Tatyana Designs Reports First Quarter 2014 Results
May 27 2014 - 9:00AM
Tatyana Designs, Inc. (the "Company") (OTC
Pink:TATD)
, a growing designer, manufacturer and
retailer of retro inspired contemporary designs, today posted
financial results for the first quarter of 2014.
For the three months ended March 31, 2014:
- As previously announced the severe weather challenges resulted
in sporadic daily boutique closings and reduced consumer traffic
consistent with the reports of many other retailers in Q1. The
reduced traffic negatively impacted revenues, margins and operating
costs.
- Following growth of 43% in 2013 the Company reported net sales
of $3.0 million, comparable to $3.1 million during the first
quarter of 2013.
- During Q1 the Company announced the rebranding of its boutiques
as "Tatyana®", to reflecting the inspiration of founding fashion
designer Tatyana Khomyakova. This change increased operating costs
during Q1.
- Adjusted EBITDA for the first three months of 2013 was a loss
of $349,000 (see discussion below and accompanying table for
non-GAAP measures) and the Company used $88,000 in cash from
operating activities.
- While margins were slightly improved from the prior year Q1,
the loss resulted from a 25% increase in selling, general and
administrative costs. These costs increased as the Company operated
four additional boutiques in Q1 of 2014 and incurred costs
associated with rebranding. The Company also invested in the
development of expanded e-commerce and mobile platforms that are
expected to contribute to increased revenues during future
quarters.
- The Company ended the quarter at March 31, 2014 with $541,000
cash, working capital of $1.5 million and inventory and inventory
deposits of $3.0 million.
- In April 2014 the Company announced proceeds from a $1.5
million convertible note financing and the addition of retail
veteran Sam Battistone to the Board of Directors.
"As we previously announced, Q1 was a very challenging retail
environment due primarily to extended periods of extreme weather,"
said Jan Glaser, co-CEO and treasurer of Tatyana Designs, Inc. "We
are seeing improved traffic and sales in Q2 and are optimistic
about the balance of 2014. While continuing our rebranding
initiative we are applying the new investment to building a robust
mobile app platform, expanding our e-commerce consumer reach and
growing our business."
Non-GAAP Information - This press release
includes non-GAAP EBITDA and Adjusted EBITDA (adjusted for non-cash
deferred rent and stock-based compensation) each a non-GAAP
financial measure. The Company has reconciled these non-GAAP
financial measures with the most directly comparable GAAP financial
measures in tables accompanying this release. The Company
believes that these non-GAAP financial measures not only provide
its management with comparable financial data for internal
financial analysis but also provide meaningful supplemental
information to investors. Specifically, these non-GAAP financial
measures allow investors to better understand the performance of
the Company's business as it grows. The Company's presentation of
non-GAAP financial measures should not be construed to imply that
its future results will be unaffected by any such
adjustments. The Company has provided this information as a
means to evaluate the results of its ongoing operations. Other
companies in the Company's industry may calculate these items
differently than it does. Each of these measures is not a
measure of performance under GAAP and should not be considered as a
substitute for the most directly comparable financial measures
prepared in accordance with GAAP. Non-GAAP financial measures
have limitations as analytical tools, and investors should not
consider them in isolation or as a substitute for analysis of the
Company's results as reported under GAAP.
About the Company - Based in Las Vegas, Nevada,
Tatyana Designs, Inc. is a growing retailer specializing in
contemporary designs inspired by the 1940's and 50's – the "Golden
Age" of fashion. The Company owns significant trademark and
license rights. The merchandise offered through the chain of retail
boutiques, e-commerce and wholesale divisions offer retro elegance
for the modern woman through a diverse mix of high-quality and
attractively priced apparel, jewelry, accessories and gifts. The
Company's boutiques and e-commerce target the 18-35 year-old,
fashion conscious female customer, but women of all ages are
attracted to the unique retro inspired, yet modern, look. New
product styles are presented monthly. For more information on the
company please visit the Web site at www.tatyanadesigns.com.
Cautionary note on forward-looking statements:
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. Such
forward-looking statements reflect the Company's current
expectations or beliefs concerning future events and are subject to
various risks and uncertainties that may cause actual results to
differ materially from those that we expected, including: the costs
and effects of our rebranding and related disputes including
current litigation; possible adverse changes in general economic
conditions and their impact on consumer confidence and spending;
possible inability to predict and respond in a timely manner to
changes in consumer demand; possible loss of key management or
inability to attract and retain the talent required for our
business; possible inability to maintain and enhance our brands;
possible inability to successfully implement our growth strategies
or manage our growing business; possible inability to successfully
open new boutiques and expand e-commerce business as planned; and
possible inability to sustain levels of comparable-boutique sales.
For a discussion of these and other risks and uncertainties
that could cause actual results to differ materially from those
contained in our forward-looking statements, please refer to the
Company's most recent public corporate documents and risk factors
discussed therein (www.otcmarkets.com/stock/TATD/filings). We
undertake no obligation to publicly update or revise any
forward-looking statement. Future results may differ materially
from the Company's current expectations.
Tatyana Designs,
Inc. |
Condensed Consolidated
Balance Sheets |
(000's omitted except
per share amount) |
(unaudited) |
|
March 31, |
December 31, |
|
2014 |
2013 |
|
$ |
$ |
ASSETS |
|
|
Current |
|
|
Cash |
541 |
683 |
Inventories |
2,778 |
2,576 |
Receivables and other |
205 |
338 |
Total current
assets |
3,524 |
3,597 |
Property and equipment,
net |
707 |
698 |
Deferred income
taxes |
572 |
409 |
Deposits |
443 |
443 |
Total assets |
5,246 |
5,147 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current |
|
|
Accounts payable and accruals |
1,407 |
1,061 |
Bank debt |
226 |
202 |
Due stockholder |
419 |
376 |
Total current
liabilities |
2,052 |
1,639 |
Deferred rent |
1,105 |
1,080 |
Bank debt - long term |
409 |
472 |
6% Convertible notes |
300 |
300 |
Total liabilities |
3,866 |
3,491 |
Stockholders'
equity |
1,380 |
1,656 |
Total liabilities and
stockholders' equity |
5,246 |
5,147 |
|
Tatyana Designs,
Inc. |
Condensed Consolidated
Statements of Operations |
(000's omitted except
per share amount) |
(unaudited) |
|
Three Months
Ended |
|
March 31, |
|
2014 |
2013 |
|
$ |
$ |
Net sales |
2,980 |
3,131 |
Cost of revenues |
926 |
1,015 |
Gross profit |
2,054 |
2,116 |
Selling, general and
administrative |
2,495 |
1,986 |
Income (loss) from
operations |
(441) |
130 |
Other expenses |
12 |
9 |
Income before income
tax |
(453) |
121 |
Income tax expense
(benefit) |
(163) |
49 |
Net income (loss) |
(290) |
72 |
|
|
|
Basic and diluted earnings per common
share |
($0.02) |
$0.01 |
|
|
|
Weighted average shares outstanding: |
|
|
Basic and diluted shares |
12,185 |
11,935 |
|
|
|
Tatyana Designs,
Inc. |
GAAP to Non-GAAP
Reconciliations |
(000's
omitted) |
(unaudited) |
|
Three Months
Ended |
|
March 31, |
|
2014 |
2013 |
|
$ |
$ |
Reconciliation of net
income (loss) to EBITDA: |
|
Net income (loss) |
(290) |
72 |
Adjustments: |
|
|
Interest |
17 |
20 |
Depreciation |
48 |
29 |
Taxes |
(163) |
49 |
EBITDA |
(388) |
170 |
|
|
|
Reconciliation of net
income (loss) to Adjusted EBITDA: |
Net income (loss) |
(290) |
72 |
Adjustments: |
|
|
Interest |
17 |
20 |
Depreciation |
48 |
29 |
Taxes |
(163) |
49 |
Stock-based compensation |
14 |
22 |
Non-cash increase deferred rent |
25 |
156 |
Adjusted EBITDA |
(349) |
348 |
CONTACT: FOR FURTHER INFORMATION CONTACT:
Jan Glaser
702.458.1632 Ext 5
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