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Operating profit margin improves at Gordmans
13 Sep '10
5 min read
Operating income increased 63.3% to $15.9 million, or 7.1% of sales, compared to $9.7 million, or 5.1% of sales in the prior year. Net income increased 65.9% to $9.7 million, or $0.60 per diluted share, compared to $5.8 million, or $0.37 per diluted share in the prior year.
Initial Public Offering
On August 4, 2010, the Company completed an initial public offering of 5,357,143 shares of common stock at a price to the public of $11.00 per share, of which 3,214,286 shares were sold by the Company and 2,142,857 shares were sold by certain selling shareholders.
Upon completing the offering, the Company and the selling shareholders received net proceeds of approximately $32.9 million and $21.9 million, respectively. In connection with the offering, the Company paid Sun Capital Partners Management V, LLC $0.6 million in transaction consulting fees and $7.5 million for termination of the consulting agreement and used approximately $18.2 million of its net proceeds to pay down borrowings under its revolving credit facility. The Company intends to use the remainder of its net proceeds for working capital and general corporate purposes.
Outlook
For the third quarter ending October 30, 2010, the Company currently expects total sales to be between $118 million and $120 million and comparable store sales to increase in the low single digits. The Company projects diluted earnings (loss) per share in the range of $(0.19) to $(0.17).
This guidance is based on a net income (loss) range of $(3.8) million to $(3.3) million and diluted shares outstanding of approximately 19.4 million. The expected loss for the third quarter includes one-time pre-tax charges of $10.6 million, or $(0.34) per diluted share on an after-tax basis, related to the initial public offering. The adjusted net income range is $2.8 million to $3.3 million and the adjusted diluted earnings per share range is $0.15 to $0.17 per diluted share.
For the fourth quarter ending January 29, 2011, we are forecasting total sales to be between $155 million and $160 million. We also expect to report net income in the range of $5.9 to $6.8 million and earnings per share in the range of $0.30 to $0.35, using a diluted share count of approximately 19.5 million.
Initial Public Offering
On August 4, 2010, the Company completed an initial public offering of 5,357,143 shares of common stock at a price to the public of $11.00 per share, of which 3,214,286 shares were sold by the Company and 2,142,857 shares were sold by certain selling shareholders.
Upon completing the offering, the Company and the selling shareholders received net proceeds of approximately $32.9 million and $21.9 million, respectively. In connection with the offering, the Company paid Sun Capital Partners Management V, LLC $0.6 million in transaction consulting fees and $7.5 million for termination of the consulting agreement and used approximately $18.2 million of its net proceeds to pay down borrowings under its revolving credit facility. The Company intends to use the remainder of its net proceeds for working capital and general corporate purposes.
Outlook
For the third quarter ending October 30, 2010, the Company currently expects total sales to be between $118 million and $120 million and comparable store sales to increase in the low single digits. The Company projects diluted earnings (loss) per share in the range of $(0.19) to $(0.17).
This guidance is based on a net income (loss) range of $(3.8) million to $(3.3) million and diluted shares outstanding of approximately 19.4 million. The expected loss for the third quarter includes one-time pre-tax charges of $10.6 million, or $(0.34) per diluted share on an after-tax basis, related to the initial public offering. The adjusted net income range is $2.8 million to $3.3 million and the adjusted diluted earnings per share range is $0.15 to $0.17 per diluted share.
For the fourth quarter ending January 29, 2011, we are forecasting total sales to be between $155 million and $160 million. We also expect to report net income in the range of $5.9 to $6.8 million and earnings per share in the range of $0.30 to $0.35, using a diluted share count of approximately 19.5 million.
Gordmans Stores Inc
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