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Body Central Corp. Announces Third Quarter 2013 Financial Results

JACKSONVILLE, Fla., Oct. 31, 2013 (GLOBE NEWSWIRE) -- Body Central Corp. (Nasdaq:BODY) today announced financial results for the third quarter of 2013.

Highlights for the thirteen weeks ended September 28, 2013:

  • Net revenues for the quarter decreased 10.4% to $60.8 million, compared to $67.9 million for the third quarter of 2012.
  • Store sales decreased 10.1% to $55.7 million due to a comparable-store sales decrease of 18.3%, partially offset by a net increase of 28 stores from the same quarter last year.
  • Direct sales decreased by 13.6% to $5.1 million from $5.9 million in the same quarter last year.
  • The loss from operations was $15.5 million, as compared to income from operations of $196,000 for the third quarter in 2012.
  • The net loss was $9.0 million, or $(0.55) per diluted share based on 16.4 million weighted average shares outstanding. Net income for the third quarter of 2012 was $153,000, or $0.01 per diluted share based on 16.3 million weighted average shares outstanding.
  • The Company opened 5 new stores during the third quarter and operated 291 stores as of September 28, 2013.

Brian Woolf, Body Central's CEO, stated: "Our third quarter results reflect the continued difficulty of driving traffic into our stores and the overall traffic slowdown within our segment. While our comparable sales decreased 18% for the quarter, we realized positive comp sales performance in our bottoms and shoe businesses. In addition, the eCommerce component of our direct business continues to grow rapidly as we shift our marketing spend to online traffic drivers such as email campaigns, display ads, and affiliate programs. During the third quarter, we saw direct business revenue attributed to eCommerce increase approximately threefold from prior year levels. We are also confident that our focus on nightlife and club wear will resonate with our customers this holiday season. The introduction of our Sexy Stretch line performed well and we have plans to expand the offering. Our priorities continue to be to improve merchandise assortments, customer messaging and store traffic. We are initiating several key marketing actions during the holiday season to expand our customer base and reactivate former customers."

Mr. Woolf further stated: "Due to the longer transition period, we have reduced our corporate staff by 11% effective immediately, and have initiated other cost cutting measures that will be fully deployed by year end with the expectation that these initiatives will reduce our annualized SG&A exposure by $5 million."

In closing, Mr. Woolf said: "We believe our strategic direction and initiatives will support the re-engagement of our customer base while driving long-term sales growth and profitability."

Balance Sheet highlights as of September 28, 2013:

Cash, cash equivalents and short-term investments were $20.0 million at the end of the third quarter of 2013 compared to $36.9 million at the end of the third quarter in the prior year.

Average per store inventory at cost decreased 12.4% and average per store inventory units increased 4.0% from one year ago.

The Company had no long-term debt as of the end of the third quarter 2013 and 2012.

Reported results are preliminary and remain subject to adjustment until the filing of our Form 10-Q with the SEC.

Conference Call Information

A conference call to discuss third quarter financial results is scheduled for today October 31, 2013 at 4:30 PM Eastern Time. The conference call will also be webcast live at www.bodycentral.com. To access the replay of this call, please dial (877) 870-5176 and enter pin number 1108801. The replay is available until November 14, 2013. A replay of this web cast will also be available on the Investor Relations section of the Company's website, www.bodycentral.com, within two hours of the conclusion of the call and will remain on the website for ninety days.

About Body Central

Founded in 1972, Body Central Corp. is a growing, multi-channel, specialty retailer offering on trend, quality apparel and accessories at value prices. As of October 31, 2013 the Company operated 292 specialty apparel stores in 28 states under the Body Central and Body Shop banners, as well as a direct business comprised of a Body Central catalog and an e-commerce website at www.bodycentral.com. The Company targets women in their late teens to early thirties from diverse cultural backgrounds who seek the latest fashions and a flattering fit. The Company's stores feature an assortment of tops, dresses, bottoms, jewelry, accessories and shoes sold primarily under the Company's exclusive Body Central® and Lipstick® labels.

Safe Harbor Language

Certain statements in this release are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "guidance," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions are used to identify these forward-looking statements. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are (1) our ability to identify and respond to new and changing fashion trends, customer preferences and other related factors; (2) our ability to execute successfully our growth strategy; (3) changes in consumer spending and general economic conditions; (4) changes in the competitive environment in our industry and the markets we serve, including increased competition from other retailers; (5) our new stores or existing stores achieving sales and operating levels consistent with our expectations; (6) our ability to obtain financing or to generate sufficient cash flow to support operations; (7) the success of the malls and shopping centers in which our stores are located; (8) our dependence on a strong brand image; (9) our direct business growing consistently with our growth strategy; (10) our information technology systems supporting our current and growing business, before and after our planned upgrades; (11) disruptions to our information systems in the ordinary course or as a result of systems upgrades; (12) our dependence upon key executive management or our inability to hire or retain additional personnel; (13) disruptions in our supply chain and distribution facility; (14) our lease obligations; (15) our reliance upon independent third-party transportation providers for all of our product shipments; (16) hurricanes, natural disasters, unusually adverse weather conditions, boycotts and unanticipated events; (17) the seasonality of our business; (18) increases in costs of fuel, or other energy, transportation or utilities costs and in the costs of labor and employment; (19) the impact of governmental laws and regulations and the outcomes of legal proceedings; (20) our maintaining effective internal controls; and (21) our ability to protect our trademarks or other intellectual property rights.

BODY CENTRAL CORP.
NON-GAAP CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)
(ADJUSTED FOR SECOND QUARTER DIRECT BUSINESS GOODWILL IMPAIRMENT LOSS)
Thirty-Nine Weeks Ended
September 28, September 29,
2013 2012
(In thousands, except share data)
Net (loss) income, as reported $ (19,053) $ 9,541
Direct business impairment 10,358
Net (loss) income, as adjusted $ (8,695) $ 9,541
Net (loss) income per common share, as reported:
Basic $ (1.17) $ 0.59
Diluted $ (1.17) $ 0.58
Net (loss) income per common share, as adjusted:
Basic $ (0.53) $ 0.59
Diluted $ (0.53) $ 0.58
Weighted-average common shares outstanding:
Basic 16,318,046 16,169,953
Diluted 16,318,046 16,350,690
BODY CENTRAL CORP.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)
Thirteen Weeks Ended Thirty-Nine Weeks Ended
September 28,
2013
September 29,
2012
September 28,
2013
September 29,
2012
In Thousands Except Per Share Data
Net revenues $ 60,833 $ 67,920 $ 217,383 $ 229,956
Cost of goods sold, including occupancy, buying, distribution center and catalog costs 49,692 46,399 157,977 154,440
Gross profit 11,141 21,521 59,406 75,516
Selling, general and administrative expenses 24,480 19,718 69,406 55,820
Depreciation 2,154 1,607 6,438 4,469
Impairment of long-lived assets 10,358
(Loss) income from operations (15,493) 196 (26,796) 15,227
Interest income, net 2 3 11 10
Other (loss) income, net (259) 45 747 104
(Loss) income before income taxes (15,750) 244 (26,038) 15,341
Benefit (provision) for income taxes 6,769 (91) 6,985 (5,800)
Net (loss) income $ (8,981) $ 153 $ (19,053) $ 9,541
Net (loss) income per common share:
Basic $ (0.55) $ 0.01 $ (1.17) $ 0.59
Diluted $ (0.55) $ 0.01 $ (1.17) $ 0.58
Weighted-average common shares outstanding:
Basic 16,363,633 16,205,845 16,318,046 16,169,953
Diluted 16,363,633 16,305,557 16,318,046 16,350,690
BODY CENTRAL CORP.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 28,
2013
September 29,
2012
In Thousands
Assets
Current assets
Cash and cash equivalents $ 15,597 $ 22,679
Short-term investments 4,356 14,265
Accounts receivable 1,479 1,536
Inventories 24,464 20,860
Prepaid expenses and other current assets 12,221 7,516
Deferred tax asset 3,289 2,168
Total current assets 61,406 69,024
Property and equipment, net of accumulated depreciation 40,479 30,860
Goodwill 11,150 21,508
Intangible assets, net of accumulated amortization 16,574 16,574
Other assets 333 108
Total assets $ 129,942 $ 138,074
Liabilities and Stockholders' Equity
Current liabilities
Merchandise accounts payable $ 10,585 $ 8,547
Accrued expenses and other current liabilities 21,155 19,674
Total current liabilities 31,740 28,221
Other liabilities 10,167 7,900
Deferred tax liability 4,392 4,577
Total liabilities 46,299 40,698
Commitments and contingencies
Stockholders' equity
Total stockholders' equity 83,643 97,376
Total liabilities and stockholders' equity $ 129,942 $ 138,074
BODY CENTRAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Thirty-Nine Weeks Ended
September 28,
2013
September 29,
2012
In Thousands
Cash flows from operating activities
Net (loss) income $ (19,053) $ 9,541
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 6,438 4,469
Deferred income taxes (2,236) 137
Excess tax benefits from stock-based compensation (39) (751)
Stock-based compensation 2,061 1,473
Amortization of premiums and discounts on investments, net 147 263
Loss on disposal of property and equipment 422 82
Impairment of long-lived assets 10,358
Changes in assets and liabilities:
Accounts receivable 3,231 1,071
Inventories (1,493) 281
Prepaid expenses and other assets (5,342) (490)
Merchandise accounts payable (3,130) (7,951)
Accrued expenses and other current liabilities 362 (1,626)
Other liabilities (380) 732
Net cash (used in) provided by operating activities (8,654) 7,231
Cash flows from investing activities
Proceeds from sale of property and equipment -- 29
Purchases of property and equipment (12,709) (13,158)
Purchases of intangible assets (179)
Purchases of short-term investments (12,786) (24,582)
Proceeds from sales of short-term investments 2,310 1,051
Proceeds from maturities of short-term investments 5,973 9,000
Net cash used in investing activities (17,212) (27,839)
Cash flows from financing activities
Proceeds from exercise of stock options 327 543
Excess tax benefits from stock-based compensation 751
Net cash provided by financing activities 327 1,294
Net decrease in cash and cash equivalents (25,539) (19,314)
Cash and cash equivalents
Beginning of year 41,136 41,993
End of period $ 15,597 $ 22,679

CONTACT: Tom Stoltz Chief Operating Officer and Chief Financial Officer 904-207-6720 tstoltz@bodyc.comSource:Body Central Corp.