American Apparel Reports Higher Sales, Larger LossMonday, August 12, 2013
American Apparel Inc. on Monday reported better sales and operating results in the second quarter, but its net loss deepened, largely due to refinancing-related costs.
After the markets closed, the Los Angeles apparel maker and retailer reported a net loss of $37.5 million (-34 cents a share), compared with a net loss of $15.3 million (-14 cents) in the same period a year earlier.
Revenue rose 9 percent to $162 million, with comparable same-store sales up 7 percent and wholesale net sales up 16 percent. The company’s adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) rose 4 percent to $7.9 million.
The quarter included $32.1 million in debt extinguishment and other charges related to an April refinancing deal that paid off loan and credit agreements with Lion Capital LLP and Crystal Financial LLC. Excluding those charges, the net loss would have been $10.9 million, the company said.
In addition, operating expenses rose 8 percent to $85.8 million. During the quarter, American Apparel began transitioning distribution activities to an automated facility in La Mirada. It also closed a distribution center in Montreal and an ancillary warehouse in Los Angeles. It said shipping disruptions to its stores and customers may have negatively affected sales.
“While the transition to a new distribution center and other supply chain initiatives negatively impacted the quarter, we are committed to making the necessary investments to reduce costs and improve our operating efficiency over the longer-term,” Chief Executive Dov Charney said in a statement.
Shares earlier closed up 3 cents, or 1.5 percent, to $1.99 on the NYSE Mkts. xchange, but fell 4.5 percent in after-hours trading.