American Apparel Inc. disclosed second quarter financial results for the period ended June 30 after market close on Monday. Net sales remained flat at $162.4 million compared with $162.2 million for the second quarter 2013 period on a 6% decrease in comparable store sales. The retailer had last week disclosed preliminary estimated results for the second quarter, as part of a notification of late filing for its 10-Q.
The company stated that strength in the U.S. wholesale business - which accounted for about 36% of second quarter sales - offset the negative comps. U.S. wholesale sales increased 12% year-over-year to $58.3 million. Adjusted EBITDA totaled $14.6 million, up 85% from $7.9 million for the same quarter last year. According to the second quarter earnings release, the gain in EBITDA is due to improved operating efficiency and concerted efforts at cost reduction. Reductions in operating expenses included lower payroll and associated costs and a decrease in advertising and marketing spend. The reduced operating expenses were partially offset by $2 million increase in professional fees associated with the suspension of former CEO, Dov Charney and a "$1 million charge for an estimated settlement related to an industrial accident." Further, American Apparel estimates adjusted EBITDA will be in a range of $40 million to $45 million for the year.
As of June 30, the company had $10.2 million in cash and $16.9 million of additional availability under its $50 million ABL. The 10-Q further discloses that as of Aug. 1, the company had $22.9 million available for borrowing.
The filing states that American Apparel and Standard General are in the process of negotiating an unsecured credit agreement between one or more entities affiliated with Standard General and one or more foreign subsidiaries of the company as borrowers. The company expects to enter into this credit agreement as soon as practicable, according to the filing.
The company's stock, which trades under the symbol APP, closed at 94 cents on Monday, up 5.6% from the previous close.