Third Quarter Financial Results
Net sales for the third quarter of 2011 increased 18.3% to $8.9 million from $7.5 million in the same period last year. Store operating weeks increased 41% to 468 from 332.
Cost of sales increased 23.1% to $3.8 million from $3.1 million, and as a percentage of net sales, increased 1.7 percentage points to 42.5%. Gross profit increased 14.9% to $5.1 million from $4.4 million compared to the third quarter of 2010 due to higher net sales.
General and administrative expenses were $0.7 million, or 7.4% of net sales, compared to $0.3 million in the same period last year, or 4.7% of net sales as the Company incurred higher professional fees and public company costs.Adjusted EBITDA was negative $(0.7) million compared to $0.5 million in the same period last year. See financial tables for a reconciliation of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP measure, to GAAP results. GAAP net loss attributable to stockholders was $(0.9) million or $(0.17) per diluted share, compared to a net loss of ($39,000) or ($0.01) per diluted share in the same period last year. Store Development During the third quarter of 2011, the Company opened four stores in New York and Illinois and ended the three-month period with a total of 39 stores opened across six states and the District of Columbia. Outlook Management is suspending its previously announced guidance for 2011 net sales and adjusted EBITDA but is reaffirming its new store development outlook of 16-18 store openings within existing markets. For 2012, the Company will continue to open stores in both existing markets and new markets such as Boston and Philadelphia and intends to address its overall outlook development and financial outlook when it reports year-end results early next year.