News Releases
Brookstone Announces Fourth-Quarter and Fiscal Year Financial Results for 2006
MERRIMACK, N.H., Feb. 22, 2007 -- Innovative product development company and specialty lifestyle retailer Brookstone, Inc. today announced financial results for the fourth quarter and fiscal year ended December 30, 2006. Results in this release relating to the Company's Gardeners Eden brand are reflected as discontinued operations.
For the thirteen-week period ended December 30, 2006, Brookstone reported total net sales of $256 million, a 13.3 percent increase as compared to the thirteen-week period ending December 31, 2005. Same-store sales for the thirteen-week period ending December 30, 2006 increased 6.7 percent compared to the thirteen-week period ending December 31, 2005.
For the fifty-two week period ended December 30, 2006, Brookstone reported total net sales of $512 million, a 9.3 percent increase as compared to the fifty-two week period ending December 31, 2005. Same-store sales for the fifty-two week period ending December 30, 2006 increased 1.8 percent compared to the fifty-two week period ending December 31, 2005.
For the fifty-two week period ended December 30, 2006, Income from Operations was $30.6 million as compared to the combined results of the Predecessor and Successor Companys' results of $15.4 million for the forty-eight week period ended December 31, 2005.
Lou Mancini, Brookstone President and Chief Executive Officer, said:
"We are pleased with our fourth quarter results. All our segments recorded strong gains in both sales and earnings. Many of the product, sales and marketing initiatives we put into place in 2006 were successful. We ended the year with a cash position of $72 million as of December 30, 2006 and no cash borrowings under our $100 million asset-backed credit facility. We believe we are well positioned for 2007. We have a number of new product launches planned, some of which will be our exclusive launch of certain OSIM healthy lifestyle products."
In November of 2005, the Company changed its fiscal year end from the Saturday closest to the end of January to the Saturday closest to the end of December. As a result of this change, Fiscal 2005 results are for the eleven-month period commencing on January 30, 2005 through December 31, 2005, as compared to the Fiscal 2006 twelve-month period from January 1, 2006 to December 30, 2006. In addition, due to the change in the fiscal year end, the Company's fiscal fourth quarter now ends in December, as compared to January under our previous year end. Our presentations through the fourth quarter of 2006 will compare the new quarter end results with the historical results from the old quarter ends. We believe these period-to-period comparisons will be informative given the fact that the fiscal fourth-quarter periods of 2005 and 2006 will both encompass the Holiday selling season and year end accounting adjustments.
Brookstone, Inc. is an innovative product development and specialty lifestyle retail Company that operates 306 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 an e-commerce website at http://www.brookstone.com.
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 filed with the Securities and Exchange Commission. Words such as "estimate", "project", "plan", "believe", "feel", "anticipate", "assume", "may", "will", "should" and similar words and phrases may identify forward-looking statements. Statements about a possible sale or divestiture of its Gardeners Eden business constitute forward-looking statements. The Company may not be able to complete a divestiture on acceptable terms because of a number of factors, including failure to reach agreement with a purchaser. 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
------------ ------------
December 30, December 31,
2006 2005
------------ ------------
Assets
------
Current assets:
Cash and cash equivalents $ 71,738 $ 76,326
Receivables, net 12,472 10,906
Merchandise inventories 95,253 75,716
Deferred income taxes, net 4,346 4,947
Prepaid expenses 7,478 9,117
-------- --------
Total current assets 191,287 177,012
Property, plant and equipment,
net 72,638 76,328
Intangible assets, net 131,354 132,271
Goodwill 189,824 192,453
Other assets 16,080 19,363
-------- --------
Total assets $601,183 $597,427
======== ========
Liabilities and Shareholders'
Equity
-----------------------------
Current liabilities:
Accounts payable $ 23,410 $ 22,012
Other current liabilities 56,627 54,714
-------- --------
Total current liabilities 80,037 76,726
Other long-term liabilities 20,567 18,962
Long-term debt 190,253 190,849
Deferred income taxes 45,317 43,392
Other party interests in
consolidated entities 1,114 1,176
Total shareholders' equity 263,895 266,322
-------- --------
Total liabilities and
shareholders' equity $601,183 $597,427
======== ========
BROOKSTONE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
------------ -------------
Period from
Thirteen- October 30,
Weeks Ended 2005 through
December 30, December 31,
2006 2005
------------ -------------
Net sales $ 256,110 $ 199,590
Cost of sales 140,112 115,900
--------- ---------
Gross profit 115,998 83,690
Selling, general and
administrative expenses 55,180 40,162
--------- ---------
Income from operations 60,818 43,528
Interest expense, net 7,019 4,393
--------- ---------
Income before taxes, other party
interests in consolidated
entities and discontinued
operations 53,799 39,135
Other party interests in
consolidated entities 183 109
--------- ---------
Income before taxes and
discontinued operations 53,616 39,026
Income tax 19,372 14,891
--------- ---------
Income from continuing operations 34,244 24,135
Loss on discontinued operations,
net of income tax benefit (99) (596)
--------- ---------
Net income $ 34,145 $ 23,539
========= =========
BROOKSTONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
----------- ----------- -----------
Successor Successor Predecessor
----------- ----------- -----------
Fiscal Period from Period from
Year Oct. 4, 2005 Jan. 30, 2005
Ended through through
Dec. 30, Dec. 31, Oct. 3,
2006 2005 2005
----------- ----------- -----------
Net sales $ 511,914 $ 224,527 $ 216,091
Cost of sales 333,979 136,093 159,872
--------- --------- ---------
Gross profit 177,935 88,434 56,219
Selling, general and
administrative expenses 147,369 50,938 78,361
--------- --------- ---------
Income (loss) from
operations 30,566 37,496 (22,142)
Interest expense, net 25,389 8,419 25
--------- --------- ---------
Income (loss) before taxes,
other party interests in
consolidated entities and
discontinued operations 5,177 29,077 (22,167)
Other party interests in
consolidated entities 1,133 174 687
--------- --------- ---------
Income (loss) before taxes
and discontinued
operations 4,044 28,903 (22,854)
Income tax provision
(benefit) 1,934 11,444 (7,887)
--------- --------- ---------
Income (loss) from
continuing operations 2,110 17,459 (14,967)
Loss on discontinued
operations, net of income
tax benefit (479) (425) (5,634)
--------- --------- ---------
Net income (loss) $ 1,631 $ 17,034 $ (20,601)
========= ========= =========
CONTACT: Brookstone, Inc.
Philip Roizin, EVP of Finance and Administration
(603) 880-9500