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American Apparel Q4 retail same-store sales up 40%

18
Mar '08

American Apparel Inc is pleased to report its financial results for the fourth quarter of 2007 and for the fiscal year ended December 31, 2007.

American Apparel reported unaudited consolidated net sales for the quarter ended December 31, 2007 of $111.2 million, a 48% increase over sales of $75.1 million for the quarter ended December 31, 2006.

Retail sales increased 85% to $68.3 million for the fourth quarter of 2007 as compared to $37.0 million for the same period in 2006, with same-store sales for stores open at least 12 months rising 40%.

Wholesale sales were $42.9 million for the 2007 fourth quarter as compared to $38.1 million for the 2006 fourth quarter, an increase of 13%. American Apparel ended the quarter with 182 stores, having added 19 net new stores in the period.

Net income for the fourth quarter of 2007 was $3.0 million, or $0.06 per diluted share. Net loss for the fourth quarter of 2006 was $1.5 million, or a loss of $0.03 per diluted share.

The results for the fourth quarter of 2007 include the recognition of a deferred tax benefit of $6.2 million relating to the Company's termination of its status as an S Corporation, which decreased the Company's income tax provision for the period.

Pro forma income, assuming American Apparel had not recognized the deferred tax benefit from the conversion from an S Corporation, would have resulted in net loss for the period of $1.6 million, or a loss of $0.03 per diluted share.

Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and certain adjustments and exclusions (“Adjusted EBITDA”) equaled $13.3 million for the fourth quarter ended December 31, 2007.

This represents a 56% increase over Adjusted EBITDA of $8.5 million for the three months ended December 31, 2006. The non-cash and other adjustment items in the quarterly comparisons include deferred rent, litigation expenses, business combination expenses not qualifying for capitalization, one-time employee bonuses, workers compensation adjustments, and inventory obsolescence reserves.

These adjustments totaled approximately $4.9 million for the three months ended December 31, 2007 as compared to approximately $3.4 million for the three months ended December 31, 2006.

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