Exhibit 99.1
| Contact: |
| Philip Roizin |
| EVP of Finance and Administration |
| (603) 880-9500 |
FOR IMMEDIATE RELEASE
Brookstone Announces Fourth-Quarter and Fiscal Year Financial Results for 2006
MERRIMACK, N.H., February 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.
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BROOKSTONE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| (Unaudited) | ||||||
| December 30, 2006 |
December 31, 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)
| Thirteen-Weeks December 30, 2006 |
Period from October 30, 2005 December 31, |
|||||||
| 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 Year Ended December 30, 2006 |
Period from 2005 |
Period from January 30, 2005 through October 3, 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 | ) | |||||