Tatyana Designs Reports Second Quarter 2014 Results

        Print
| Source: Tatyana Designs, Inc.

LAS VEGAS, Aug. 29, 2014 (GLOBE NEWSWIRE) -- Tatyana Designs, Inc. (the "Company") (OTC Pink: TATD), a designer, manufacturer and retailer of retro inspired contemporary designs, today posted financial results for the second quarter of 2014.

For the six months ended June 30, 2014:

  • The Company reported net sales of $6.4 million, a 7.4% decline from $6.9 million for the first six months of 2013.
     
  • During 2014 the Company rebranded its boutiques as "Tatyana®", reflecting the inspiration of founding fashion designer Tatyana Khomyakova. This change increased operating costs for the first six months.
     
  • Adjusted EBITDA for the first six months of 2014 was a loss of $775,000 (see discussion below and accompanying table for non-GAAP measures).
     
  • While margins improved from the prior year they are subject to significant variability from period to period. The 2014 loss resulted from a 29% increase in selling, general and administrative costs. These costs increased as the Company operated additional boutiques in 2014 increasing rent and payroll costs and the Company incurred costs associated with rebranding.
     
  • The Company ended the quarter at June 30, 2014 with $512,000 cash, working capital of $2.5 million and inventory and inventory deposits of $3.3 million.
     
  • In April 2014 the Company obtained proceeds from a $1.5 million convertible note financing and retail veteran Sam Battistone joined the Board of Directors.
     
  • In July 2014 the Company engaged DMG Worldwide Consulting, LLC to provide services including strategic planning, budgeting, and financial reporting to assist the Company in responding to a challenging retail apparel environment.

Jan Glaser, co-CEO and treasurer of Tatyana Designs, Inc. reported, "The difficult economic and apparel marketplace conditions have greatly impacted the industry and our financial performance for 2014. However, we believe our offering of retro elegance for the modern woman is popular and enduring. Due to market and other factors we have not realized a sales rebound after the first quarter nor yet experienced expected results from our initiative to grow our e-commerce business. We are engaged in efforts to reduce fixed costs to improve financial results when the economy and consumer spending for apparel improves. In the meantime we will focus on those boutiques and business units that exhibit the greatest potential, evaluate closing underperforming boutiques and reducing fixed cost to enhance the bottom-line potential of the Company."

Non-GAAP Information - This press release includes non-GAAP EBITDA and Adjusted EBITDA (adjusted for non-cash deferred rent and stock-based compensation) each a non-GAAP financial measure. The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in tables accompanying this release. The Company believes that these non-GAAP financial measures not only provide its management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. Specifically, these non-GAAP financial measures allow investors to better understand the performance of the Company's business as it grows. The Company's presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. The Company has provided this information as a means to evaluate the results of its ongoing operations. Other companies in the Company's industry may calculate these items differently than it does. Each of these measures is not a measure of performance under GAAP and should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP.

About the Company - Based in Las Vegas, Nevada, Tatyana Designs, Inc. is a retailer specializing in contemporary designs inspired by the 1940's and 50's – the "Golden Age" of fashion. The Company owns significant trademark and license rights. The merchandise offered through the chain of retail boutiques, e-commerce and wholesale divisions offer retro elegance for the modern woman through a diverse mix of high-quality and attractively priced apparel, jewelry, accessories and gifts. The Company's boutiques and e-commerce target the 18-35 year-old, fashion conscious female customer, but women of all ages are attracted to the unique retro inspired, yet modern, look. New product styles are presented monthly. For more information on the company please visit the Web site at www.tatyanadesigns.com.

Cautionary note on forward-looking statements:

Certain statements in this release are "forward-looking statements" made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company's current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected, including: the costs and effects of our rebranding and related disputes including current litigation; possible adverse changes in general economic conditions and their impact on consumer confidence and spending; possible inability to predict and respond in a timely manner to changes in consumer demand; possible loss of key management or inability to attract and retain the talent required for our business; possible inability to maintain and enhance our brands; our ability to borrow capital or service our indebtedness; our ability to reduce operating costs or close unprofitable business units; possible inability to successfully implement our strategies or manage our business; possible inability to successfully operate our boutiques and expand e-commerce business as planned; the inability to successfully implement certain strategic initiatives; the ability to raise additional capital if required; and possible inability to sustain sales volumes. For a discussion of these and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to the Company's most recent public corporate documents and risk factors discussed therein (www.otcmarkets.com/stock/TATD/filings). We undertake no obligation to publicly update or revise any forward-looking statement. Future results may differ materially from the Company's current expectations.

Tatyana Designs, Inc.
Condensed Consolidated Balance Sheets
(000's omitted except per share amount)
(unaudited)
  June 30, December 31,
  2014 2013
  $ $
ASSETS    
Current    
Cash  513  683
Inventories  2,972  2,576
Receivables and other  729  338
Total current assets  4,214  3,597
Property and equipment, net  789  698
Deferred income taxes  --   409
Deposits  717  443
Total assets  5,720  5,147
     
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current    
Accounts payable and accruals  833  1,061
Bank debt  583  202
Due stockholder  336  376
Total current liabilities  1,752  1,639
Deferred rent  1,172  1,080
Bank debt - long term  360  472
10% Secured convertible note-net  840  -- 
6% Convertible notes  300  300
Total liabilities  4,424  3,491
Stockholders' equity  1,296  1,656
Total liabilities and stockholders' equity  5,720  5,147
 
Tatyana Designs, Inc.
Condensed Consolidated Statements of Operations
(000's omitted except per share amount)
(unaudited)
         
  Three Months Ended Six Months Ended
  June 30, June 30,
  2014 2013 2014 2013
  $ $ $ $
Net sales  3,401  3,758  6,381  6,889
Cost of revenues  935  1,345  1,861  2,360
Gross profit  2,466  2,413  4,520  4,529
Selling, general and administrative  3,012  2,271  5,508  4,257
Income (loss) from operations  (546)  142  (988)  272
Other expenses  234  35  246  45
Income before income tax  (780)  107  (1,234)  227
Income tax expense (benefit)  552  43  389  92
Net income (loss)  (1,332)  64  (1,623)  135
         
Basic and diluted earnings per        
common share ($0.11) $0.01 ($0.13) $0.01
         
Weighted average shares outstanding:        
Basic and diluted shares  12,185  11,935  12,185  11,935
         
Tatyana Designs, Inc.
GAAP to Non-GAAP Reconciliations
(000's omitted)
(unaudited)
         
  Three Months Ended Six Months Ended
  June 30, June 30,
  2014 2013 2014 2013
  $ $ $ $
Reconciliation of net income (loss) to EBITDA:        
Net income (loss)  (1,332)  64  (1,623)  135
Adjustments:        
Interest  177  37  194  57
Depreciation  54  41  102  70
Taxes  552  43  389  92
EBITDA  (549)  185  (938)  354
         
Reconciliation of net income (loss) to Adjusted EBITDA:        
Net income (loss)  (1,332)  64  (1,623)  135
Adjustments:        
Interest  177  37  194  57
Depreciation  54  41  102  70
Taxes  552  43  389  92
Stock-based compensation  57  28  71  50
Non-cash increase deferred rent  67  81  92  237
Adjusted EBITDA  (425)  294  (775)  641
FOR FURTHER INFORMATION CONTACT:
Jan Glaser
702.458.1632 Ext 5