Results for the Twenty-Six-Week Period Ended July 28, 2012

  • Total net sales were $197.1 million, as compared to $216.0 million for the twenty-six weeks ended July 30, 2011. Same-store sales decreased 4.9% in the first half of fiscal 2012.
  • Operating loss totaled $15.6 million, and included a $5.5 million pre-tax, non-cash benefit related to restructuring charges. This compares to an operating loss of $14.6 million for the comparable twenty-six week period last year.
  • Net loss for the twenty-six weeks ended July 28, 2012 was $15.6 million, or $0.44 per diluted share, which incorporates a tax provision of approximately $0.1 million and a $5.4 million after-tax, or $0.15 per share, non-cash benefit related to restructuring charges. This compares to a net loss of $14.4 million, or $0.41 per diluted share, for the twenty-six weeks ended July 30, 2011.

Balance Sheet Highlights and Capital Expenditures

Cash, cash-equivalents and investments totaled $40.5 million as of July 28, 2012, up $6.8 million from $33.7 million at the end of the first quarter of fiscal 2012. Inventory totaled $38.7 million as of July 28, 2012, compared to $39.7 million as of July 30, 2011.

During the second quarter of fiscal 2012, the Company entered into a new senior secured revolving credit facility in the amount of up to $50 million with Wells Fargo Capital Finance. This new credit facility provides committed revolving funding through July 2017 and replaces the Company’s $50 million credit facility that was scheduled to mature on June 30, 2014.

For the twenty-six-week period ended July 28, 2012, the Company had no outstanding borrowings under its current or prior revolving credit facility and capital expenditures totaled approximately $2.6 million.

Real Estate Restructuring Efforts

As part of the Company’s real estate restructuring efforts, all 103 stores identified for closure were closed as of July 28, 2012, with two of those closures occurring in the second quarter of this fiscal year. The Company also closed 15 additional stores in the normal course of business, for a total of 17 store closures in the second quarter ended July 28, 2012. The Company also opened one new dual store during the second quarter. For the current fiscal year, the Company intends to conserve cash by minimizing the number of new store openings.

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