American Apparel Q1 gross profit declines marginally

Income tax provision in the first quarter 2014 was $0.5 million versus $0.5 million for the first quarter 2013. In accordance with U.S. GAAP, the Company has discontinued recognizing potential tax benefits associated with net operating loss carryovers.

 

American Apparel, Inc., a vertically integrated manufacturer, distributor, and retailer of branded fashion-basic apparel, announced financial results #

Net loss for the first quarter 2014 was $5.5 million or $0.05 per common share, versus a net loss of $46.5 million, or $0.42 per common share for the first quarter 2013.

 

American Apparel, Inc., a vertically integrated manufacturer, distributor, and retailer of branded fashion-basic apparel, announced financial results #

Fully-diluted weighted average shares outstanding were 111.6 million in the first quarter 2014 versus 109.9 million for the first quarter 2013. As of May 1, 2014 there were approximately 173.5 million shares outstanding. As of April 30, 2014 the Company had $18.3 million available for borrowing under its revolving credit agreement.

 

American Apparel, Inc., a vertically integrated manufacturer, distributor, and retailer of branded fashion-basic apparel, announced financial results #

Explanation of Unrealized Gain (loss) of Change in Fair Value of Warrants

Lion Capital currently holds 24.5 million warrants to purchase American Apparel common stock at a price of $0.66 per share and as the share price of American Apparel's stock increases the fair value of the warrant liability recorded on the balance sheet increases and the Company records an expense to recognize the increase in the fair value of the warrant liability. 

 

American Apparel, Inc., a vertically integrated manufacturer, distributor, and retailer of branded fashion-basic apparel, announced financial results #

Conversely, when the share price of American Apparel's stock decreases, the Company records a gain to recognize the related reduction in the fair value of the warrant liability on the balance sheet. Although the income statement impacts associated with the warrants are appropriate and required under GAAP, they do not impact the operating performance of the Company nor do the credits and charges have an impact on cash balances since the liability recorded is not an obligation that will be settled with cash. Instead, these warrants will be reclassified to equity when they are exercised.

 

American Apparel, Inc., a vertically integrated manufacturer, distributor, and retailer of branded fashion-basic apparel, announced financial results #

Company Outlook

The Company reaffirms its prior estimate of Adjusted EBITDA for 2014 of $40 million to $50 million.

 

American Apparel, Inc., a vertically integrated manufacturer, distributor, and retailer of branded fashion-basic apparel, announced financial results #