American Apparel Posts 35% Q2 Sales Jump…

American Apparel, which is in the process of being acquired by
publicly-held Endeavor Acquisition Corp, reported second quarter 2007
revenues jumped 35% to $95.6 million from $71 million.

Retail sales vaulted 51% to $52.6 million from $34.9 million, with
same-store sales rising 24%. At June 30, American Apparel had 156
stores compared to 131 stores a year earlier. Wholesale results rose
18.4% to $43 million from $36.4 million.

Gross margins significantly improved to 54.7% from 47.6%. Operating expenses increased slightly, to 41.9% from 40%.

Pro Forma Adjusted EBITDA and certain adjustments and exclusions
equaled $18 million for Q207, representing a 70% increase over $10.6
million for Q206. Net income grew to $4.5 million from $2.3 million.

About The Author

American Apparel Posts 35% Q2 Sales Jump

American Apparel recorded second quarter sales of $95.6 million, a 35% increase over sales of $71.0 million for the same period last year. Retail sales increased 51% to $52.6 million for the second quarter of 2007 as compared to $34.9 million for the same period in 2006, with same-store sales for stores open at least 12 months rising 24%. At June 30, 2007, American Apparel had 156 stores as compared to 131 stores at June 30, 2006. Wholesale results were $43.0 million for the 2007 second quarter as compared to $36.3 million for the 2006 second quarter, an increase of 19%.


Pro Forma Adjusted EBITDA and certain adjustments and exclusions equaled $18.0 million for the second quarter ended June 30, 2007. This represents a 70% increase over pro forma adjusted EBITDA of $10.6 million for the three months ended June 30, 2006. The non-cash and other adjustment items in the quarterly comparisons per the acquisition agreement include deferred rent, litigation/legal expenses and business combination expenses not capitalized. These adjustments totaled approximately $1.3 million for the three months ended June 30, 2007 as compared to approximately $1.0 million for the three months ended June 30, 2006.


Dov Charney, Chief Executive Officer of American Apparel stated: “After reviewing the financial results for the first half of 2007, I am very excited about the growth that the company has experienced so far this year. Despite a challenging retail environment, the second quarter was the most successful period in American Apparel's history. We are pleased that our product offering has appealed to so many customers and we are eager to introduce the vibrant, emerging brand we have developed to metropolitan adults around the world. In the months ahead, we look forward to building upon the strong financial performance of the first half of 2007.”


“The fortuitous timing of our refinancing this past July is providing us with the liquidity to continue to enhance the value of the American Apparel business, while we work patiently towards closing the merger with Endeavor,” added Adrian Kowalewski, American Apparel's Director of Corporate Finance and Development.


For the six month period ended June 30, 2007, American Apparel reported combined sales of $169.1 million. This was a 30% increase over sales of $130.4 million for the six month period ended June 30, 2006. American Apparel’s retail sales for the first two quarters of 2007 were $90.8 million, an increase of 55% over the $58.7 million of sales in the comparable period for 2006. Wholesale sales for the six month period ended June 30, 2007 was $78.3 million, a 9% increase over the $71.8 million for the six months ended June 30, 2006.


Pro Forma Adjusted EBITDA equaled $27.6 million for the six months ended June 30, 2007. This represents a 68% increase over pro forma adjusted EBITDA of $16.4 million for the six months ended June 30, 2006. The non-cash and other adjustment items in the quarterly comparisons per the acquisition agreement include deferred rent, litigation/legal expenses and business combination expenses not capitalized. These adjustments totaled approximately $1.7 million for the six months ended June 30, 2007 as compared to approximately $2.1 million for the six months ended June 30, 2006.


 






















































































































































































































































American Apparel, Inc. and Subsidiaries (AAI)


Selected Historical Consolidated Financial Information


(in thousands of dollars)

     
Three Months Ended June 30,   Six Months Ended June 30,
2007   2006   2007   2006
(unaudited)   (unaudited)

(unaudited)

  (unaudited)
Consolidated Statements of Income:
Net sales $ 88,215 $ 67,294 $ 157, 248 $ 123,238
Cost of sales   39,934     35,200     70,770     64,242
 
Gross profit 48,281 32,094 86,478 58,996
 
Operating expenses   36,976     26,974     69,304     51,645
 
Income from operations 11,305 5,120 17,174 7,351
Interest expense 4,422 2,634 8,096 5,042
Other expense (income)   267     (278)     156     (107)
Income before income taxes 6,616 2,764 8,922 2,416
Income tax expense   2,077     427     2,674     392
 
Net income $ 4,539   $ 2,337   $ 6,248   $ 2,024

About The Author

Featured Partner

Get The Latest SSI Data Trend Report

Archives

Categories

Pin It on Pinterest

Share This