News Releases
Brookstone Announces Second Quarter and Year-to-Date 2008 Financial Results
MERRIMACK, N.H., July 25, 2008 -- Innovative product development company and specialty lifestyle retailer Brookstone, Inc. today announced financial results for the second quarter ended June 28, 2008.
For the 13-week period ended June 28, 2008, Brookstone reported total net sales of $97.4 million, a 2.5% decrease from the comparable 13-week period of 2007. Same-store sales decreased 4.3% as compared to the comparable 13-week period last year.
For the 13-week period ending June 28, 2008, Brookstone reported a loss from operations of $7.7 million, compared to a loss from operations of $3.6 million for the comparable 13-week period last year.
For the 26-week period ended June 28, 2008, Brookstone reported total net sales of $187.2 million, a 2.3% increase from the comparable 26-week period of 2007. Same-store sales decreased 1.9% as compared to the comparable 26-week period last year.
For the 26-week period ending June 28, 2008, Brookstone reported a loss from operations of $20.7 million, compared to a loss from operations of $15.3 million for the comparable 26-week period last year.
Lou Mancini, Brookstone Chief Executive Officer, said: "The second quarter of 2008 was a challenging period for us with declining traffic in many malls. We believe that we were also impacted by our closest competitor's Going Out of Business Sale. With the exit of our closest competitor, there will be a significant opportunity to build on our market leadership through more new product introductions including OSIM healthy lifestyle products and self-use purchase products such as the anti-snore pillow."
Brookstone, Inc. is an innovative product development and specialty lifestyle retail company that operates 314 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 the Brookstone catalog and 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 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 share data)
--------------------------------
June 28, December 29, June 30,
2008 2007 2007
-------- -------- --------
(Unaudited) (Unaudited)
Assets
------
Current assets:
Cash and cash equivalents $ 1,566 $ 70,857 $ 11,937
Receivables, net 8,683 12,816 8,453
Merchandise inventories 92,122 106,400 99,570
Deferred income taxes, net 16,802 4,166 15,427
Prepaid expenses 11,071 4,020 10,295
-------- -------- --------
Total current assets 130,244 198,259 145,682
Property, plant and equipment, net 70,363 71,918 70,170
Intangible assets, net 129,167 129,500 130,896
Goodwill 189,524 189,524 189,524
Other assets 10,257 11,834 13,836
-------- -------- --------
Total assets $529,555 $601,035 $550,108
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Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 14,947 $ 33,599 $ 17,986
Other current liabilities 29,983 61,214 33,694
-------- -------- --------
Total current liabilities 44,930 94,813 51,680
Other long-term liabilities 19,934 21,137 21,664
Long-term debt 174,466 174,777 189,955
Deferred income taxes 43,052 42,999 44,550
Commitments and contingencies
Other party interests in
consolidated entities 1,108 1,250 1,045
Shareholders' equity:
Common Stock - $0.01 par value
1,000 shares authorized,
one share issued and outstanding -- -- --
Additional paid-in capital 240,797 240,380 240,009
Accumulated other comprehensive
income 575 593 174
Retained earnings 4,693 25,086 1,031
-------- -------- --------
Total shareholders' equity 246,065 266,059 241,214
-------- -------- --------
Total liabilities and
shareholders' equity $529,555 $601,035 $550,108
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BROOKSTONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
Thirteen weeks Twenty-six weeks
ended ended
------------------ ------------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
-------- -------- -------- --------
Net sales $ 97,390 $ 99,925 $187,191 $183,065
Cost of sales 70,876 71,362 138,892 135,502
-------- -------- -------- --------
Gross profit 26,514 28,563 48,299 47,563
Selling, general and
administrative expenses 34,233 32,196 68,968 62,868
-------- -------- -------- --------
Loss from operations (7,719) (3,633) (20,669) (15,305)
Interest expense, net 5,902 6,235 11,524 12,166
-------- -------- -------- --------
Loss before taxes, other party
interests in consolidated
entities and discontinued
operations (13,621) (9,868) (32,193) (27,471)
Other party interests in
consolidated entities 369 379 635 686
-------- -------- -------- --------
Loss before taxes and
discontinued operations (13,990) (10,247) (32,828) (28,157)
Income tax benefit (5,328) (3,855) (12,435) (10,663)
Loss on discontinued
operations, net of tax benefit -- (70) -- (141)
-------- -------- -------- --------
Net loss $ (8,662) $ (6,462) $(20,393) $(17,635)
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CONTACT: Philip Roizin
EVP of Finance and Administration
(603) 880-9500