BODY Full DD & Analysis First off this stock is down huge from over 30$ a share to 8$ a share and that got my attention... all this done in a very short time period 6 weeks going from 30$ down to 8$ a share as seen in the chart below
The chart is Extremly Oversold by virtually any techincal metric that you can use... RSI 21 Stocastics in the basement virtually any techincal indicator you pull up on this one shows extremly oversold conditions all done on record volume actually the volume more then fliped the entire float I find amazing since Institutions and insiders own over 103% of the float and over 10% of the float is sold short so from the techincals I like this setup now lets move on to the fundamentals of the company
Lets tear this company apart from top to bottom.
Going to be using the latest 10q SEC Filing For the quarterly period ended March 31, 2012 Going to be using this information as well as the latest press releases from the company as well as CC information and other sources of information as well we want to know everything that is publically avaible to know about this company we want to know it.
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8607061-874-91393&type=sect&dcn=0001104659-12-035963 Link to pull the SEC 10Q Filing up
6225 Powers Avenue
Jacksonville, FL 32217
(Address, including zip code, of principal executive offices)
Registrant’s telephone number, including area code: (904) 737-0811 Phone number sure ill be calling the company later to talk with the CEO and CFO always like calling and talking to them asking questions offering advice and suggestions since after all we as shareholders own the company and they do work for us
The number of shares outstanding of the registrant’s common stock as of May 2, 2012 was 16,172,393 shares. Pretty Small Float here only 16.1 Million Shares total
First Risk in the business in anything there is risk lets look them over
our ability to identify and respond to new and changing fashion trends, customer preferences and other related factors;
· failure to execute successfully our growth strategy; Company is still growing going to open 35 stores this year
· changes in consumer spending and general economic conditions; This has not changed as per latest CC
· changes in the competitive environment in our industry and the markets we serve, including increased competition from other retailers;
· failure of our new stores or existing stores to achieve sales and operating levels consistent with our expectations;
· our dependence on a strong brand image;
· failure of our information technology systems to support our business;
· our dependence upon key executive management or our inability to hire or retain additional personnel;
· disruptions in our supply chain and distribution facility;
· our reliance upon independent third-party transportation providers for all of our product shipments;
· hurricanes, natural disasters, unusually adverse weather conditions, boycotts and unanticipated events;
· the seasonality of our business;
· increases in costs of fuel, or other energy, transportation or utilities costs as well as in the costs of raw materials, labor and employment; These cost should actually be going down some due to lower gas prices that should also help there customers as well
· the impact of governmental laws and regulations and the outcomes of legal proceedings;
· restrictions imposed by our lease obligations on our current and future operations; and
· our inability to protect our trademarks or other intellectual property rights.
All in all the risk here are just general risk in business
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
BODY CENTRAL CORP.
CONSOLIDATED BALANCE SHEETS (UNAUDITED) Ok lets take a look at the balance sheet
March 31,
December 31,
April 2,
2012
2011
2011
(In thousands, except share data)
Assets
Current assets
Cash and cash equivalents
$
24,608 24 Million in Cash The cash is down but its because they used 19.8 Million to buy Short term investments
$
41,993
$
25,108
Short-term investments
19,871 This is where the cash went to short term investments The company is trying to earn a little better yield on there cash since yields suck right now anyways
—
—
Accounts receivable
1,098 Low AR so that means the company is paid in Cash for there purchases thats a very good thing
2,607
851
Inventories
22,530 Inventories up but its because they are growing but over all investories are staying in line looks like they move there inventory pretty quick
21,141
19,543
Prepaid expenses and other current assets
4,885 up a little in line its where they are adding new stores
4,293
4,418
Deferred tax asset
1,659
1,953
1,722
Total current assets
74,651 74 Million in current assets
71,987
51,642
Property and equipment, net of accumulated depreciation and amortization of $21,089, $19,892 and $16,630
23,229 23 Million in property plant and equipment this is on the rise
22,159
17,545
Goodwill
21,508 Usually subtract this number out but this company has name brand ect so it may have some value not so sure i would value it at what they have on the balance sheet but still yet some value
21,508
21,508
Intangible assets, net of accumulated amortization of $3,810, $3,663 and $3,166
16,395 not sure what all this consist of but 16 Million in intangable assets
16,542
16,982
Other assets
101
106
102
Total assets
$
135,884 135 Million in total assets
$
132,302
$
107,779
Liabilities and Stockholders’ Equity
Current liabilities
Merchandise accounts payable
$
16,741 Staying pretty consistant
$
16,498
$
17,068
Accrued expenses and other current liabilities
15,665
18,608
13,614
Total current liabilities
32,406 Low current liablties esp given the assets
35,106
30,682
Other liabilities
7,482
7,899
6,823
Deferred tax liability
3,966
4,225
4,562
Total liabilities
43,854 43 Million in total liablities vs 135 Million in assets no risk of bankruptcy or anything here no long term debt either very nice balance sheet actually the company did have some long term debt in the past but through strong earnings and cash flows the company was able to pay down ALL That debt and raise its cash grow revenues and earnings and cash flows very nice great job management
47,230
42,067
Commitments and contingencies
Stockholders’ equity
Common stock, $0.001 par value, 45,000,000 shares authorized, 16,154,243 shares issued and outstanding as of March 31, 2012, 16,095,377 shares issued and outstanding as of December 31, 2011 and 15,655,957 shares issued and outstanding as of April 2, 2011
16
16
16
Additional paid-in capital
93,724
92,705
87,650
Accumulated deficit
(1,710
)
(7,649
)
(21,954
)
Total stockholders’ equity
92,030 92 Million in Stock holders equity vs Market Cap: 138.59M 46 Million Dollar difference here we will have to move onto the cash flows statement and income statement to determine if the current market cap is warranted or not
85,072
65,712
Total liabilities and stockholders’ equity
$
135,884
$
132,302
$
107,779
Overall very nice balance sheet no long term debt company growing cash i like it
Lets move on now to the Income Statement
BODY CENTRAL CORP.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Thirteen Weeks Ended Keep in mind this data is for 13 weeks,,,
March 31, Pretty short time period here lets take a look
April 2,
2012
2011
(in thousands, except share
and per share data)
Net revenues
$
82,681 82 Million in revenues for 13 weeks Wow and thats up 9 Million from last year Wow talk about growth very nice
$
73,984
Cost of goods sold, including occupancy, buying, distribution center and catalog costs
53,419 Cost of good not going up no wheres near what revenues is
47,251
Gross profit
29,262 Gross profits increased by 3 Million Dollars for 13 Weeks Wow
26,733
Selling, general and administrative expenses
18,250 This cost went up 2 MIllion but the GP increased by 3 Million
16,701
Depreciation and amortization
1,477 up just a tad non cash cost
1,203
Income from operations
9,535 9.5 Million in income for 13 Week dang they are making nearly a million dollars a week in income from opperation Wow Talk about a cash machine
8,829
Interest income, net of interest expense
(8 8,000 in intrest its because intrest rates are super low right now thanks to ben bernake
)
(5
)
Other income, net of other expense
(42
)
(44
)
Income before income taxes
9,585
8,878
Provision for income taxes
3,646
3,463
Net income
$
5,939 5.9 Million in Net Income for 13 Weeks Wow 23.6 Million a year but thats not even factoring in any growth the market cap is what 135 Million The balance sheet is worth around 92 Million so it nearly pays for its self here within 2 years and thats assuming no growth at all
$
5,415
Net income per common share:
Basic
$
0.37 .37 EPS 1.48$ Annual now the stock got slammed because they lowered there earnings guidance to a 1.12$ a share But lets assume the lower guideance 8.50$/1.12$=PE 7.5 If we back out the balance sheet we have a PE around 2 Wow
$
0.35
Diluted
$
0.36
$
0.34
Weighted-average common shares outstanding:
Basic
16,123,255 share count staying around the same slight increase
15,550,193
Diluted
16,365,933
16,070,603
Other comprehensive income, net of tax
—
—
Comprehensive income
$
5,939
$
5,415
The accompanying notes are an integral part of these unaudited consolidated financial statements.
6
Table of Contents
BODY CENTRAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Thirteen Weeks Ended
March 31,
April 2,
2012
2011
(in thousands)
Cash flows from operating activities
Net income
$
5,939
$
5,415
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
1,477
1,203
Deferred income taxes
36
45
Tax benefits from stock-based compensation
(390
)
(834
)
Stock based compensation
392
240
Loss on disposal of property and equipment
18
—
Changes in assets and liabilities:
Accounts receivable
1,509
407
Inventories
(1,388
)
(1,174
)
Prepaid expenses and other current assets
(592
)
(485
)
Other assets
5
—
Merchandise accounts payable
243
2,188
Accrued expenses and other current liabilities
(3,262
)
(1,383
)
Income taxes
709
1,226
Other liabilities
(409
)
1,681
Net cash provided by operating activities
4,287 4.2 Million in Cash flows This is down have to look to see why cut in half actually thats not good
8,529
Cash flows from investing activities
Purchases of property and equipment
(2,429
)
(1,538
)
Purchases of short-term investments
(19,871 They just took there cash and bought short term investments no biggie like going out and buying a US treasury bond but since its short term its all good
)
—
Net cash used in investing activities
(22,300 This is due to new stores and new techonology actually i think that the techonolgy expense is a 1 time deal that should help earnings going forward dont have the expense again and better inventory and managent of staff and time at the stores
)
(1,538
)
Cash flows from financing activities
Proceeds from common stock offering, net of issuance costs
—
1,074
Proceeds from exercise of stock options
238
7
Tax benefits from stock-based compensation
390
834
Net cash provided by (used in) financing activities
628
1,915
Net increase (decrease) in cash and cash equivalents
(17,385
)
8,906
Cash and cash equivalents
Beginning of year
41,993
16,202
End of period
$
24,608 This is miss leading yes cash went down BUT its being off set by the nearly 20 Million in short term investments add that back in Cash is at 44 MIllion and actually went up Company is cash flow positive
$
25,108
The cash flows statement the company is cash flow positive and is investing in opening new profitable stores that are generating revenues and earnings and cash flows very good job management!
Nature of Business and Organization
Body Central Corp. (the ‘‘Company’’) is a specialty retailer of young women’s apparel and accessories operating retail stores in the South, Mid-Atlantic and Midwest regions of the United States. The Company operates specialty apparel stores under the Body Central and Body Shop banners as well as a direct business comprised of our Body Central catalog and our e-commerce website at www.bodyc.com.
There a Women Retailer
Quoted
Significant
Prices in
Other
Significant
Active
Observable
Unobservable
March 31,
Markets
Inputs
Inputs
Description
2012
(Level 1)
(Level 2)
(Level 3)
(in thousands)
Municipal Bonds
$
10,259
$
—
$
10,259
$
—
Short-term, high-quality, fixed-income securities
7,655
—
7,655
—
Certificates of Deposit
1,957
1,957
—
—
Total
$
19,871
$
1,957
$
17,914
$
—
Pretty safe investments
Income Taxes
The provision for income taxes is based on the current estimate of the annual effective tax rate and is adjusted as necessary for discrete events occurring in a particular period. The effective income tax rate was 38.0% and 39.0% for the thirteen weeks ended March 31, 2012 and April 2, 2011, respectively. The decrease in the effective tax rate for the thirteen-week period ended March 31, 2012 was primarily due to discrete items.
The Company recognizes income tax liabilities related to unrecognized tax benefits in accordance with FASB ASC 740, Income Taxes , guidance related to uncertain tax positions, and adjusts these liabilities when its judgment changes as the result of the evaluation of new information. The Company does not anticipate any significant changes to the unrecognized tax benefits recorded at the balance sheet date within the next twelve months.
Goverment taxing them hard that sucks but gotta pay taxes part of life
Related Parties
The Company leases office and warehouse space under a lease agreement dated October 1, 2006 with a company that is owned by certain members of management who are also stockholders of the Company. The lease expires on October 1, 2016. The Company incurred rent expense of $119,000 and $117,000 for the thirteen weeks ended March 31, 2012 and April 2, 2011, respectively, related to this lease.
5. Leases
The Company’s retail stores and corporate offices are in leased facilities. Lease terms for retail stores generally range up to ten years and provide for escalations in base rents. The Company does not have obligations to renew the leases. Certain leases provide for contingent rentals based upon sales. Most leases also require additional payments covering real estate taxes, common area costs and insurance.
Future minimum rental commitments, by year and in the aggregate, under non-cancelable operating leases as of March 31, 2012, are as follows:
Fiscal Year
(in thousands)
2012 Remaining
$
15,504
2013
18,969 goes up here a tad but down after this
2014
17,608 Lease payments actually start to drop after 2014 so thats nice
2015
15,989
2016
13,443
Thereafter
17,798
Total
$
99,311
Debt
On January 20, 2012, we entered into a Line of Credit Agreement with Branch Banking and Trust Company that provides for a revolving line of credit facility in the amount of $5.0 million with an accordion feature that allows Branch Banking and Trust Company to increase the facility up to $20 million at its sole discretion. The facility has maturity date of May 5, 2013 and bears interest at the one month LIBOR rate plus 1.35% per annum, as adjusted monthly on the first
Even have a 20 Million credit line that is untapped the company said on the CC they dont intend to borrow any money that there cash and cash flows is all they need
Thirteen Weeks Ended
March 31,
April 2,
2012
2011
(in thousands, except share
and per share data)
Net income as reported
$
5,939
$
5,415
Net income attributable to common shareholders
$
5,939
$
5,415
Weighted average basic common shares
16,123,255
15,550,193
Impact of dilutive securities:
Stock options
228,340
520,410
Restricted Stock
14,388
—
Weighted average dilutive common shares
16,365,933
16,070,603
Per common share:
Net income per common share - basic
$
0.37
$
0.35
Net income per common share - dilutive
$
0.36
$
0.34
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity, and cash flows of our Company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, filed with the SEC, and our unaudited consolidated financial statements and the related notes included herein. This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors. See “Forward-Looking Statements.”
Overview
Founded in 1972, Body Central Corp. is a multi-channel specialty retailer offering on-trend, quality apparel and accessories at value prices. We operate specialty apparel stores under the Body Central and Body Shop banners, as well as a direct business comprised of our Body Central catalog and our e-commerce website at www.bodyc.com . We target women in their late teens and twenties from diverse cultural backgrounds, who seek the latest fashions and a flattering fit. Our stores feature an assortment of tops, dresses, bottoms, jewelry, accessories and shoes sold primarily under our exclusive Body Central® and Lipstick® labels. We continually update our merchandise and floor sets with an emphasis on coordinated outfits presented by lifestyle to give our customers a reason to shop
16
Table of Contents
our stores frequently. We believe our multi-channel strategy supports our brand building efforts and provides us with synergistic growth opportunities across all of our sales channels.
As of March 31, 2012, we had 243 stores with an average size of approximately 4,300 square feet. Our stores are located in fashion retail venues in the South, Mid-Atlantic and Midwest. In the thirteen weeks ended March 31, 2012, we opened four stores and closed two.
How We Assess the Performance of Our Business
In assessing the performance of our business, we consider a variety of operational and financial measures. The key measures for determining how our business is performing are net revenues, comparable store and non-comparable store sales, direct sales through our catalog and e-commerce channels, gross profit margin, store contribution, selling, general and administrative expenses, earnings before interest taxes depreciation and amortization, and net income.
Net Revenues
Net revenues consist of sales of our merchandise from comparable stores and non-comparable stores and direct sales through our catalog and e-commerce channels, including shipping and handling fees charged to our customers. Net revenues from our stores and direct business reflect sales of our merchandise less estimated returns and merchandise discounts.
Store Sales
There may be variation in the way in which other retailers calculate “comparable” or “same store” sales. We include a store in comparable store sales on the first day of the fourteenth month after a store opens. Non-comparable store sales include sales not included in comparable store sales (for example, the first two months of a new store’s sales) and sales from closed stores. Measuring the change in year-over-year comparable store sales allows us to evaluate how our store base is performing. Various factors affect comparable store sales, including:
· consumer preferences, buying trends and overall economic trends;
· our ability to identify and respond effectively to fashion trends and customer preferences;
· changes in competition;
· changes in our merchandise mix;
· changes in pricing levels and average unit price;
· the timing of our releases of new merchandise;
· the level of customer service that we provide in our stores;
· our ability to source and distribute products efficiently; and
· the number of stores we open and close in any period.
Opening new stores is an important part of our growth strategy. We expect a significant percentage of our net revenues to come from non-comparable store sales. Accordingly, comparable store sales is only one element we use to assess the success of our growth strategy. Purchases of apparel and accessories are sensitive to a number of factors that influence the levels of consumer spending,
Gross Profit
Gross profit is equal to our net revenues minus our cost of goods sold. Gross profit margin measures gross profit as a percentage of our net revenues. Cost of goods sold includes the direct cost of purchased merchandise, distribution costs, all freight costs incurred to ship merchandise to our stores and our direct customers, costs incurred to produce and distribute our catalogs, store occupancy costs, buying costs and inventory shrinkage. The components of our cost of goods sold may not be comparable to those of other retailers.
Our cost of goods sold is greater in higher volume periods because cost of goods sold generally increases as net revenues increase. Changes in the mix of our products, such as changes in the proportion of accessories, may also impact our cost of goods sold. We review our inventory levels on an ongoing basis in order to identify slow-moving merchandise and take appropriate markdowns to clear these goods. The timing and level of markdowns are not seasonal in nature, but are driven by customer acceptance of our merchandise. If we misjudge sales levels and/or trends, we may be faced with excess inventories and be required to mark down our prices for those products in order to sell them. The Company records a markdown reserve based on estimated future markdowns related to current inventory to clear slow-moving inventory.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include all operating costs not included in cost of goods sold. These expenses include payroll and other expenses related to operations at our corporate headquarters and store operations. These expenses generally do not vary proportionally with net revenues. As a result, selling, general and administrative expenses as a percentage of net revenues are usually higher in lower volume periods and usually lower in higher volume periods. The components of our selling, general and administrative expenses may not be comparable to those of other retailers. We expect that our selling, general and administrative expenses will increase in future periods due to our continuing store growth and continuing growth in our direct business.
Thirteen Weeks Ended
March 31,
April 2,
2012
2011
Stores at beginning of period
241
209
Stores opened during period
4
5
Stores closed during period
(2
)
—
Stores at end of period
243 Store count is growing company is going to add 35 new stores this year
214
Net Revenues
Net revenues increased by $8.7 million, or 11.8%, for the thirteen weeks ended March 31, 2012, as compared to the thirteen weeks ended April 2, 2011.
Store sales increased $7.6 million, or 12.0%, for the thirteen weeks ended March 31, 2012, as compared to the thirteen weeks ended April 2, 2011. The increase in store sales resulted from the 29 net store additions since April 2, 2011, partially offset by a slight decrease in comparable store sales. Comparable store sales decreased $857,000, or 1.4%, for the thirteen weeks ended March 31, 2012, compared to an increase of 16.1% for the thirteen weeks ended April 2, 2011. Non-comparable store sales increased $8.5 million for the thirteen weeks ended March 31, 2012, compared to the thirteen weeks ended April 2, 2011. There were 206 comparable stores and 37 non-comparable stores open during the thirteen weeks ended March 31, 2012.
Direct sales, including shipping and handling fees, from our direct business increased $1.1 million, or 10.1%, for the thirteen weeks ended March 31, 2012, as compared to the thirteen weeks ended April 2, 2011. This increase was due to higher average revenue per catalog.
Gross Profit
Gross profit increased $2.5 million, or 9.5%, for the thirteen weeks ended March 31, 2012 as compared to the thirteen weeks ended April 2, 2011. As a percentage of net revenues, gross profit margin decreased by 70 basis points for the thirteen weeks ended March 31, 2012 as compared to the thirteen weeks ended April 2, 2011. This decrease was attributable to a 60 basis point decrease in merchandise margin from markdowns taken to clear slow-moving inventory and a 10 basis point increase in freight costs, store occupancy, distribution and buying costs as a percentage of net revenues.
Selling, General and Administrative Expense
Selling, general and administrative expenses increased by $1.5 million, or 9.3%, for the thirteen weeks ended March 31, 2012 as compared to the thirteen weeks ended April 2, 2011. This increase resulted in part from a $1.2 million increase in store operating expenses due primarily to the 29 net store additions since April 2, 2011. As a percentage of net revenues, store operating expenses decreased to 15.6% for the thirteen weeks ended March 31, 2012 as compared to 15.8% for the thirteen weeks ended April 2, 2011, primarily due to the leveraging of store payroll as a percentage of net revenues.
General and administrative expenses increased $372,000 for the thirteen weeks ended March 31, 2012 as compared to the thirteen weeks ended April 2, 2011 due primarily to compensation related expenses for corporate positions. As a percentage of net revenues, general and administrative expenses decreased to 6.5% for the thirteen weeks ended March 31, 2012 from 6.8% for the thirteen weeks ended April 2, 2011. The decrease as a percent of net revenues was primarily due to reduction in information technology expenses offset by an increase in compensation related expenses.
As a percentage of net revenues, selling, general and administrative expenses were 22.1% for the thirteen weeks ended March 31, 2012 and 22.6% for the thirteen weeks ended April 2, 2011 due to reasons discussed above.
Depreciation and Amortization Expense
Depreciation and amortization expense increased $274,000, or 22.8%, for the thirteen weeks ended March 31, 2012 as compared to the thirteen weeks ended April 2, 2011. This increase was primarily due to capital expenditures from new store construction and upgrades to our information technology systems. As a percentage of net revenues, depreciation and amortization expense increased 20 basis points for the thirteen weeks ended March 31, 2012 as compared to the thirteen weeks ended April 2, 2011.
Interest Income, Net of Interest Expense
Interest income, net of interest expense, was $8,000 for the thirteen weeks ended March 31, 2012 and $5,000 for the thirteen weeks ended April 2, 2011.
Provision for Income Taxes
Provision for income taxes increased $183,000 for the thirteen weeks ended March 31, 2012 as compared to the thirteen weeks ended April 2, 2011, which was attributable to a $707,000 increase in income before income taxes, which was partially offset by a reduction in the effective tax rate of 100 basis points to 38.0% in the thirteen weeks ended March 31, 2012 from 39.0% in the thirteen weeks ended April 2, 2011. The decrease in the effective tax rate for the thirteen-week period ended March 31, 2012 was primarily due to discrete items.
Net Income
Net income increased $524,000 for the thirteen weeks ended March 31, 2012 as compared to the thirteen weeks ended April 2, 2011 due to the factors discussed above.
Nice increase in net income I like
Liquidity and Capital Resources
Our primary source of liquidity is currently cash flows from operations. Our primary cash need is for capital expenditures in connection with opening new stores, remodeling or relocating existing stores, distributing our catalogs, operating our website and the additional working capital required for running our operations. Cash is also required for investment in our information technology systems, maintenance of existing facilities and distribution facility enhancements, when required. The most significant components of our working capital are cash and cash equivalents, merchandise inventories, trade payables and other current liabilities. Our working capital position benefits from the fact that we generally collect cash from sales to customers the same day or, in the case of credit or debit card transactions, within several days of the related sale, and we typically have up to 30 days to pay our merchandise vendors, depending on the applicable vendor terms.
We also have availability under a line of credit facility. On January 20, 2012, we entered into a Line of Credit Agreement with Branch Banking and Trust Company that provides for a revolving line of credit facility in the amount of $5.0 million with an accordion feature that allows Branch Banking and Trust Company to increase the facility up to $20 million. The facility has a maturity date of May 5, 2013 and bears interest at the one month LIBOR rate plus 1.35% per annum, as adjusted monthly on the first day of each month, with an all-in floor rate of 2.0%. The facility is secured by all the assets of the company. The Line of Credit Agreement includes a financial covenant requiring the Company to have a Tangible Net Worth (as defined in the Line of Credit Agreement) of $30.0 million quarterly, and other customary covenants. As of March 31, 2012, the Company was in compliance with all covenants and had no outstanding borrowings under this line of credit facility.
Our ability to fund our cash flow needs depends largely on our future operating performance. We assess future operating performance by looking at a number of metrics, primarily our net revenues, comparable store and non-comparable store sales, direct sales through our catalog and e-commerce channels, gross profit margin, and selling, general and administrative expenses. Our liquidity position is directly affected by these performance metrics.
Our cash and cash equivalents balance decreased $500,000 to $24.6 million as of March 31, 2012, from $25.1 million as of April 2, 2011. Components of this change in cash for the thirteen weeks ended March 31, 2012, as well as the change for the thirteen weeks ended April 2, 2011, are shown in the following table:
Thirteen Weeks Ended
March 31,
April 2,
2012
2011
(in thousands)
(unaudited)
Provided by operating activities
$
4,287
$
8,529
Used in investing activities
(22,300
)
(1,538
)
Provided by financing activities
628
1,915
Increase (decrease) in cash and cash equivalents
$
(17,385
)
$
8,906
Operating Activities
Operating activities consist of net income adjusted for non-cash items, including depreciation and amortization and the effect of other working capital requirements, as summarized in following table:
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Table of Contents
Thirteen Weeks Ended
March 31,
April 2,
2012
2011
(in thousands)
(unaudited)
Net income
$
5,939
$
5,415
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
1,477
1,203
Deferred income taxes
36
45
Inventories
(1,388
)
(1,174
)
Merchandise accounts payable
243
2,188
Other working capital components, net
(2,020
)
852
Net cash provided by operating activities
$
4,287
$
8,529
Net cash provided by operating activities decreased by $4.2 million to $4.3 million during the thirteen weeks ended March 31, 2012 as compared to $8.5 million for the thirteen weeks ended April 2, 2011. This reduction was primarily attributable to a $2.9 million unfavorable change in other working capital components, and a $2.2 million unfavorable change in our requirements for inventory, net of merchandise accounts payable, partially offset by a $524,000 favorable change in net income and a $274,000 favorable change in depreciation and amortization.
Basically no need to borrow any money
Outlook
Our short-term and long-term liquidity needs arise primarily from capital expenditures associated with our growth strategy and working capital requirements. We believe that our cash position and net cash provided by operating activities, short-term investments and availability under the Line of Credit Facility will be adequate to finance our working capital needs and planned capital expenditures for at least the next 12 months. Planned capital expenditures for fiscal year 2012 include expenditures for at least 35 new stores, relocation of and maintenance of existing stores, maintenance of corporate facilities, and investments in information technology systems, which includes investing in and upgrading several of our systems to provide improved support of our current operations and position us for future growth.
By:
/s/ B. Allen Weinstein
B. Allen Weinstein
President, Chief Executive Officer and Director
(Principal Executive Officer)
By:
/s/ Thomas W. Stoltz
Thomas W. Stoltz
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Over all after reading the entire 10q filing The company here looks fairly valued I like the earnings the cash flows the balance sheet the growth the management team the chart the low PE I give this stock is a Strong Buy and welcome any further dips in the stock price to accumulate cheap shares
Now lets take a look at the latest press releases the reasons behind the sell off
http://finance.yahoo.com/news/body-central-corp-revises-guidance-120000366.html Link for the massive drop
JACKSONVILLE, Fla., June 18, 2012 (GLOBE NEWSWIRE) -- Body Central Corp. (BODY) today revised sales and earnings guidance for its second quarter and full year 2012.
Allen Weinstein, Body Central's President and CEO, stated: "Our second quarter comparable sales remain soft and have not improved since April. We continue to diligently manage inventory and to take aggressive markdowns on slow moving items. As a result, we now expect second quarter sales and gross margin to be lower than contemplated in our May 3rd release. We now believe the recent sales trends will continue into the third quarter with some impact to gross margin. We expect sales to improve in the fourth quarter as we receive new Fall and holiday assortments. Based on these trends and expectations, we have lowered our second half sales plan and revised guidance down accordingly. We continue to believe that we have a compelling business model and are actively working to address near-term sales challenges and get our business back on track."
Outlook
For the second quarter of fiscal 2012, the Company expects net revenues in the range of $77 million to $79 million, comparable sales to decrease in a range of 7 to 9 percent and diluted earnings per share in the range of $0.19 to $0.21, based on diluted weighted-average shares outstanding of 16.4 million.
For the full fiscal year, the Company now expects net revenues in the range of $323 million to $328 million, comparable sales to decrease in a range of 4 to 6 percent and diluted earnings per share in the range of $1.07 to $1.11, based on diluted weighted-average shares outstanding of 16.4 million.
Jefferies 2012 Global Consumer Conference
The Company will also participate tomorrow, June 19, 2012, in the Jefferies 2012 Global Consumer Conference in Nantucket, MA. The Company will make a brief presentation followed by a question and answer session beginning at 3:00 p.m. Eastern Time. To listen to the webcast, please visit Body Central's Investor Relations Web site at
http://investor.bodyc.com/ under "Events & Presentations". A replay of the webcast and a copy of the presentation will be available for 90 days.
About Body Central
Founded in 1972, Body Central Corp. is a growing, multi-channel, specialty retailer offering on-trend, quality apparel and accessories at value prices. As of June 15, 2012 the Company operated 254 specialty apparel stores in 23 states under the Body Central and Body Shop banners, as well as a direct business comprised of a Body Central catalog and an e-commerce website at www.bodyc.com. The Company targets women in their late teens and twenties from diverse cultural backgrounds who seek the latest fashions and a flattering fit. Stores feature an assortment of tops, dresses, bottoms, jewelry, accessories and shoes sold primarily under the Company's exclusive Body Central(R) and Lipstick(R) labels.
Sounds like to me a temporary problem they had some inventory that was not selling as good as they wanted caused the company to lower its guidance management is looking to change the inventorys up and continue to grow the company this looks like more of a short term setback for the company making the stock a Very Strong Buy at these prices they can and will turn this company back to the growth this is nothing more then a minor set back the market is clearly WAY Over reacting here to this news
Outlook
For the second quarter of fiscal 2012, the Company expects net revenues in the range of $77 million to $79 million, comparable sales to decrease in a range of 7 to 9 percent and diluted earnings per share in the range of $0.19 to $0.21, based on diluted weighted-average shares outstanding of 16.4 million.
For the full fiscal year, the Company now expects net revenues in the range of $323 million to $328 million, comparable sales to decrease in a range of 4 to 6 percent and diluted earnings per share in the range of $1.07 to $1.11, based on diluted weighted-average shares outstanding of 16.4 million.
The outlook hell to me thats still VERY GOOD Guidance there still profitable and on the CC they said 20% growth going forward this is like i said a short term set back for this company
Stock should rebound and recover Strong hands should be accumulating shares on any dips should be nearing a bottom here on BODY
That concludes my DD on BODY Give the stock a Strong Buy Rating will give the company a call to talk to the CEO CFO this week or next week in the mean time will accumulate shares on any dips done long the stock but do intend to add more after doing this DD
