LOS ANGELES, Oct. 13, 2009 (GLOBE NEWSWIRE) -- Vertical Branding, Inc. (Pink Sheets:VBDG) provided a general corporate update today as well as an update to its May 11, 2009, announcement of an exclusive licensing agreement with P2F Holdings and related restructuring of company operations. The company's restructuring efforts have failed to achieve expectations or intended results and the company lacks sufficient cash flow to maintain normal operations and meet its current financial obligations. The company's Board is presently reviewing the company's options for reorganization, recapitalization or other methods of deriving value from the company's assets to satisfy the company's liabilities. Because of its working capital shortage, the company has substantially reduced operating expenses by laying off all but three employees and by suspending various operations.
Vertical Branding's update also included announcement of the resignation of Nancy Duitch as the Company's Chief Executive Officer. Ms. Duitch remains a member of the Board.
The company's update further included summary unaudited financial results for the period ended June 30, 2009.
Information Regarding Forward-Looking Statements
The information in this news release includes forecasts and predictions about future results and events, or "forward-looking statements," often identifiable by use of words like "anticipate", "believe", "estimate", "expect", "future", "intend", "plan" and similar expressions. Such statements reflect the current view of Vertical Branding with respect to the matters discussed and are subject to and qualified by various risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from those forecasted or predicted.
VERTICAL BRANDING, INC. AND SUBSIDIARIES
CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
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Revenues
Consumer products $ 1,290 $ 9,404 $ 5,301 $ 17,525
Real estate activities 178 179 334 326
-------- -------- -------- --------
Total revenues 1,468 9,583 5,635 17,851
Cost of sales 1,304 5,030 3,962 8,440
-------- -------- -------- --------
Gross profit 164 4,553 1,673 9,411
-------- -------- -------- --------
Operating expenses
Selling 308 2,699 1,333 6,624
General and administrative 1,018 1,699 2,425 3,709
Depreciation and
amortization 173 315 545 634
-------- -------- -------- --------
Total operating expenses 1,499 4,713 4,303 10,967
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Loss from operations (1,335) (160) (2,630) (1,556)
Other income (expense):
Loss on sale of business (1,673) -- (1,673) --
Interest expense, net (244) (245) (506) (469)
-------- -------- -------- --------
Loss from operations before
provision for income taxes
and noncontrolling interest (3,252) (405) (4,809) (2,025)
Provision for income taxes 3 4 4 9
-------- -------- -------- --------
Loss before noncontrolling
interest (3,255) (409) (4,813) (2,034)
Net loss attributable to
noncontrolling interest (21) (37) (62) (90)
-------- -------- -------- --------
Net loss (3,234) (372) (4,751) (1,944)
Preferred stock dividends 44 46 88 91
-------- -------- -------- --------
Net loss applicable to common
stockholders $ (3,278) $ (418) $ (4,839) $ (2,035)
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Basic and diluted loss per
common share $ (0.11) $ (0.01) $ (0.16) $ (0.07)
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Weighted average shares used
in computation of basic and
diluted loss per common
share 30,093 29,378 30,102 30,112
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VERTICAL BRANDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS
(In thousands)
June 30, Dec. 31,
2009 2008
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 95 $ 221
Accounts receivable, net 743 4,141
Inventories 307 1,497
Other current assets 250 574
-------- --------
Total current assets 1,395 6,433
Office building, net 2,724 2,800
Intangible assets, net -- 1,519
Goodwill 1,231 1,842
Other assets 387 738
-------- --------
Total assets $ 5,737 $ 13,332
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Liabilities and Shareholders' Deficiency
Current liabilities:
Line of credit $ 194 $ 3,981
Current portion of long-term debt 3,160 3,886
Accounts payable and accrued expenses 3,211 3,956
Deferred income 1,234 --
-------- --------
Total current liabilities 7,799 11,823
Long-term debt 2,764 1,700
-------- --------
Total liabilities 10,563 13,523
Shareholders' deficiency (4,826) (191)
-------- --------
Total liabilities and shareholders'
deficiency $ 5,737 $ 13,332
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