Watch Live

Tweet TWEET

Body Central Corp. Announces Third Quarter 2012 Financial Results

Body Central Corp. Announces Third Quarter 2012 Financial Results

JACKSONVILLE, Fla., Nov. 1, 2012 (GLOBE NEWSWIRE) -- Body Central Corp.
(Nasdaq:BODY) today announced financial results for the third quarter and for
the thirty-nine week period ending September 29, 2012.

Highlights for the third quarter ended September 29, 2012:

  *Net revenues for the quarter increased 1.2% to $67.9 million, compared to
    $67.1 million for the third quarter of 2011.
  *Store sales rose 1.7% to $62.0 million driven by net store unit growth of
    16.4 % offset by a comparable-store sales decrease of 11.9%.
  *Income from operations was $196,000 as compared to $4.7 million in the
    third quarter of 2011. Included in the above numbers for 2012 is $600,000
    in severance costs related to the resignation of the former CEO, and for
    2011 is $350,000 in severance costs related to the former CFO.
  *Net income was $153,000, or $0.01 per diluted share based on 16.3 million
    weighted average shares outstanding. Excluding the CEO severance costs,
    net income for the third quarter of 2012 was $526,000 or $0.03 per diluted
    share. Net income for the third quarter of 2011 was $2.8 million, or $0.18
    per diluted share based on 16.2 million weighted average shares
    outstanding. Excluding the CFO severance costs, net income for the third
    quarter of 2011 was $3.1 million or $0.19 per diluted share.
  *The Company opened 7 new stores and closed 1 store during the third
    quarter and operated 263 stores as of September 29, 2012.

Highlights for the thirty-nine weeks ended September 29, 2012:

  *Net revenues increased 6.6% to $230.0 million from $215.8 million for the
    same period a year ago.
  *Store sales rose 6.6% to $201.3 million and comparable-store sales
    decreased 6.7% from the same period in 2011.
  *Income from operations was $15.2 million as compared to $21.6 million in
    the same period last year. Operating margin decreased to 6.6% of net
    revenues from 10.0% of net revenues for the same period last year.
    Excluding the above-mentioned severance costs for both periods, operating
    margin was 6.9% for the thirty-nine weeks ended September 29, 2012 as
    compared to 10.2% for the same period last year.
  *Net income was $9.5 million or $0.58 per diluted share as compared to net
    income of $13.6 million, or $0.85 per diluted share for the same period
    last year. Excluding the above-mentioned severance costs for both periods,
    net income was $9.9 million, or $0.61 per diluted share for the
    thirty-nine weeks ended September 29, 2012, as compared to net income
    $13.8 million, or $0.86 per diluted share for the same period last year.
  *The Company opened 26 new stores and closed 4 during the first three
    quarters of 2012.

Tom Stoltz, Body Central's COO, CFO and interim CEO, stated: "Our third
quarter results were in line with our expectations. We completed the
transition from summer clearance merchandise to fall and ended the quarter
with lower inventory levels on a per store basis. We now believe our
assortment of styles are more in line with customer preferences. We also
refined our test and reorder strategy by increasing the number of styles
tested and raising the sell-through hurdle rates for test merchandise. Our new
stores continue to perform well and we are on track to achieve our store
opening plan for 2012. Overall, we believe that we are taking the right steps
to get the Company on the path to sales and earnings recovery in 2013."

Balance Sheet highlights as of September 29, 2012:

Cash, cash equivalents and short-term investments were $36.9 million at the
end of the third quarter compared to $31.7 million at the end of the third
quarter in the prior year.

Inventories at the end of the third quarter were $20.9 million compared to
$20.6 million at the end of the third quarter of 2011. Average store
inventories decreased 8% from one year ago.

The Company had no long-term debt as of the end of the third quarter of 2012.

Reported results are preliminary and remain subject to adjustment until the
filing of our Form 10-Q with the SEC.

Outlook

For the fourth quarter of fiscal 2012, the Company expects net revenues in the
range of $82 million to $84 million, comparable sales to decrease 11% to 14%
and diluted earnings per share in the range of $0.19 to $0.22, based on
diluted weighted-average shares outstanding of 16.4 million.

For fiscal 2012, the Company expects net revenues in the range of $312 million
to $314 million, comparable sales to decrease 8% to 9% and diluted earnings
per share in the range of $0.80 to $0.83, based on diluted weighted-average
shares outstanding of 16.4 million. The guidance above excludes, on a pre-tax
basis, the $600,000 CEO severance costs incurred in the third quarter of this
year.

Conference Call Information

A conference call to discuss third quarter financial results is scheduled for
today, November 1, 2012, at 4:30 PM Eastern Time. The conference call will
also be webcast live at www.bodyc.com. To access the replay of this call,
please dial (877) 870-5176 and enter pin number 9468182. The replay is
available until November 15, 2012. A replay of this call will also be
available on the Investor Relations section of the Company's website,
www.bodyc.com, within two hours of the conclusion of the call and will remain
on the website for ninety days.

About Body Central

Founded in 1972, Body Central Corp. is a growing, multi-channel, specialty
retailer offering on trend, quality apparel and accessories at value prices.
As of October 31, 2012 the Company operated 267 specialty apparel stores in 24
states under the Body Central and Body Shop banners, as well as a direct
business comprised of a Body Central catalog and an e-commerce website at
www.bodyc.com. The Company targets women in their late teens and twenties from
diverse cultural backgrounds who seek the latest fashions and a flattering
fit. Stores feature an assortment of tops, dresses, bottoms, jewelry,
accessories and shoes sold primarily under the Company's exclusive Body
Central® and Lipstick® labels.

Safe Harbor Language

Certain statements in this release are "forward-looking statements" made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Words such as "guidance," "expects," "intends,"
"projects," "plans," "believes," "estimates," "targets," "anticipates," and
similar expressions are used to identify these forward-looking statements.
Forward-looking statements are based on our current expectations and
assumptions, which may not prove to be accurate. These statements are not
guarantees and are subject to risks, uncertainties and changes in
circumstances that are difficult to predict. Many factors could cause actual
results to differ materially and adversely from these forward-looking
statements. Among these factors are (1) our ability to identify and respond to
new and changing fashion trends, customer preferences and other related
factors; (2) our ability to execute successfully our growth strategy; (3)
changes in consumer spending and general economic conditions; (4) changes in
the competitive environment in our industry and the markets we serve,
including increased competition from other retailers; (5) our new stores or
existing stores achieving sales and operating levels consistent with our
expectations; (6) the success of the malls and shopping centers in which our
stores are located; (7) our dependence on a strong brand image; (8) our direct
business growing consistently with our growth strategy; (9) our information
technology systems supporting our current and growing business, before and
after our planned upgrades; (10) disruptions to our information systems in the
ordinary course or as a result of systems upgrades; (11) our dependence upon
key executive management or our inability to hire or retain additional
personnel; (12) disruptions in our supply chain and distribution facility;
(13) our lease obligations; (14) our reliance upon independent third-party
transportation providers for all of our product shipments; (15) hurricanes,
natural disasters, unusually adverse weather conditions, boycotts and
unanticipated events; (16) the seasonality of our business; (17) increases in
costs of fuel, or other energy, transportation or utilities costs and in the
costs of labor and employment; (18) the impact of governmental laws and
regulations and the outcomes of legal proceedings; (19) our maintaining
effective internal controls; and (20) our ability to protect our trademarks or
other intellectual property rights.

                              BODY CENTRAL CORP.

                                 (Unaudited)

NON-GAAP MEASURES

Net Income

The accompanying press release presents net earnings and highlights current
year and prior year nonrecurring items in the text. Management believes
excluding such items presents the Company's third quarter results on a more
comparable basis to the corresponding period in the prior year, thereby
providing investors with an additional perspective to analyze the results of
operations of the Company at September 29, 2012. The following table
reconciles GAAP net income and net income per diluted share ("EPS") to the
non-GAAP net income and income per diluted share, as adjusted:

                                                               
                        Thirteen Weeks Ended       Thirty-Nine Weeks Ended
                        September 29,  October 1,  September 29,  October 1,
                        2012           2011        2012           2011
                        (in thousands, except share
                         and per share data)
                        
Net income, as reported  $153          $2,848     $9,541        $13,581
Executive Officer        373            218         373            218
Severance ^a
Net income, as adjusted  $526          $3,066     $9,914        $13,799
                                                               
Net income per common                                           
share, as reported:
Basic                    $0.01        $0.18     $0.59        $0.86
Diluted                  $0.01        $0.18     $0.58        $0.85
                                                               
Net income per common                                           
share, as adjusted:
Basic                    $0.03        $0.19     $0.61        $0.88
Diluted                  $0.03        $0.19     $0.61        $0.86
                                                               
Weighted-average common                                         
shares outstanding:
Basic                    16,205,845     15,864,008  16,169,953     15,703,053
Diluted                  16,305,557     16,166,285  16,350,690     16,008,014
                                                               
^a On a pre-tax basis includes charges of $600,000 for CEO severance in the
third quarter of 2012 and $350,000 for CFO severance in the third quarter of
2011, within selling, general and administrative expenses.

                                                                
                                                                
BODY CENTRAL CORP.
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
                                                                
                                                                
                            Thirteen Weeks Ended     Thirty-Nine Weeks Ended
                            September 29, October 1, September 29, October 1,
                            2012          2011       2012          2011
                            (in thousands, except share
                             and per share data)
Net revenues                 $67,920      $67,110   $229,956     $215,764
Cost of goods sold,
including occupancy, buying, 46,399        44,531     154,440       140,401
distribution center and
catalog costs
Gross profit                 21,521        22,579     75,516        75,363
Selling, general and         19,718        16,577     55,820        49,974
administrative expenses
Depreciation and             1,607         1,342      4,469         3,815
amortization
Income from operations       196           4,660      15,227        21,574
Interest income, net of      (3)           (2)        (10)          (14)
interest expense
Other income, net of other   (45)          (39)       (104)         (206)
expense
Income before income taxes  244           4,701      15,341        21,794
Provision for income taxes   91            1,853      5,800         8,213
Net income                   $153         $2,848    $9,541       $13,581
                                                                
Net income per common share:                                     
Basic                        $0.01       $0.18    $0.59       $0.86
Diluted                      $0.01       $0.18    $0.58       $0.85
                                                                
Weighted-average common                                          
shares outstanding:
Basic                        16,205,845    15,864,008 16,169,953    15,703,053
Diluted                      16,305,557    16,166,285 16,350,690    16,008,014

                                                                  
                                                                  
BODY CENTRAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                                                  
                                                                  
                                                     September 29, October 1,
                                                      2012          2011
Assets                                                (in thousands)
Current assets                                                     
Cash and cash equivalents                             $22,679      $31,749
Short-term investments                                14,265       --
Accounts receivable                                   1,536         1,024
Inventories                                           20,860        20,631
Prepaid expenses and other current assets             7,516         5,312
Deferred tax asset, current                           2,168         1,925
Total current assets                                  69,024        60,641
                                                                  
Property and equipment, net of accumulated            30,860        19,861
depreciation and amortization
Goodwill                                              21,508        21,508
Intangible assets, net of accumulated amortization    16,574        16,688
Other assets                                          108           111
Total assets                                          $138,074     $118,809
                                                                  
Liabilities and Stockholders' Equity                               
Current liabilities                                                
Accounts payable                                      $8,547       $13,801
Accrued expenses and other current liabilities        18,966       17,367
Total current liabilities                             27,513        31,168
Other liabilities                                     8,608         6,347
Deferred tax liability, long-term                     4,577         4,542
Total liabilities                                     40,698        42,057
Commitments and contingencies                                      
Stockholders' equity                                  97,376        76,752
Total liabilities and stockholders' equity            $138,074     $118,809

                                                                  
                                                                  
BODY CENTRAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                                                  
                                                     Thirty-Nine Weeks Ended
                                                     September 29, October 1,
                                                      2012          2011
                                                     (in thousands)
Cash flows from operating activities                               
Net income                                            $9,541       $13,581
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                         4,469         3,815
Deferred income taxes                                 137           (178)
Tax benefits from stock-based compensation            (751)         (2,420)
Stock based compensation                              1,473         734
Amortization of premiums and discounts on             263           --
investments, net
Loss on disposal of property and equipment            82            11
Changes in assets and liabilities:                                 
Accounts receivable                                   1,071         235
Inventories                                           281           (2,261)
Prepaid expenses and other current assets             (488)         (1,380)
Other assets                                          (2)           (9)
Merchandise accounts payable                          (7,951)       (1,079)
Accrued expenses and other current liabilities        357           1,559
Income taxes receivable                               (1,983)       2,185
Other liabilities                                     732           2,659
Net cash provided by operating activities             7,231         17,452
                                                                  
Cash flows from investing activities                               
Proceeds from the sales of assets                     29            --
Purchases of property and equipment                   (13,158)      (6,201)
Purchase of intangible assets                         (179)         --
Purchases of short-term investments                   (24,582)      --
Proceeds from sales of short-term investments         1,051         --
Maturities of short-term investments                  9,000         --
Net cash used in investing activities                 (27,839)      (6,201)
                                                                  
Cash flows from financing activities                               
Proceeds from common stock offering, net of issuance  --            1,142
costs
Proceeds from exercise of stock options               543           734
Tax benefits from stock-based compensation            751           2,420
Net cash provided by financing activities             1,294         4,296
Net (decrease) increase in cash and cash equivalents  (19,314)      15,547
                                                                  
Cash and cash equivalents                                          
Beginning of year                                     41,993        16,202
End of period                                         $22,679      $31,749

CONTACT: Tom Stoltz
         Body Central Corp.
         Interim CEO, COO and CFO
         904-207-6720
         tstoltz@bodyc.com