UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): December 5, 2012

 

THE GYMBOREE CORPORATION

(Exact Name of Registrant as Specified in its Charter)

  

Delaware 000-21250 94-2615258

(State or Other Jurisdiction of

Incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

 

500 Howard Street, San Francisco, CA

94105

(Address of Principal Executive Offices, Including Zip Code)

 

(415) 278-7000

(Registrant’s Telephone Number, Including Area Code)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 2.02 Results of Operations and Financial Condition.

 

On December 5, 2012, The Gymboree Corporation issued an earnings release announcing its financial results for the third fiscal quarter ended October 27, 2012.  A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.  

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

 

No.

 

 

 

Description

 

99.1   Earnings release of The Gymboree Corporation issued dated December 5, 2012.

 

 
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

 

 

  THE GYMBOREE CORPORATION
Date: December 5, 2012      
  By: /s/ LYNDA G. GUSTAFSON
    Name: Lynda G. Gustafson  
    Title:  Vice President and Corporate Controller 
         

 

 
 

 

EXHIBIT INDEX

 

No.

 

 

 

Description

 

99.1   Earnings release of The Gymboree Corporation dated December 5, 2012.

 

 

EXHIBIT 99.1

 

 

 

 

  

FOR IMMEDIATE RELEASE: Investor Relations contact:
  Christian Janzen
  Tel: 415-278-7933
  investor_relations@gymboree.com
   
  Media Relations contact:
  Tel: 415-278-7493
  media_relations@gymboree.com

 

 

The Gymboree Corporation Reports Third Fiscal Quarter 2012 Results

 

San Francisco, Calif., December 5, 2012 – The Gymboree Corporation (the “Company”) today reported consolidated financial results for the third fiscal quarter ended October 27, 2012.

 

For the third quarter of the fiscal year ending February 2, 2013 (“fiscal 2012”), net sales were $311.5 million, an increase of 2.8% compared to $303.1 million in net sales for the third quarter of the fiscal year ended January 28, 2012 (“fiscal 2011”). Comparable store sales for the third quarter of fiscal 2012 decreased 4% compared to the third quarter of fiscal 2011.

 

Gross profit for the third quarter of fiscal 2012 was $125.6 million, or 40.3% of net sales, compared to $130.8 million, or 43.2% of net sales, for the third quarter of fiscal 2011. Excluding purchase accounting adjustments of $3.1 million and $3.4 million for the third quarter of fiscal 2012 and the third quarter of fiscal 2011, respectively, relating to the November 2010 acquisition of the Company by investment funds sponsored by Bain Capital Partners, LLC (the “Acquisition”), adjusted gross profit was $128.7 million, or 41.3% of net sales, and $134.2 million, or 44.3% of net sales, for the third quarter of fiscal 2012 and the third quarter of fiscal 2011, respectively (see Exhibit D for relevant reconciliation information).

 

SG&A expense for the third quarter of fiscal 2012 was $99.0 million, or 31.8% of net sales, compared to $99.4 million, or 32.8% of net sales, in the third quarter of the prior year. Results for the third quarter of fiscal 2012 and fiscal 2011 include $5.3 million and $5.4 million, respectively, of additional costs resulting from the Acquisition, including the effect of purchase accounting adjustments. Also included in the third quarter of fiscal 2011 was a $7.2 million charge resulting from a termination fee incurred to terminate a master franchisee in China. Excluding these charges, adjusted SG&A expense for the third quarter of fiscal 2012 and fiscal 2011 was $93.8 million, or 30.1% of net sales, and $86.8 million, or 28.6% of net sales, respectively, which represents an increase of 150 basis points over fiscal 2011 (see Exhibit D for relevant reconciliation information).

 

 

 

Operating income for the third quarter of fiscal 2012 was $26.6 million compared to $31.4 million for the same period last year. The decrease in operating income primarily resulted from lower gross profit margins and, to a lesser extent, from SG&A deleveraging due to the comparable store sales decrease of 4%.

 

Net income attributable to the Company before interest (income) expense, income tax benefit and depreciation and amortization, adjusted for other items (“Adjusted EBITDA”), for the third quarter of fiscal 2012 decreased 22.6% to $46.9 million, compared to $60.6 million for the third quarter of the prior year. Adjusted EBITDA is not a performance measure under U.S. generally accepted accounting principles (“GAAP”). See “Non-GAAP Financial Measures” below. A reconciliation of net income/(loss) attributable to the Company to Adjusted EBITDA presented herein is included in Exhibit D of this press release.

 

Balance Sheet Highlights

 

There were no borrowings outstanding under the Company’s $225 million asset-backed loan as of the end of the third fiscal quarter and approximately $189.2 million of availability.

Cash at the end of the third quarter of fiscal 2012 decreased to $42.6 million from $45.7 million at the end of the third quarter of fiscal 2011.

 

Capital expenditures for the third quarter of fiscal 2012 were $13.4 million, with the majority of the cash used to fund the opening of 38 new stores during the quarter.

 

Inventory balances at the end of the third quarter of fiscal 2012 were $255.7 million compared to $252.7 million at the end of the third quarter of fiscal 2011. Inventory cost on a per square foot basis was down 8% and inventory units on a per square foot basis were also down in the low single-digits.

 

In November 2012, the Company made a voluntary prepayment of $25 million on the outstanding principal of its senior secured term loan facility.

 

Fiscal 2012 Business Outlook

 

Sales Expectations

 

The Company anticipates comparable store sales to be flat to slightly down for the full year fiscal 2012.

 

Adjusted EBITDA

 

The Company expects Adjusted EBITDA for the fourth quarter to be comparable to slightly higher than the prior year. The Company continues to anticipate generating sufficient cash flow to service its debt and fund its growth in fiscal 2012.

 

2
 

 

New Stores

 

During fiscal 2012, the Company plans to open approximately 124 new stores, including approximately 98 Crazy 8 stores.

 

Capital Expenditures

 

During the fourth quarter of fiscal 2012, the Company anticipates spending approximately $15 million for capital expenditures.

 

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 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. See Exhibit D for a reconciliation of Adjusted EBITDA to net income/(loss).

 

Management Presentation

 

The live broadcast of the discussion of third quarter fiscal 2012 financial results will be available to interested parties at 1:00 p.m. PT (4:00 p.m. ET) on Wednesday, December 5, 2012. To listen to the live broadcast over the internet, please log on to www.gymboree.com, click on “Company Information” at the bottom of the page, go to “Investor and Media Relations” and then “Conference Calls & Webcasts.” A replay of the call will be available two hours after the broadcast through midnight PT, Wednesday, December 12, 2012, at 855-859-2056, passcode 73454037.

 

About The Gymboree Corporation

 

The Gymboree Corporation’s specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of October 27, 2012, the Company operated a total of 1,228 retail stores, as follows: 634 Gymboree® stores (consisting of 586 in the United States, 41 in Canada, 1 in Puerto Rico and 6 in Australia), 156 Gymboree Outlet stores, 130 Janie and Jack® shops and 308 Crazy 8® stores in the United States. The Company also operates three online stores at www.gymboree.com, www.janieandjack.com and www.crazy8.com, and offers directed parent-child developmental play programs at 714 franchised and Company-operated Gymboree Play & Music® centers in the United States and 42 other countries.

 

3
 

 

Forward-Looking Statements

 

The foregoing financial information for the third fiscal quarter ended October 27, 2012 is unaudited and subject to quarter-end and year-end adjustments.   The foregoing paragraphs contain forward-looking statements relating to The Gymboree Corporation's anticipated future financial performance, such as those relating to its Adjusted EBITDA, cash flows, capital expenditures and new store openings in fiscal 2012. 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, 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 January 28, 2012, filed with the Securities and Exchange Commission on April 26, 2012. 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.

 

4
 

 

EXHIBIT A              

 

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

  

   13 Weeks Ended   13 Weeks Ended   39 Weeks Ended   39 Weeks Ended 
   October 27, 2012   October 29, 2011   October 27, 2012   October 29, 2011 
   (in thousands)   (in thousands) 
Net sales:                    
Retail  $299,965   $296,445   $847,195   $815,735 
Gymboree Play & Music   6,390    3,195    17,981    9,469 
Retail Franchise   5,163    3,508    12,845    7,237 
Total net sales   311,518    303,148    878,021    832,441 
Cost of goods sold, including buying and occupancy expenses   (185,915)   (172,303)   (541,406)   (498,704)
Gross profit   125,603    130,845    336,615    333,737 
Selling, general and administrative expenses   (99,016)   (99,448)   (286,350)   (272,896)
Operating income   26,587    31,397    50,265    60,841 
Interest income   42    28    146    115 
Interest expense   (21,312)   (22,051)   (64,163)   (67,981)
Loss on extinguishment of debt   -    -    (1,237)   (19,563)
Other income (expense), net   86    8    (4)   (44)
Income (loss) before income taxes   5,403    9,382    (14,993)   (26,632)
Income tax (expense) benefit   (493)   (12,430)   10,007    6,210 
Net income (loss)   4,910    (3,048)   (4,986)   (20,422)
Net loss attributable to noncontrolling interest   1,211    -    2,835    - 
Net income (loss) attributable to The Gymboree Corporation  $6,121   $(3,048)  $(2,151)  $(20,422)

 

5
 

 

EXHIBIT B            

 

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

               

   October 27,   January 28,   October 29, 
   2012   2012   2011 
   (in thousands) 
Current Assets               
Cash and cash equivalents  $42,586   $77,910   $45,721 
Accounts receivable   27,232    27,277    21,948 
Merchandise inventories   255,722    210,212    252,685 
Prepaid income taxes   5,165    3,736    17,049 
Prepaid expenses and deferred income taxes   45,199    41,647    37,704 
  Total current assets   375,904    360,782    375,107 
                
Property and Equipment, net   205,486    202,152    207,312 
Goodwill   899,097    899,097    927,397 
Other Intangible Assets   585,277    599,195    604,563 
Deferred Financing Costs   43,018    47,915    49,549 
Other Assets   5,816    4,646    7,605 
                
Total Assets  $2,114,598   $2,113,787   $2,171,533 
                
Current Liabilities               
Accounts payable  $88,824   $79,027   $68,674 
Accrued liabilities   101,573    94,178    90,835 
Line of credit   -    -    40,000 
Current portion of long-term debt   -    17,698    8,200 
  Total current liabilities   190,397    190,903    207,709 
                
Long-Term Liabilities               
Long-term debt   1,192,383    1,192,171    1,203,650 
Lease incentives and other deferred liabilities   46,640    36,579    36,411 
Deferred income taxes   235,935    245,495    243,287 
Total Liabilities   1,665,355    1,665,148    1,691,057 
                
Stockholders' Equity   449,243    448,639    480,476 
                
Total Liabilities and Stockholders' Equity  $2,114,598   $2,113,787   $2,171,533 

 

6
 

 

EXHIBIT C                

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   39 Weeks Ended   39 Weeks Ended 
   October 27, 2012   October 29, 2011 
   (in thousands) 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(4,986)  $(20,422)
Adjustments to reconcile net loss to net cash          
 provided by operating activities:          
Write-off of deferred financing costs and original issue discount   1,237    15,860 
Depreciation and amortization   43,776    42,703 
Amortization of deferred financing costs and accretion of original issue discount   5,216    5,126 
Interest rate cap contracts - adjustment to market   182    15 
Loss on disposal/impairment of assets   2,090    3,501 
Benefit for deferred income taxes   (12,986)   (6,269)
Share-based compensation expense   3,220    4,330 
Other non-cash expense   1,685    - 
Change in assets and liabilities:          
       Accounts receivable   (2,317)   (8,278)
       Merchandise inventories   (45,850)   (68,106)
       Prepaid expenses and other assets   (1,021)   (1,097)
       Prepaid income taxes   (769)   (2,314)
       Accounts payable   9,785    14,178 
       Accrued liabilities   70    9,066 
       Lease incentives and other deferred liabilities   12,547    12,778 
Net cash provided by operating activities   11,879    1,071 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Capital expenditures   (31,902)   (28,080)
Acquisition of business, net of cash acquired   -    (1,352)
Other   (584)   (296)
Net cash used in investing activities   (32,486)   (29,728)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from Term Loan   -    820,000 
Payments on Term Loan   (17,698)   (826,150)
Proceeds from ABL facility   -    60,656 
Payments on ABL facility   -    (20,656)
Deferred financing costs   (1,347)   (6,665)
Capital contribution   2,400    14,865 
Capital contribution to noncontrolling interest   1,595    - 
Net cash (used in) provided by financing activities   (15,050)   42,050 
           
Effect of exchange rate fluctuations on cash   333    204 
           
Net (decrease) increase in cash and cash equivalents   (35,324)   13,597 
           
CASH AND CASH EQUIVALENTS:          
Beginning of period   77,910    32,124 
End of period  $42,586   $45,721 

 

7
 

 

 

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 taxes, 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 of the Company by investment funds sponsored by Bain Capital Partners, LLC (the "Acquisition").

Adjusted EBITDA is not a performance measure under U.S. generally accepted accounting principes ("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 income (loss) attributable to The Gymboree Corporation to Adjusted EBITDA (in thousands):
                

   13 Weeks Ended   13 Weeks Ended   39 Weeks Ended   39 Weeks Ended 
   October 27, 2012   October 29, 2011   October 27, 2012   October 29, 2011 
Net income (loss) attributable to The Gymboree Corporation  $6,121   $(3,048)  $(2,151)  $(20,422)
Reconciling items (a):                    
Interest expense   21,312    22,051    64,163    67,981 
Interest income   (32)   (28)   (116)   (115)
Income tax (benefit) expense   (776)   12,430    (11,051)   (6,210)
Depreciation and amortization (b)   14,727    14,086    43,467    42,703 
Non-cash share-based compensation expense   303    1,458    3,220    4,330 
Loss on disposal/impairment on assets   827    1,241    2,090    3,501 
Loss on extinguishment of debt   -    -    1,237    19,563 
Gymboree Play & Music franchise transition   -    7,200    -    7,200 
Acquisition-related adjustments (c)   4,409    5,174    13,288    26,865 
Adjusted EBITDA  $46,891   $60,564   $114,147   $145,396 

                    

(a) Exclude amounts related to noncontrolling interest, which are already excluded from net income (loss) attributable to The Gymboree Corporation.  

 

(b) Includes the following (in thousands):                
Amortization of intangible assets (impacts SG&A)  $4,340   $4,144   $13,020   $12,433 
Amortization of below and above market leases (impacts COGS)   (406)   (508)   (1,442)   (1,528)
   $3,934   $3,636   $11,578   $10,905 
                     
(c) Include the following (in thousands):                    
Adjustment to cost of goods sold from an increase in the net book value of inventory as a result of purchase accounting (impacts COGS)  $-   $-   $-   $10,731 
Additional rent expense recognized due to the elimination of deferred rent and construction allowances in purchase accounting (impacts COGS)   2,293    2,437    6,925    7,274 
Legal, accounting and sponsor fees, as well as other costs incurred as a result of the Acquisition (impacts SG&A)   919    1,276    2,767    4,436 
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)   1,197    1,461    3,596    4,424 
   $4,409   $5,174   $13,288   $26,865 

 

OTHER NON-GAAP FINANCIAL MEASURES:

 

           as a % of Total Net Sales 
   13 Weeks Ended   13 Weeks Ended   13 Weeks Ended   13 Weeks Ended 
   October 27, 2012   October 29, 2011   October 27, 2012   October 29, 2011 
   (in thousands)         
Gross profit as reported  $125,603   $130,845    40.3%   43.2%
Acquisition-related adjustments   3,084    3,390    1.0%   1.1%
Adjusted gross profit excluding Acquisition related adjustments (non-GAAP measure)  $128,687   $134,235    41.3%   44.3%

 

           as a % of Total Net Sales 
   39 Weeks Ended   39 Weeks Ended   39 Weeks Ended   39 Weeks Ended 
   October 27, 2012   October 29, 2011   October 27, 2012   October 29, 2011 
   (in thousands)         
Gross profit as reported  $336,615   $333,737    38.3%   40.1%
Acquisition-related adjustments   9,079    20,901    1.0%   2.5%
Adjusted gross profit excluding Acquisition related adjustments (non-GAAP measure)  $345,694   $354,638    39.4%   42.6%

 

           as a % of Total Net Sales 
   13 Weeks Ended   13 Weeks Ended   13 Weeks Ended   13 Weeks Ended 
   October 27, 2012   October 29, 2011   October 27, 2012   October 29, 2011 
   (in thousands)         
SG&A as reported  $(99,016)  $(99,448)   -31.8%   -32.8%
Acquisition-related adjustments   5,259    5,420    1.7%   1.8%
Adjusted SG&A excluding Acquisition related adjustments (non-GAAP measure)  $(93,757)  $(94,028)   -30.1%   -31.0%

 

           as a % of Total Net Sales 
   39 Weeks Ended   39 Weeks Ended   39 Weeks Ended   39 Weeks Ended 
   October 27, 2012   October 29, 2011   October 27, 2012   October 29, 2011 
   (in thousands)         
SG&A as reported  $(286,350)  $(272,896)   -32.6%   -32.8%
Acquisition-related adjustments   15,787    16,869    1.8%   2.0%
Adjusted SG&A excluding Acquisition related adjustments (non-GAAP measure)  $(270,563)  $(256,027)   -30.8%   -30.8%

 

8
 

 

EXHIBIT E              

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Unaudited)

                   

 

 

   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 
Interest income   32    10    -    42 
Interest expense   (21,312)   -    -    (21,312)
Loss on extinguishment of debt   -    -    -    - 
Other income (expense), net   15    71    -    86 
                     
Income (loss) 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, 201 
   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 
Interest income   116    30    -    146 
Interest expense   (64,163)   -    -    (64,163)
Loss on extinguishment of debt   (1,237)   -    -    (1,237)
Other (expense) income, net   (72)   68    -    (4)
                     
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)

                    

                   

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING BALANCE SHEETS

(Unaudited)

 

   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 

 

   January 28, 2012 
   Balance Before             
   Consolidation of VIEs   VIEs*   Eliminations   As Reported 
   (in thousands) 
Current assets  $355,073   $6,692   $(983)  $360,782 
Non-current assets   1,752,303    702    -    1,753,005 
Total assets  $2,107,376   $7,394   $(983)  $2,113,787 
                     
Current liabilities  $187,812   $4,074   $(983)  $190,903 
Non-current liabilities   1,474,189    56    -    1,474,245 
Total liabilities  $1,662,001   $4,130   $(983)  $1,665,148 
                     
Total stockholders' equity   445,375    -    -    445,375 
Noncontrolling interest   -    3,264    -    3,264 
Total liabilities and stockholders' equity  $2,107,376   $7,394   $(983)  $2,113,787 

                    

*  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.

 

9