FREDERICK'S OF HOLLYWOOD GROUP INC 
By HOLLYWOOD, Calif., Oct. 25, 2013 /PRNewswire/ -- Frederick's of Hollywood Group Inc. (OTCQB: FOHL) ("Company") today announced the financial results for its fiscal 2013 fourth quarter and year ended July 27, 2013.
"The financial results for fiscal 2013 reflect the previous financial challenges we have faced, which impacted our ability to fully deliver on our merchandising strategy and overall brand strategy. However, we believe that these challenges can be overcome given the ongoing support we've received from certain vendors, partners and our lenders, and their commitment to the Frederick's of Hollywood brand," stated Thomas Lynch, the Company's Chairman and Chief Executive Officer.
Fiscal 2013 Fourth Quarter Compared to Fiscal 2012 Fourth Quarter:
-- Net loss applicable to common shareholders was $7.6 million or $(0.19)
per basic and diluted share, compared with a net loss of $4.0 million or
$(0.10) per basic and diluted share.
-- Net sales decreased 19.0% to $16.5 million from $20.3 million.
-- Comparable store sales decreased 12.6%.
-- Total store sales decreased 16.0% to $11.4 million.
-- Direct sales (e-commerce and catalog) decreased 22.0% to $4.8
million.
-- Other revenue, consisting of shipping revenue, commissions earned on
direct sell-through programs, breakage on gift cards and product
sales to the Company's licensing partner in the Middle East,
decreased 57.9% to $0.2 million.
-- Gross margin, as a percentage of net sales, decreased to 24.1% from
32.4%.
-- Selling, general and administrative expenses decreased to $9.1 million,
or 55.3% of sales, from $9.5 million or 46.7% of sales.
Fiscal Year Ended July 27, 2013 Compared with Fiscal Year Ended July 28, 2012:
-- Net loss applicable to common shareholders was $23.5 million, or $(0.60)
per basic and diluted share, compared with a net loss of $6.5 million,
or $(0.17) per basic and diluted share.
-- Net sales decreased 22.3% to $86.5 million from $111.4 million.
-- Comparable store sales decreased 16.7%.
-- Total store sales decreased 20.1% to $56.5 million.
-- Direct sales (e-commerce and catalog) decreased 23.5% to $27.4
million.
-- Other revenue decreased 46.5% to $2.5 million.
-- Gross margin, as a percentage of net sales, decreased to 29.1% from
37.4%
-- Selling, general and administrative expenses decreased to $43.0 million,
or 49.7% of sales, from $45.8 million or 41.1% of sales.
Forward Looking Statement
Certain of the matters set forth in this press release are forward-looking and involve a number of risks and uncertainties. These statements are based on management's current expectations or beliefs. Actual results may vary materially from those expressed or implied by the statements herein. Among the factors that could cause actual results to differ materially are the following: competition; working capital needs; competition; business conditions and industry growth; rapidly changing consumer preferences and trends; general economic conditions; continued compliance with government regulations; loss of key personnel; labor practices; product development; management of growth, increases in costs of operations or inability to meet efficiency or cost reduction objectives; timing of orders and deliveries of products; risks of doing business abroad; the ability to protect our intellectual property; and the other risks that are described from time to time in the Company's SEC reports. The Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.
About Frederick's of Hollywood Group Inc.
Frederick's of Hollywood Group Inc., through its subsidiaries, sells women's intimate apparel and related products under its proprietary Frederick's of Hollywood(®) brand through 112 specialty retail stores, a catalog and an online shop at http://www.fredericks.com/. With its exclusive product offerings including Seduction by Frederick's of Hollywood and the Hollywood Exxtreme Cleavage(®) bra, Frederick's of Hollywood is the Original Sex Symbol(®).
Our press releases and financial reports can be accessed on our corporate website at http://www.fohgroup.com.
This release is available on the KCSA Strategic Communications Web site at http://www.kcsa.com.
CONTACT:
Frederick's of Hollywood Group Inc.
Thomas Rende, CFO
(212) 779-8300
Investor Contacts:
Todd Fromer / Garth Russell
KCSA Strategic Communications
212-896-1215 / 212-896-1250
tfromer@kcsa.com / grussell@kcsa.com
(Tables Below)
FREDERICK'S OF HOLLYWOOD GROUP INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands)
July 27, July 28,
2013 2012
---- ----
ASSETS
CURRENT ASSETS:
Cash $201 $741
Accounts receivable 926 997
Merchandise inventories 11,333 12,915
Prepaid expenses and other current assets 815 952
Deferred income tax assets 93 48
Total current assets 13,368 15,653
PROPERTY AND EQUIPMENT, Net 3,196 6,806
INTANGIBLE ASSETS 18,259 18,259
OTHER ASSETS 1,376 756
TOTAL ASSETS $36,199 $41,474
======= =======
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Revolving credit facilities $6,078 $7,356
Accounts payable and other accrued expenses 19,639 14,623
Total current liabilities 25,717 21,979
DEFERRED RENT AND TENANT ALLOWANCES 3,006 3,887
TERM LOANS 14,068 9,039
DEFERRED INCOME TAX LIABILITIES 7,397 7,352
WARRANT LIABILITY 3,402 -
OTHER 10 -
---
TOTAL LIABILITIES 53,600 42,257
TOTAL SHAREHOLDERS' DEFICIENCY (17,401) (783)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY $36,199 $41,474
======= =======
FREDERICK'S OF HOLLYWOOD GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
Three Months Ended Year Ended
(Unaudited)
----------
July 27, 2013 July 28, 2012 July 27, 2013 July 28, 2012
------------- ------------- ------------- -------------
Net sales $16,471 $20,342 $86,507 $111,406
Cost of goods sold, buying and occupancy 12,503 13,761 61,328 69,782
------ ------ ------ ------
Gross profit 3,968 6,581 25,179 41,624
Selling, general and administrative expenses 9,108 9,506 42,968 45,757
Loss on abandonment - - 755 -
Impairment of long-lived assets 889 - 2,184 -
--- --- ----- ---
Operating loss (6,029) (2,925) (20,728) (4,133)
Other income/(expense)
Interest expense, net (625) (925) (2,137) (2,224)
Fair value (loss)/gain on warrant (571) - 381 -
---- --- --- ---
Loss before income tax benefit/(provision) (7,225) (3,850) (22,484) (6,357)
Income tax benefit/(provision) 37 (25) (38) (75)
--- --- --- ---
Net loss (7,188) (3,875) (22,522) (6,432)
Less: Preferred stock dividends 431 84 933 84
--- --- --- ---
Net loss applicable to common shareholders $(7,619) $(3,959) $(23,455) $(6,516)
======= ======= ======== =======
Basic and diluted net loss per share applicable $(0.19) $(0.10) $(0.60) $(0.17)
to common shareholders
Weighted average shares outstanding - basic and 39,138 38,963 39,043 38,844
diluted
SOURCE Frederick's of Hollywood Group Inc.
