21,312 | ) | (61,352 | ) | (64,163 | ) | ||||||||
| Loss on extinguishment of debt | (834 | ) | - | (834 | ) | (1,237 | ) | |||||||||
| Other income (expense), net | 853 | 86 | 751 | (4 | ) | |||||||||||
| (Loss) income before income taxes | (8,154 | ) | 5,403 | (27,116 | ) | (14,993 | ) | |||||||||
| Income tax (expense) benefit | (16,244 | ) | (493 | ) | (9,455 | ) | 10,007 | |||||||||
| Net (loss) income | (24,398 | ) | 4,910 | (36,571 | ) | (4,986 | ) | |||||||||
| Net loss attributable to noncontrolling interest | 413 | 1,211 | 700 | 2,835 | ||||||||||||
| Net (loss) income attributable to The Gymboree Corporation | $ | (23,985 | ) | $ | 6,121 | $ | (35,871 | ) | $ | (2,151 | ) | |||||
EXHIBIT B
THE GYMBOREE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| November 2, 2013 | February 2, 2013 | October 27, 2012 | ||||||||||
| (in thousands) | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 19,079 | $ | 33,328 | $ | 42,586 | ||||||
| Accounts receivable | 32,485 | 27,542 | 27,232 | |||||||||
| Merchandise inventories | 222,414 | 197,935 | 255,722 | |||||||||
| Prepaid income taxes | 1,815 | 2,903 | 5,165 | |||||||||
| Prepaid expenses | 19,986 | 17,341 | 6,539 | |||||||||
| Deferred income taxes | 11,721 | 31,383 | 38,660 | |||||||||
| Total current assets | 307,500 | 310,432 | 375,904 | |||||||||
| Property and equipment, net | 209,267 | 205,325 | 205,486 | |||||||||
| Goodwill | 898,983 | 898,966 | 899,097 | |||||||||
| Other intangible assets | 576,744 | 580,641 | 585,277 | |||||||||
| Deferred financing costs | 34,067 | 40,040 | 43,018 | |||||||||
| Other assets | 12,604 | 7,809 | 5,816 | |||||||||
| Total assets | $ | 2,039,165 | $ | 2,043,213 | $ | 2,114,598 | ||||||
| Current liabilities | ||||||||||||
| Accounts payable | $ | 87,323 | $ | 90,133 | $ | 88,824 | ||||||
| Accrued liabilities | 113,472 | 90,443 | 101,573 | |||||||||
| Line of credit | 24,000 | - | - | |||||||||
| Current obligation under capital lease | 492 | - | - | |||||||||
| Total current liabilities | 225,287 | 180,576 | 190,397 | |||||||||
| Long-term liabilities | ||||||||||||
| Long-term debt | 1,113,668 | 1,138,455 | 1,192,383 | |||||||||
| Long-term obligation under capital lease | 3,532 | - | - | |||||||||
| Lease incentives and other deferred liabilities | 49,772 | 40,104 | 38,955 | |||||||||
| Unrecognized tax benefits | 12,416 | 7,848 | 7,685 | |||||||||
| Deferred income taxes | 217,908 | 234,593 | 235,935 | |||||||||
| Total liabilities | 1,622,583 | 1,601,576 | 1,665,355 | |||||||||
| Stockholders' equity | 416,582 | 441,637 | 449,243 | |||||||||
| Total liabilities and stockholders' equity | $ | 2,039,165 | $ | 2,043,213 | $ | 2,114,598 | ||||||
EXHIBIT C
THE GYMBOREE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 39 Weeks Ended | ||||||||
| November 2, 2013 | October 27, 2012 | |||||||
| (in thousands) | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (36,571 | ) | $ | (4,986 | ) | ||
| Adjustments to reconcile net loss to net cash | ||||||||
| provided by operating activities: | ||||||||
| Loss on extinguishment of debt | 834 | 1,237 | ||||||
| Depreciation and amortization | 34,825 | 43,776 | ||||||
| Amortization of deferred financing costs and accretion of original issue discount | 5,112 | 5,216 | ||||||
| Interest rate cap contracts - adjustment to market | 742 | 182 | ||||||
| Loss on disposal/impairment of assets | 5,662 | 2,090 | ||||||
| Deferred income taxes | 2,969 | (12,986 | ) | |||||
| Share-based compensation expense | 4,417 | 3,220 | ||||||
| Other | 40 | 1,685 | ||||||
| Change in assets and liabilities: | ||||||||
| Accounts receivable | 4,382 | (2,317 | ) | |||||
| Merchandise inventories | (24,264 | ) | (45,850 | ) | ||||
| Prepaid income taxes | 1,223 | (769 | ) | |||||
| Prepaid expenses and other assets | (5,144 | ) | (1,021 | ) | ||||
| Accounts payable | (2,807 | ) | 9,785 | |||||
| Accrued liabilities | 17,344 | 70 | ||||||
| Lease incentives and other deferred liabilities | 14,522 | 12,547 | ||||||
| Net cash provided by operating activities | 23,286 | 11,879 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (35,213 | ) | (31,902 | ) | ||||
| Other | (235 | ) | (584 | ) | ||||
| Net cash used in investing activities | (35,448 | ) | (32,486 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Payments on Term Loan | - | (17,698 | ) | |||||
| Proceeds from ABL facility | 79,000 | - | ||||||
| Payments on ABL facility | (55,000 | ) | - | |||||
| Repurchase of notes | (24,760 | ) | - | |||||
| Payments of deferred financing costs | - | (1,347 | ) | |||||
| Payments on capital lease | (78 | ) | - | |||||
| Investment by affiliate of Parent | - | 2,400 | ||||||
| Dividend payment to Parent | (7,475 | ) | - | |||||
| Capital contribution received by noncontrolling interest | 6,506 | 1,595 | ||||||
| Net cash used in financing activities | (1,807 | ) | (15,050 | ) | ||||
| Effect of exchange rate fluctuations on cash and cash equivalents | (280 | ) | 333 | |||||
| Net decrease in cash and cash equivalents | (14,249 | ) | (35,324 | ) | ||||
| CASH AND CASH EQUIVALENTS: | ||||||||
| Beginning of period | 33,328 | 77,910 | ||||||
| End of period | $ | 19,079 | $ | 42,586 | ||||
EXHIBIT D
THE GYMBOREE CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
ADJUSTED EBITDA:
"The Company defines ""Adjusted EBITDA"" as net income (loss) attributable to The Gymboree Corporation before interest (income) expense, income tax expense (benefit), and depreciation and amortization (""EBITDA"") adjusted for other items, including gain or loss on extinguishment of debt, 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 (in thousands):
| 13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
| November 2, 2013 | October 27, 2012 | November 2, 2013 | October 27, 2012 | |||||||||||||
| Net (loss) income attributable to The Gymboree Corporation | $ | (23,985 | ) | $ | 6,121 | $ | (35,871 | ) | $ | (2,151 | ) | |||||
| Reconciling items (a): | ||||||||||||||||
| Interest expense | 20,483 | 21,312 | 61,352 | 64,163 | ||||||||||||
| Interest income | (41 | ) | (32 | ) | (114 | ) | (116 | ) | ||||||||
| Income tax expense (benefit) | 15,917 | (776 | ) | 9,202 | (11,051 | ) | ||||||||||
| Depreciation and amortization (b) | 10,874 | 14,727 | 34,156 | 43,467 | ||||||||||||
| Non-cash share-based compensation expense | 1,443 | 303 | 4,417 | 3,220 | ||||||||||||
| Loss on disposal/impairment on assets | 3,712 | 827 | 5,583 | 2,090 | ||||||||||||
| Loss on extinguishment of debt | 834 | - | 834 | 1,237 | ||||||||||||
| Other (c) | 775 | - | 3,238 | - | ||||||||||||
| Acquisition-related adjustments (d) | 3,890 | 4,409 | 11,882 | 13,288 | ||||||||||||
| Adjusted EBITDA | $ | 33,902 | $ | 46,891 | $ | 94,679 | $ | 114,147 | ||||||||
| (a) Excludes amounts related to noncontrolling interest, which are already excluded from net (loss) income attributable to The Gymboree Corporation. | ||||||||||||||||
| (b) Includes the following (in thousands): | ||||||||||||||||
| Amortization of intangible assets (impacts SG&A) | $ | 383 | $ | 4,340 | $ | 3,025 | $ | 13,020 | ||||||||
| Amortization of below and above market leases (impacts COGS) | (348 | ) | (406 | ) | (1,110 | ) | (1,442 | ) | ||||||||
| $ | 35 | $ | 3,934 | $ | 1,915 | $ | 11,578 | |||||||||
| (c) Other is comprised of a non-recurring change in reserves, restructuring charges, and executive-related hiring expenses. | ||||||||||||||||
| (d) Includes the following (in thousands): | ||||||||||||||||
| Additional rent expense recognized due to the elimination of deferred rent and construction allowances in purchase accounting (impacts COGS) | $ | 2,217 | $ | 2,293 | $ | 6,675 | $ | 6,925 | ||||||||
| Sponsor fees, legal and accounting, as well as other costs incurred as a result of the Acquisition or refinancing (impacts SG&A) | 974 | 919 | 3,069 | 2,767 | ||||||||||||
| Decrease in net sales due to the elimination of deferred revenue related to the Company's co-branded credit card program in purchase accounting (impacts net sales) | 699 | 1,197 | 2,138 | 3,596 | ||||||||||||
| $ | 3,890 | $ | 4,409 | $ | 11,882 | $ | 13,288 | |||||||||
| OTHER NON-GAAP FINANCIAL MEASURES: | ||||||||||||||||
| 13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
| November 2, 2013 | October 27, 2012 | November 2, 2013 | October 27, 2012 | |||||||||||||
| Gross profit as reported | $ | 123,468 | $ | 125,603 | $ | 351,527 | $ | 336,615 | ||||||||
| Acquisition-related adjustments | 2,568 | 3,084 | 7,703 | 9,079 | ||||||||||||
| Adjusted gross profit excluding Acquisition-related adjustments (non-GAAP measure) | $ | 126,036 | $ | 128,687 | $ | 359,230 | $ | 345,694 | ||||||||
| 13 Weeks Ended | 39 Weeks Ended | |||||||||||||||
| November 2, 2013 | October 27, 2012 | November 2, 2013 | October 27, 2012 | |||||||||||||
| SG&A as reported | $ | (111,199 | ) | $ | (99,016 | ) | $ | (317,351 | ) | $ | (286,350 | ) | ||||
| Acquisition-related adjustments | 1,357 | 5,259 | 6,094 | 15,787 | ||||||||||||
| Other adjustments | 775 | - | 3,238 | - | ||||||||||||
| 2,132 | 5,259 | 9,332 | 15,787 | |||||||||||||
| Adjusted SG&A excluding Acquisition-related and other adjustments (non-GAAP measure) | $ | (109,067 | ) | $ | (93,757 | ) | $ | (308,019 | ) | $ | (270,563 | ) | ||||
EXHIBIT E
THE GYMBOREE CORPORATION
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Unaudited)
| 13 Weeks Ended November 2, 2013 | ||||||||||||||||
| Balance Before | ||||||||||||||||
| Consolidation of VIEs | VIEs* | Eliminations | As Reported | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net sales | $ | 305,639 | $ | 5,395 | $ | (1,196 | ) | $ | 309,838 | |||||||
| Cost of goods sold, including buying and occupancy expenses | (185,116 | ) | (1,297 | ) | 43 | (186,370 | ) | |||||||||
| Gross profit | 120,523 | 4,098 | (1,153 | ) | 123,468 | |||||||||||
| Selling, general and administrative expenses | (107,471 | ) | (4,901 | ) | 1,173 | (111,199 | ) | |||||||||
| Operating income (loss) | 13,052 | (803 | ) | 20 | 12,269 | |||||||||||
| Other non operating (expense) income, net | (21,140 | ) | 717 | - | (20,423 | ) | ||||||||||
| Loss before income taxes | (8,088 | ) | (86 | ) | 20 | (8,154 | ) | |||||||||
| Income tax expense | (15,917 | ) | (327 | ) | - | (16,244 | ) | |||||||||
| Net loss | (24,005 | ) | (413 | ) | 20 | (24,398 | ) | |||||||||
| Net loss attributable to noncontrolling interest | - | 413 | - | 413 | ||||||||||||
| Net loss attributable to The Gymboree Corporation | $ | (24,005 | ) | $ | - | $ | 20 | $ | (23,985 | ) | ||||||
| 39 Weeks Ended Novermber 2, 2013 | ||||||||||||||||
| Balance Before | ||||||||||||||||
| Consolidation of VIEs | VIEs* | Eliminations | As Reported | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net sales | $ | 882,264 | $ | 15,027 | $ | (3,754 | ) | $ | 893,537 | |||||||
| Cost of goods sold, including buying and occupancy expenses | (538,591 | ) | (3,868 | ) | 449 | (542,010 | ) | |||||||||
| Gross profit | 343,673 | 11,159 | (3,305 | ) | 351,527 | |||||||||||
| Selling, general and administrative expenses | (308,233 | ) | (12,477 | ) | 3,359 | (317,351 | ) | |||||||||
| Operating income (loss) | 35,440 | (1,318 | ) | 54 | 34,176 | |||||||||||
| Other non operating (expense) income, net | (62,163 | ) | 871 | - | (61,292 | ) | ||||||||||
| Loss before income taxes | (26,723 | ) | (447 | ) | 54 | (27,116 | ) | |||||||||
| Income tax expense | (9,202 | ) | (253 | ) | - | (9,455 | ) | |||||||||
| Net loss | (35,925 | ) | (700 | ) | 54 | (36,571 | ) | |||||||||
| Net loss attributable to noncontrolling interest | - | 700 | - | 700 | ||||||||||||
| Net loss attributable to The Gymboree Corporation | $ | (35,925 | ) | $ | - | $ | 54 | $ | (35,871 | ) | ||||||
| 13 Weeks Ended October 27, 2012 | ||||||||||||||||
| Balance Before | ||||||||||||||||
| Consolidation of VIEs | VIEs* | Eliminations | As Reported | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net sales | $ | 311,008 | $ | 3,123 | $ | (2,613 | ) | $ | 311,518 | |||||||
| Cost of goods sold, including buying and occupancy expenses | (185,529 | ) | (818 | ) | 432 | (185,915 | ) | |||||||||
| Gross profit | 125,479 | 2,305 | (2,181 | ) | 125,603 | |||||||||||
| Selling, general and administrative expenses | (98,785 | ) | (2,328 | ) | 2,097 | (99,016 | ) | |||||||||
| Operating income (loss) | 26,694 | (23 | ) | (84 | ) | 26,587 | ||||||||||
| Other non operating (expense) income, net | (21,265 | ) | 81 | - | (21,184 | ) | ||||||||||
| Income before income taxes | 5,429 | 58 | (84 | ) | 5,403 | |||||||||||
| Income tax benefit (expense) | 776 | (1,269 | ) | - | (493 | ) | ||||||||||
| Net income (loss) | 6,205 | (1,211 | ) | (84 | ) | 4,910 | ||||||||||
| Net loss attributable to noncontrolling interest | - | 1,211 | - | 1,211 | ||||||||||||
| Net income attributable to The Gymboree Corporation | $ | 6,205 | $ | - | $ | (84 | ) | $ | 6,121 | |||||||
| 39 Weeks Ended October 27, 2012 | ||||||||||||||||
| Balance Before | ||||||||||||||||
| Consolidation of VIEs | VIEs* | Eliminations | As Reported | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net sales | $ | 876,430 | $ | 8,322 | $ | (6,731 | ) | $ | 878,021 | |||||||
| Cost of goods sold, including buying and occupancy expenses | (540,091 | ) | (2,262 | ) | 947 | (541,406 | ) | |||||||||
| Gross profit | 336,339 | 6,060 | (5,784 | ) | 336,615 | |||||||||||
| Selling, general and administrative expenses | (283,987 | ) | (7,949 | ) | 5,586 | (286,350 | ) | |||||||||
| Operating income (loss) | 52,352 | (1,889 | ) | (198 | ) | 50,265 | ||||||||||
| Other non operating (expense) income, net | (65,356 | ) | 98 | - | (65,258 | ) | ||||||||||
| Loss before income taxes | (13,004 | ) | (1,791 | ) | (198 | ) | (14,993 | ) | ||||||||
| Income tax benefit (expense) | 11,051 | (1,044 | ) | - | 10,007 | |||||||||||
| Net loss | (1,953 | ) | (2,835 | ) | (198 | ) | (4,986 | ) | ||||||||
| Net loss attributable to noncontrolling interest | - | 2,835 | - | 2,835 | ||||||||||||
| Net loss attributable to The Gymboree Corporation | $ | (1,953 | ) | $ | - | $ | (198 | ) | $ | (2,151 | ) | |||||
EXHIBIT E (continued)
THE GYMBOREE CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEETS
(Unaudited)
| November 2, 2013 | ||||||||||||||||
| Balance Before | ||||||||||||||||
| Consolidation of VIEs | VIEs* | Eliminations | As Reported | |||||||||||||
| (in thousands) | ||||||||||||||||
| Current assets | $ | 287,541 | $ | 21,429 | $ | (1,470 | ) | $ | 307,500 | |||||||
| Non-current assets | 1,727,065 | 4,599 | 1 | 1,731,665 | ||||||||||||
| Total assets | $ | 2,014,606 | $ | 26,028 | $ | (1,469 | ) | $ | 2,039,165 | |||||||
| Current liabilities | $ | 218,665 | $ | 7,916 | $ | (1,294 | ) | $ | 225,287 | |||||||
| Non-current liabilities | 1,397,034 | 262 | - | 1,397,296 | ||||||||||||
| Total liabilities | $ | 1,615,699 | $ | 8,178 | $ | (1,294 | ) | $ | 1,622,583 | |||||||
| Total stockholders' equity | 398,907 | - | (175 | ) | 398,732 | |||||||||||
| Noncontrolling interest | - | 17,850 | - | 17,850 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 2,014,606 | $ | 26,028 | $ | (1,469 | ) | $ | 2,039,165 | |||||||
| February 2, 2013 | ||||||||||||||||
| Balance Before | ||||||||||||||||
| Consolidation of VIEs | VIEs* | Eliminations | As Reported | |||||||||||||
| (in thousands) | ||||||||||||||||
| Current assets | $ | 303,344 | $ | 11,553 | $ | (4,465 | ) | $ | 310,432 | |||||||
| Non-current assets | 1,730,865 | 1,916 | - | 1,732,781 | ||||||||||||
| Total assets | $ | 2,034,209 | $ | 13,469 | $ | (4,465 | ) | $ | 2,043,213 | |||||||
| Current liabilities | $ | 175,555 | $ | 9,244 | $ | (4,223 | ) | $ | 180,576 | |||||||
| Non-current liabilities | 1,420,870 | 130 | - | 1,421,000 | ||||||||||||
| Total liabilities | $ | 1,596,425 | $ | 9,374 | $ | (4,223 | ) | $ | 1,601,576 | |||||||
| Total stockholders' equity | 437,784 | - | (242 | ) | 437,542 | |||||||||||
| Noncontrolling interest | - | 4,095 | - | 4,095 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 2,034,209 | $ | 13,469 | $ | (4,465 | ) | $ | 2,043,213 | |||||||
| October 27, 2012 | ||||||||||||||||
| Balance Before | ||||||||||||||||
| Consolidation of VIEs | VIEs* | Eliminations | As Reported | |||||||||||||
| (in thousands) | ||||||||||||||||
| Current assets | $ | 366,563 | $ | 13,270 | $ | (3,929 | ) | $ | 375,904 | |||||||
| Non-current assets | 1,737,460 | 1,234 | - | 1,738,694 | ||||||||||||
| Total assets | $ | 2,104,023 | $ | 14,504 | $ | (3,929 | ) | $ | 2,114,598 | |||||||
| Current liabilities | $ | 183,479 | $ | 10,658 | $ | (3,740 | ) | $ | 190,397 | |||||||
| Non-current liabilities | 1,474,878 | 80 | - | 1,474,958 | ||||||||||||
| Total liabilities | $ | 1,658,357 | $ | 10,738 | $ | (3,740 | ) | $ | 1,665,355 | |||||||
| Total stockholders' equity | 445,666 | - | (189 | ) | 445,477 | |||||||||||
| Noncontrolling interest | - | 3,766 | - | 3,766 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 2,104,023 | $ | 14,504 | $ | (3,929 | ) | $ | 2,114,598 | |||||||
* The Variable Interest Entities ("VIEs") includes 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.