Crumbs Bake Shop, Inc. Fourth Quarter 2013 Net Sales Increased 5.4%

2014-03-20
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  • Net sales increased 5.4% to $11.4 million from $10.8 million for the same period last year. Store operating weeks increased 32.4% to 973 from 735 for the fourth quarter of 2013 as compared to fourth quarter of 2012.

    Crumbs Bake Shop, Inc. ("Crumbs") (NASDAQ: CRMB), the largest cupcake specialty store chain in the U.S., today reported financial results for the year ended December 31, 2013.

    Fourth Quarter 2013 Highlights as Compared to Fourth Quarter 2012 Highlights:

    • Net sales increased 5.4% to $11.4 million.
    • Store operating weeks increased 32.4% to 973 from 735.
    • Gross profit increased 5.3% to $6.0 million.
    • GAAP net loss attributable to controlling and non-controlling interests was $(5.8) million compared to a net loss attributable to controlling and non-controlling interests of $(6.4) million.
    • Adjusted EBITDA1, a non GAAP measure, was $(2.7) million compared to $(1.8) million.
    1. See financial tables for a reconciliation of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP measure, to GAAP results.

    Edward M. Slezak, Chief Executive Officer, said "We have known for quite some time now that we needed to evolve our business model.  During the fourth quarter we took the necessary steps to put ourselves in position to do just that.  Our focus for 2014 will be on executing our initiatives and strategies of licensing our brand for complimentary product categories, positioning ourselves to move toward a franchise store model, and continuing to close under-performing stores.  We believe these actions will put our business on a trajectory toward increased growth and vitality in the future."

    Fourth Quarter 2013 Financial Results

    Net sales increased 5.4% to $11.4 million from $10.8 million for the same period last year.  Store operating weeks increased 32.4% to 973 from 735 for the fourth quarter of 2013 as compared to fourth quarter of 2012.

    Cost of sales was $5.3 million compared to $5.1 million for the same period last year and remained relatively flat at 47.1% as a percentage of net sales.  Gross profit increased 5.3% to $6.0 million from $5.7 million for the fourth quarter of 2012.

    Staff expenses were $4.1 million compared to $5.4 million for the same period last year. 

    Occupancy expenses were $3.0 million compared to $2.7 million for the fourth quarter of 2012.

    General and administrative expenses were $1.0 million, or 9.1% of net sales, compared to $0.9 million, or 8.6% of net sales, for the same period last year.

    Adjusted EBITDA was $(2.7) million compared to $(1.8) million for the fourth quarter of 2012.  See financial tables for a reconciliation of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP measure, to GAAP results.

    The GAAP net loss attributable to the controlling and non-controlling interests was $(5.8) million compared to a net loss of $(6.4) million for the fourth quarter of 2012. 

    Store Closings

    While Crumbs opened one store in the fourth quarter of 2013, it closed 9 underperforming stores in that same period.  Year to date for 2014, Crumbs has closed an additional 6 underperforming stores.   The Company hopes to complete the process of closing under-performing stores before the end of third quarter of 2014.

    About Crumbs Bake Shop, Inc.

    The first Crumbs bake shop opened in March 2003 on the Upper West Side of Manhattan and is well known for its innovative and oversized gourmet cupcakes. The Company currently has 65 locations in 12 states and the District of Columbia.

    CRUMBS BAKE SHOP, INC. AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF OPERATIONS

    (in thousands, except per share data)

    Three Months Ended

    December 31,

    Years Ended

    December 31,

    2013

    2012

    2013

    2012

    Net sales

    $

    11,352

    $

    10,776

    $

    47,203

    $

    43,029

    Cost of sales

    5,349

    5,076

    21,707

    19,059

    Gross profit

    6,003

    5,700

    25,496

    23,970

    Operating expenses

    Selling expenses

    615

    395

    2,302

    1,377

    Staff expenses

    4,183

    5,447

    16,368

    15,517

    Occupancy expenses

    3,041

    2,720

    12,739

    10,026

    General and administrative

    1,029

    930

    3,995

    3,332

    New store expenses

    3

    129

    431

    452

    Depreciation and amortization

    731

    524

    2,637

    1,916

    Loss on disposal of property and equipment

    959

    4

    1,098

    18

    Loss on impairment of assets

    1,322

    1,869

    1,322

    1,869

    11,883

    12,018

    40,892

    34,507

    Loss from operations

    (5,880)

    (6,318)

    (15,396)

    (10,537)

    Other income (expense)

    Interest expense

    (163)

    -

    (403)

    -

    Interest and other income

    2

    3

    37

    22

    Abandoned projects

    (7)

    -

    (136)

    (111)

    Change in fair value of warrant liability

    273

    (109)

    55

    273

    105

    (106)

    (447)

    184

    Loss before income tax benefit

    (5,775)

    (6,424)

    (15,843)

    (10,353)

    Income tax benefit (expense)

    -

    -

    (2,386)

    7

    Net loss attributable to the 

    controlling and non-controlling interests

    (5,775)

    (6,424)

    (18,229)

    (10,346)

    Less: Net loss attributable to 

    non-controlling interest

    933

    1,063

    2,968

    2,651

    Net loss attributable to stockholders

    $

    (4,842)

    $

    (5,361)

    $

    (15,261)

    $

    (7,695)

    Net loss per common share, basic and diluted

    $

    (0.42)

    $

    (0.49)

    $

    (1.32)

    $

    (1.12)

    Weighted average number of common

    shares outstanding, basic and diluted

    11,631

    10,908

    11,600

    6,864

     

     

     

    CRUMBS BAKE SHOP, INC. AND SUBSIDIARIES

    CONSOLIDATED BALANCE SHEETS

    (in thousands, except per share data)

    December 31, 

    December 31, 

    2013

    2012

    ASSETS

    Current assets

    Cash 

    $

    893

    $

    6,270

    Trade receivables

    321

    259

    Inventories

    418

    559

    Prepaid rent

    -

    600

    Other current assets

    424

    410

    Total current assets

    2,056

    8,098

    Property and equipment, net

    14,598

    13,128

    Other assets

    Deferred tax asset

    -

    4,774

    Restricted certificates of deposit

    673

    673

    Intangible assets, net

    846

    448

    Capitalized lease costs

    754

    -

    Deposits

    239

    289

    Debt issuance costs

    838

    477

    Total other assets

    3,350

    6,661

    $

    20,004

    $

    27,887

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities

    Accounts payable and accrued expenses

    $

    3,785

    $

    2,080

    Payroll liabilities

    365

    357

    Sales tax payable

    182

    110

    Deferred licensing royalties

    17

    Gift cards and certificates outstanding

    258

    234

    Total current liabilities

    4,607

    2,781

    Long-term liabilities

    Deferred rent

    4,066

    3,791

    Payable to related parties pursuant to tax receivable agreement

    -

    2,387

    Warrant liability

    327

    382

    Convertible notes payable

    10,000

    -

    Total liabilities

    19,000

    9,341

    Commitments and contingencies

    Stockholders' equity

    Preferred stock, $.0001 par value; 1,000 shares authorized; 

    234 shares issued and outstanding at December 31, 2012 and

    390 shares issued and outstanding at December 31, 2011

    -

    -

    Common stock, $.0001 par value; 100,000 shares authorized;

    13,392 shares issued, 11,798 outstanding at December 31, 2012 and

    7,100 shares issued, 5,506 outstanding at December 31, 2011

    1

    1

    Additional paid-in capital

    39,805

    39,117

    Accumulated deficit

    (25,037)

    (9,776)

    Treasury stock, at cost

    (15,914)

    (15,914)

     

       Total Crumbs Bake Shop, Inc. stockholders' equity

    (1,145)

    13,428

    Non-controlling interest

    2,149

    5,118

    Total stockholders' equity

    1,004

    18,546

    $

    20,004

    $

    27,887

     

     

     

    CRUMBS BAKE SHOP, INC. AND SUBSIDIARIES

    RECONCILIATION OF ADJUSTED EBITDA TO NEAREST COMPARABLE GAAP MEASURE

    (in thousands)

    Three Months Ended December 31,

    Years Ended December 31,

    2013

    2012

    2013

    2012

    Net income (loss) attributed to the controlling

     

      and non-controlling interest

    $

    (5,775)

    $

    (6,424)

    $

    (18,229)

    $

    (10,346)

    Non-recurring expenses

    -

    -

    (20)

    -

    Stock-based compensation

    107

    1,974

    523

    2,256

    Deferred rent

    97

    134

    713

    758

    Depreciation and amortization

    731

    524

    2,637

    1,916

    Loss on disposal of property and equipment

    959

    4

    1,098

    18

    Loss on impairment of assets

    1,322

    1,869

    1,322

    1,869

    Interest expense

    163

    -

    403

    -

    Interest income

    (1)

    -

    (5)

    (3)

    Abandoned projects

    7

    -

    136

    111

    Change in fair value of warrant liability

    (273)

    109

    (55)

    (273)

    Income tax benefit

    -

    -

    2,386

    (7)

    Adjusted EBITDA

    $

    (2,663)

    $

    (1,810)

    $

    (9,091)

    $

    (3,701)



    Logos, product and company names mentioned are the property of their respective owners.

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