The Walking Company Holdings, Inc. said consolidated net sales for the third quarter ended Sept. 30, 2008 were $59.5 million, a 5.2% increase from $56.6 million in the prior period. The company said this increase was primarily due to the addition of 39 new The Walking Company (TWC) stores, offset by the closure of 67 Big Dogs stores.
The company had a total of 276 stores opened (205 TWC stores and 71 Big Dogs stores) at the end of Sept. 30, 2008, as compared to 303 stores (165 TWC stores and 138 Big Dogs stores) as of Sept. 30, 2007.
Comparative retail store sales increased 4.8% for the third quarter 2008 (1.5% increase for TWC, and a 12.6% increase for Big Dogs). Consolidated gross profit decreased to $28.7 million or 48.2% of sales in the third quarter 2008, as compared with $30.2 million or 53.4% of sales in the third quarter 2007. The overall decrease in consolidated gross profit is primarily the result of the planned liquidation of Big Dogs inventory. TWC gross margin was 50.1% compared to 51.6% last year. Big Dogs' gross margin decreased to 43.4% from 56.8% last year.
Consolidated operating expenses in the third quarter 2008 were $31.2 million or 53.1% of consolidated net sales, compared to $29.3 million or 51.7% in 2007. Consolidated operating loss for the third quarter 2008 was $2.9 million, compared to income of $0.9 million for the third quarter 2007. The increase in operating expenses as a percentage of sales and the decrease in operating income, are largely attributable to the reduction in Big Dogs' revenue and contribution ($1.3 million was recorded for store closure expense). As a result, the consolidated fully diluted net loss per share decreased to 27 cents per share as compared with 1 cent per share last year.
THE WALKING COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)Three Months Ended Nine Months Ended
September 30, September 30,
————- ————- ————- ————-
2008 2007 2008 2007
————- ————- ————- ————-NET SALES $ 59,470,000 $ 56,554,000 $ 161,869,000 $ 156,632,000
COST OF GOODS
SOLD 30,779,000 26,359,000 81,264,000 72,640,000
————- ————- ————- ————-
GROSS PROFIT 28,691,000 30,195,000 80,605,000 83,992,000
————- ————- ————- ————-
OPERATING
EXPENSES:
Selling,
marketing and
distribution 27,255,000 25,388,000 79,492,000 76,304,000
General and
administrative 1,880,000 2,020,000 5,883,000 6,495,000
Depreciation
and
amortization 2,429,000 1,843,000 7,008,000 5,331,000
————- ————- ————- ————-
Total
operating
expenses 31,564,000 29,251,000 92,383,000 88,130,000
————- ————- ————- ————-
INCOME (LOSS)
FROM
OPERATIONS (2,873,000) 944,000 (11,778,000) (4,138,000)
INTEREST INCOME – 2,000 2,000 8,000
INTEREST
EXPENSE (1,032,000) (1,173,000) (3,139,000) (3,010,000)
————- ————- ————- ————-
LOSS BEFORE
BENEFIT FROM
INCOME TAXES (3,905,000) (227,000) (14,915,000) (7,140,000)
BENEFIT FROM
INCOME TAXES (1,366,000) (87,000) (5,221,000) (2,678,000)
————- ————- ————- ————-
NET LOSS $ (2,539,000) $ (140,000) $ (9,694,000) $ (4,462,000)
============= ============= ============= =============
NET LOSS PER
SHARE
BASIC $ (0.27) $ (0.01) $ (1.02) $ (0.47)
============= ============= ============= =============
DILUTED $ (0.27) $ (0.01) $ (1.02) $ (0.47)
============= ============= ============= =============WEIGHTED
AVERAGE SHARES
OUTSTANDING:BASIC 9,541,000 9,457,000 9,513,000 9,403,000
============= ============= ============= =============
DILUTED 9,541,000 9,457,000 9,513,000 9,403,000
============= ============= ============= =============
