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): September 10, 2015

 

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 September 10, 2015, The Gymboree Corporation issued an earnings release announcing its financial results for the second fiscal quarter ended August 1, 2015.  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 dated September 10, 2015.

 

 

 

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: September 10, 2015    
  By: /s/ ANDREW NORTH                         
    Name:  Andrew North
    Title:     Chief Financial Officer

 

 

 

EXHIBIT INDEX

 

No.

 

 

 

Description

 

99.1   Earnings release of The Gymboree Corporation dated September 10, 2015.

 

 

 

 

EXHIBIT 99.1

 

 

 

 

 

 

 

Investor Relations contact:

Tel: 415-278-7933

investor_relations@gymboree.com

 

Media Relations contact:

Tel: 415-278-7493

media_relations@gymboree.com

 

The Gymboree Corporation Reports Second Quarter Fiscal 2015 Results

 

·Net Sales of $273.5 million, an increase of 3.5% compared to the second quarter of fiscal 2014

·Comparable sales (including online sales) increased 2% during the second quarter of fiscal 2015

·Adjusted EBITDA was $11.1 million for the second quarter of fiscal 2015 compared to $9.6 million for the second quarter of fiscal 2014, an increase of 15.7%

 

San Francisco, Calif., September 10, 2015 – The Gymboree Corporation (the “Company”) today reported consolidated financial results for the second fiscal quarter ended August 1, 2015.

 

Second Quarter Results (13-weeks ended August 1, 2015 versus 13-weeks ended August 2, 2014)

 

·Net sales were $273.5 million, compared to $264.3 million in the second quarter of fiscal 2014;
·Comparable sales (including online stores) increased 2%;
·Gross profit was $100.7 million, or 36.8% of net sales, compared to $96.4 million, or 36.5% of net sales, for the second quarter of fiscal 2014;
·Adjusted gross profit was $102.3 million, or 37.4% of net sales, compared to $98.2 million, or 37.1% of net sales, for the second quarter of fiscal 2014, an increase of 30 basis points;
·SG&A expense was $103.4 million, or 37.8% of net sales, compared to $107.1 million, or 40.5% of net sales, in the second quarter of fiscal 2014. The $3.8 million decline in SG&A expense was primarily driven by a decline in impairment charges of $3.2 million from the comparable prior year period;

 

 

 

 

·Adjusted SG&A expense was $100.8 million, or 36.9% of net sales, compared to $104.9 million, or 39.7% of net sales, in the second quarter of fiscal 2014;
·Adjusted EBITDA, defined as net loss attributable to The Gymboree Corporation before interest, income taxes and depreciation and amortization, adjusted for other items as described below, was $11.1 million compared to $9.6 million for the second quarter of fiscal 2014, an increase of $1.5 million;
·Adjusted EBITDA was negatively impacted by approximately $5 million as a result of receipt flow disruption driven by the west coast port slowdown; and
·Net loss attributable to The Gymboree Corporation for the quarter was $26.6 million compared to $31.2 million for the same quarter of fiscal 2014.

 

Adjusted EBITDA, Adjusted gross profit and Adjusted SG&A expense are not financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). For a description of Adjusted EBITDA and a reconciliation of these measures to GAAP measures, see “Non-GAAP Financial Measures” below and Exhibit D of this press release.

 

Balance Sheet Highlights

 

·As of the end of the second quarter of fiscal 2015, there were $70.0 million in borrowings outstanding under the Company’s $225 million asset-backed loan facility and approximately $95.7 million of undrawn availability after being reduced by letters of credit of $30.4 million.
·Capital expenditures were $4.4 million during the second quarter of fiscal 2015.
·Inventory balances at the end of the second quarter of fiscal 2015 were $243.0 million, compared to $223.7 million at the end of the second quarter of fiscal 2014. On a per square foot basis, inventory cost was up 9% over the second quarter of fiscal 2014. Inventory units were up on a mid-teens percentage basis.

 

As previously announced, on May 5, 2015, the Company entered into an agreement to sell and lease-back its distribution center located in Dixon, California. Net proceeds received from the sale were $25.9 million of which approximately $10.9 million were restricted to fund capital expenditures or reduce the Company’s liability under the Term loan.

 

Fiscal 2015 Business Outlook

 

The Company’s fiscal 2015 outlook is based on the current economic environment trends, as well as management expectations for the remainder of the year.

 

For the full year, the Company continues to expect Adjusted EBITDA to be in the range of $95 million to $105 million, which includes the net impact to Adjusted EBITDA of approximately $11 million resulting from the west coast port slowdown in the first half of the year. Based on this guidance, the Company expects to have sufficient liquidity during fiscal 2015 to service its debt and invest in the business to drive long-term growth.

 

 

 

 

Stores

 

During fiscal 2015, the Company continues to plan to open approximately 12 stores and expects to close approximately 30 to 40 stores.

 

Capital Expenditures

 

During fiscal 2015, the Company continues to anticipate spending approximately $25 million to $30 million for capital expenditures.

 

Non-GAAP Financial Measures

 

The Company defines "Adjusted EBITDA" as net loss attributable to The Gymboree Corporation before interest, income taxes, and depreciation and amortization ("EBITDA") adjusted for other items including, 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 and other non-recurring or unusual items. The Company is likely to exclude these items from Adjusted EBITDA in the future and may also exclude other similar items, the effect of which is uncertain but may be significant in amount. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts.

 

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 loss attributable to The Gymboree Corporation).

 

The live broadcast of the discussion of second quarter fiscal 2015 financial results and fiscal 2015 business outlook will be available to interested parties at 2:00 p.m. PT (5:00 p.m. ET) on Thursday, September 10, 2015. 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 & Media" and then "Conference Calls & Webcasts." A replay of the call will be available two hours after the broadcast through midnight PT, September 24, 2015, at 855-859-2056, passcode 93757199.

 

 

 

 

About The Gymboree Corporation

 

The Gymboree Corporation’s specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of August 1, 2015, the Company operated a total of 1,317 retail stores: 604 Gymboree® stores (550 in the United States, 48 in Canada, 1 in Puerto Rico and 5 in Australia), 172 Gymboree Outlet stores (171 in the United States and 1 in Puerto Rico), 150 Janie and Jack® shops (149 in the United States and 1 in Puerto Rico), and 391 Crazy 8® stores in the United States. The Company also operates online stores at www.gymboree.com, www.janieandjack.com and www.crazy8.com, and offers directed parent-child developmental play programs at 712 franchised and Company-operated Gymboree Play & Music® centers in the United States and 42 other countries.

 

Gymboree, Janie and Jack, Crazy 8 and Gymboree Play & Music are registered trademarks of The Gymboree Corporation.

 

Forward-Looking Statements

 

The foregoing financial information for the second quarter of fiscal 2015 is unaudited and subject to quarter-end and year-end adjustments. This press release includes forward-looking statements, including statements relating to The Gymboree Corporation's anticipated future financial performance, especially those set forth under the heading "Fiscal 2015 Business Outlook". These forward-looking statements generally can be identified by the use of words such as "anticipate," "expect," "plan," "could," "may," "will," "believe," "estimate," "forecast," "goal," "project," and other words of similar meaning. Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. The Company presently considers the following risks and uncertainties to be important factors that could cause actual results to differ materially from the Company's expectations: the recent disruptions in the west coast ports and the timing of the ports resuming normal operations, ongoing volatility in the commodities markets, uncertainties relating to high levels of consumer debt and general economic conditions, volatility in the financial markets, potential data breaches of the Company’s or the Company’s vendors or suppliers computer networks, the Company's ability to anticipate and timely respond to changes in trends, consumer preferences and customer reactions to new merchandise (particularly given the Company’s need to build up inventory significantly in advance of potential product sales), competitive market conditions, including promotional activities of the Company’s competitors, success in meeting the Company's delivery targets, 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, the limited data available in the future upon which to base its expectations for stabilizing sales trends, 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 31, 2015, filed with the Securities and Exchange Commission ("SEC") on May 1, 2015. The Company cautions investors to carefully consider the risks associated with, and not to place considerable reliance on, the forward-looking statements contained in this press release. The forward-looking statements in this press release speak only as of the date of this document, and the Company undertakes no obligation to update or revise any of these statements.

 

Gymboree, Janie and Jack, Crazy 8, and Gymboree Play & Music are registered trademarks of The Gymboree Corporation.

 

###

 

 

 

 

EXHIBIT A

 

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)

 

   13 Weeks Ended   26 Weeks Ended 
   August 1, 2015   August 2, 2014   August 1, 2015   August 2, 2014 
Net sales:                     
Retail   $256,991   $253,376   $518,723   $512,500 
Gymboree Play & Music    11,667    7,319    20,315    14,151 
Retail Franchise    4,807    3,608    10,496    9,662 
Total net sales    273,465    264,303    549,534    536,313 
Cost of goods sold, including buying and occupancy expenses    (172,805)   (167,939)   (343,517)   (331,591)
Gross profit    100,660    96,364    206,017    204,722 
Selling, general and administrative expenses    (103,366)   (107,140)   (208,076)   (209,430)
Operating loss    (2,706)   (10,776)   (2,059)   (4,708)
Interest income    23    68    42    115 
Interest expense    (21,631)   (20,455)   (42,707)   (40,829)
Other income (expense), net    142    (134)   32    (502)
Loss before income taxes    (24,172)   (31,297)   (44,692)   (45,924)
Income tax expense    (1,222)   (1,556)   (3,182)   (1,932)
Net loss    (25,394)   (32,853)   (47,874)   (47,856)
Net (income) loss attributable to noncontrolling interest     (1,168)   1,700    (1,713)   3,272 
Net loss attributable to The Gymboree Corporation   $(26,562)  $(31,153)  $(49,587)  $(44,584)

 

 

 

  

EXHIBIT B

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

   August 1,   January 31,   August 2, 
   2015   2015   2014 
ASSETS               
Current assets:               
Cash and cash equivalents  $23,497   $18,520   $24,879 
Accounts receivable   24,684    25,248    21,129 
Merchandise inventories   243,037    198,337    223,694 
Prepaid income taxes   2,596    2,599    3,076 
Prepaid expenses   19,399    6,821    19,684 
Deferred income taxes   9,124    6,824    8,172 
Total current assets   322,337    258,349    300,634 
                
Property and equipment, net   170,605    182,431    196,667 
Goodwill   373,446    373,834    758,777 
Other intangible assets, net   342,157    343,552    558,210 
Deferred financing costs   23,145    25,622    29,091 
Restricted cash   8,157    -    - 
Other assets   3,867    4,155    9,835 
                
Total assets  $1,243,714   $1,187,943   $1,853,214 
                
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY               
Current liabilities:               
Accounts payable  $123,995   $87,032   $112,638 
Accrued liabilities   95,079    94,805    86,231 
Line of credit borrowings   70,000    33,000    64,000 
Current obligation under capital lease   578    552    527 
Total current liabilities   289,652    215,389    263,396 
                
Long-term liabilities:               
Long-term debt   1,114,207    1,114,048    1,113,893 
Long-term sale-leaseback financing liability   26,516    -    - 
Long-term obligation under capital lease   2,555    2,850    3,133 
Lease incentives and other liabilities   51,770    53,677    52,664 
Unrecognized tax benefits   5,123    5,048    6,475 
Deferred income taxes   131,887    129,196    209,220 
Total liabilities   1,621,710    1,520,208    1,648,781 
                
Stockholders' (deficit) equity   (377,996)   (332,265)   204,433 
                
Total liabilities and stockholders' (deficit) equity  $1,243,714   $1,187,943   $1,853,214 

 

 

 

  

EXHIBIT C

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

   26 Weeks Ended 
   August 1, 2015   August 2, 2014 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(47,874)  $(47,856)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   20,896    22,534 
Amortization of deferred financing costs and accretion of original issue discount   3,758    3,515 
Interest rate cap contracts - adjustment to market   1,693    932 
(Gain) loss on disposal/impairment of assets   (93)   3,883 
Deferred income taxes   294    36 
Share-based compensation expense   1,852    2,269 
Other   (549)   21 
Change in assets and liabilities:          
Accounts receivable   637    739 
Merchandise inventories   (45,037)   (48,576)
Prepaid income taxes   (24)   (1,095)
Prepaid expenses and other assets   (12,831)   (174)
Accounts payable   37,001    10,673 
Accrued liabilities   (792)   (12,822)
Lease incentives and other liabilities   (897)   3,472 
Net cash used in operating activities   (41,966)   (62,449)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Capital expenditures   (7,506)   (16,523)
Increase in restricted cash   (10,863)   - 
Decrease in restricted cash   2,706    - 
Proceeds from sale of assets   353    - 
Other   40    (66)
Net cash used in investing activities   (15,270)   (16,589)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from ABL facility   283,000    218,000 
Payments on ABL facility   (246,000)   (154,000)
Proceeds from sale-leaseback financing liability   26,750    - 
Payments for deferred financing costs   (1,122)   - 
Payments on capital lease and sale-leaseback financing liability   (312)   (246)
Dividend payment to parent   (11)   - 
Capital contribution received by noncontrolling interest   -    992 
Net cash provided by financing activities   62,305    64,746 
Effect of exchange rate fluctuations on cash and cash equivalents   (92)   (258)
Net increase (decrease) in cash and cash equivalents   4,977    (14,550)
CASH AND CASH EQUIVALENTS:          
Beginning of period   18,520    39,429 
End of period  $23,497   $24,879 

 

 

 

EXHIBIT D

 

THE GYMBOREE CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands)

(Unaudited)

 

ADJUSTED EBITDA:

The Company defines "Adjusted EBITDA" as net income (loss) attributable to The Gymboree Corporation before interest expense, interest income, income tax expense/benefit, and depreciation and amortization ("EBITDA") adjusted for other items, including non-cash share-based compensation, loss on disposal/impairment of assets, 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"), non-recurring and unusual items.

 

Adjusted EBITDA is not a performance measure under U.S. generally accepted accounting principles ("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 loss attributable to The Gymboree Corporation to Adjusted EBITDA:

 

   13 Weeks Ended   26 Weeks Ended 
   August 1, 2015   August 2, 2014   August 1, 2015   August 2, 2014 
                 
Net loss attributable to The Gymboree Corporation  $(26,562)  $(31,153)  $(49,587)  $(44,584)
Reconciling items (a):                    
Interest expense   21,631    20,455    42,707    40,829 
Interest income   (10)   (14)   (17)   (66)
Income tax expense   613    791    1,918    1,390 
Depreciation and amortization (b)   9,813    11,018    20,108    21,804 
Non-cash share-based compensation expense   1,132    993    1,852    2,269 
Loss on disposal/impairment on assets   409    3,525    542    3,855 
Acquisition-related adjustments (c)   2,767    2,963    6,001    5,907 
Other (d)   1,271    983    3,137    188 
Adjusted EBITDA  $11,064   $9,561   $26,661   $31,592 

 

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

 

(b) Includes the following:

 

Amortization of intangible assets (impacts SG&A)  $383   $383   $767   $767 
Amortization of below and above market leases (impacts COGS)   (214)   (240)   (347)   (487)
   $169   $143   $420   $280 

 

(c) Includes the following:

 

Additional rent expense recognized due to the elimination of deferred rent and construction allowances in purchase accounting (impacts COGS)  $1,881   $2,063   $3,767   $4,131 
Sponsor fees, legal and accounting, as well as other costs incurred as a result of the Acquisition or refinancing (impacts SG&A)   886    900    2,234    1,776 
   $2,767   $2,963   $6,001   $5,907 

 

(d) Other is comprised of restructuring charges in the first half of fiscal 2015 and 2014, and non-recurring changes in reserves in the second quarter of fiscal 2015 and first quarter of fiscal 2014.

 

OTHER NON-GAAP FINANCIAL MEASURES:

 

   13 Weeks Ended   26 Weeks Ended 
   August 1, 2015   August 2, 2014   August 1, 2015   August 2, 2014 
                 
Gross profit as reported  $100,660   $96,364   $206,017   $204,722 
Acquisition-related adjustments   1,667    1,823    3,420    3,644 
Adjusted gross profit excluding Acquisition-related adjustments (non-GAAP measure)  $102,327   $98,187   $209,437   $208,366 

 

   13 Weeks Ended   26 Weeks Ended 
   August 1, 2015   August 2, 2014   August 1, 2015   August 2, 2014 
                 
SG&A as reported  $(103,366)  $(107,140)  $(208,076)  $(209,430)
Acquisition-related adjustments   1,269    1,283    3,001    2,543 
Other adjustments   1,271    983    3,137    188 
    2,540    2,266    6,138    2,731 
Adjusted SG&A excluding Acquisition-related and other adjustments (non-GAAP measure)  $(100,826)  $(104,874)  $(201,938)  $(206,699)

 

 

 

 

EXHIBIT E

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)

 

   For the 13 Weeks Ended August 1, 2015 
   Balance Before             
   Consolidation of VIEs   VIEs*   Eliminations   As Reported 
Net sales  $264,895   $11,081   $(2,511)  $273,465 
Cost of goods sold, including buying and occupancy expenses   (170,680)   (2,831)   706    (172,805)
Gross profit   94,215    8,250    (1,805)   100,660 
Selling, general and administrative expenses   (98,709)   (6,490)   1,833    (103,366)
Operating (loss) income   (4,494)   1,760    28    (2,706)
Other non operating (expense) income   (21,482)   16    -    (21,466)
(Loss) income before income taxes   (25,976)   1,776    28    (24,172)
Income tax expense   (614)   (608)   -    (1,222)
Net (loss) income   (26,590)   1,168    28    (25,394)
Net income attributable to noncontrolling interest   -    (1,168)   -    (1,168)
Net loss attributable to The Gymboree Corporation  $(26,590)  $-   $28   $(26,562)

 

   For the 13 Weeks Ended August 2, 2014 
   Balance Before             
   Consolidation of VIEs   VIEs*   Eliminations   As Reported 
Net sales  $259,392   $6,246   $(1,335)  $264,303 
Cost of goods sold, including buying and occupancy expenses   (166,259)   (2,011)   331    (167,939)
Gross profit   93,133    4,235    (1,004)   96,364 
Selling, general and administrative expenses   (102,881)   (5,241)   982    (107,140)
Operating loss   (9,748)   (1,006)   (22)   (10,776)
Other non operating (expense) income   (20,592)   71    -    (20,521)
Loss before income taxes   (30,340)   (935)   (22)   (31,297)
Income tax expense   (791)   (765)   -    (1,556)
Net loss   (31,131)   (1,700)   (22)   (32,853)
Net loss attributable to noncontrolling interest   -    1,700    -    1,700 
Net loss attributable to The Gymboree Corporation  $(31,131)  $-   $(22)  $(31,153)

 

   For the 26 Weeks Ended August 1, 2015 
   Balance Before             
   Consolidation of VIEs   VIEs*   Eliminations   As Reported 
Net sales  $535,033   $19,692   $(5,191)  $549,534 
Cost of goods sold, including buying and
occupancy expenses
   (340,242)   (5,058)   1,783    (343,517)
Gross profit   194,791    14,634    (3,408)   206,017 
Selling, general and administrative expenses   (199,697)   (11,663)   3,284    (208,076)
Operating (loss) income   (4,906)   2,971    (124)   (2,059)
Other non operating (expense) income   (42,639)   6    -    (42,633)
(Loss) income before income taxes   (47,545)   2,977    (124)   (44,692)
Income tax expense   (1,918)   (1,264)   -    (3,182)
Net (loss) income   (49,463)   1,713    (124)   (47,874)
Net income attributable to noncontrolling interest   -    (1,713)   -    (1,713)
Net loss attributable to The Gymboree Corporation  $(49,463)  $-   $(124)  $(49,587)

 

   For the 26 weeks Ended August 2, 2014 
   Balance Before             
   Consolidation of VIEs   VIEs*   Eliminations   As Reported 
Net sales  $528,536   $11,650   $(3,873)  $536,313 
Cost of goods sold, including buying and
occupancy expenses
   (328,697)   (3,313)   419    (331,591)
Gross profit   199,839    8,337    (3,454)   204,722 
Selling, general and administrative expenses   (201,841)   (11,034)   3,445    (209,430)
Operating loss   (2,002)   (2,697)   (9)   (4,708)
Other non operating expense   (41,183)   (33)   -    (41,216)
Loss before income taxes   (43,185)   (2,730)   (9)   (45,924)
Income tax expense   (1,390)   (542)   -    (1,932)
Net loss   (44,575)   (3,272)   (9)   (47,856)
Net loss attributable to noncontrolling interest   -    3,272    -    3,272 
Net loss attributable to The Gymboree Corporation  $(44,575)  $-   $(9)  $(44,584)

 

 

 

 

EXHIBIT E (continued)

 

THE GYMBOREE CORPORATION

CONDENSED CONSOLIDATING BALANCE SHEETS

(In thousands)

(Unaudited)

 

   August 1, 2015 
   Balance Before             
   Consolidation of VIEs   VIEs*   Eliminations   As Reported 
Current assets  $304,808   $19,769   $(2,240)  $322,337 
Non-current assets   916,610    4,767    -    921,377 
Total assets  $1,221,418   $24,536   $(2,240)  $1,243,714 
                     
Current liabilities  $279,221   $12,373   $(1,942)  $289,652 
Non-current liabilities   1,331,588    470    -    1,332,058 
Total liabilities   1,610,809    12,843    (1,942)   1,621,710 
                     
Total stockholders' deficit   (389,391)   -    (298)   (389,689)
Noncontrolling interest   -    11,693    -    11,693 
Total liabilities and stockholders' deficit  $1,221,418   $24,536   $(2,240)  $1,243,714 

 

   January 31, 2015 
   Balance Before             
   Consolidation of VIEs   VIEs*   Eliminations   As Reported 
Current assets  $243,682   $16,222   $(1,555)  $258,349 
Non-current assets   924,367    5,227    -    929,594 
Total assets  $1,168,049   $21,449   $(1,555)  $1,187,943 
                     
Current liabilities  $205,674   $11,088   $(1,373)  $215,389 
Non-current liabilities   1,304,384    435    -    1,304,819 
Total liabilities   1,510,058    11,523    (1,373)   1,520,208 
                     
Total stockholders' deficit   (342,009)   -    (182)   (342,191)
Noncontrolling interest   -    9,926    -    9,926 
Total liabilities and stockholders' deficit  $1,168,049   $21,449   $(1,555)  $1,187,943 

 

   August 2, 2014 
   Balance Before             
   Consolidation of VIEs   VIEs*   Eliminations   As Reported 
Current assets  $286,407   $15,567   $(1,340)  $300,634 
Non-current assets   1,547,311    5,269    -    1,552,580 
Total assets  $1,833,718   $20,836   $(1,340)  $1,853,214 
                     
Current liabilities  $256,936   $7,652   $(1,192)  $263,396 
Non-current liabilities   1,384,986    399    -    1,385,385 
Total liabilities   1,641,922    8,051    (1,192)   1,648,781 
                     
Total stockholders' equity   191,796    -    (148)   191,648 
Noncontrolling interest   -    12,785    -    12,785 
Total liabilities and stockholders' equity  $1,833,718   $20,836   $(1,340)  $1,853,214 

 

* The Variable Interest Entities ("VIEs") include 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.