Naked Brand Group Inc. (NASDAQ:NAKD) , an innovative fashion
and lifestyle brand, today announced financial results for its fourth quarter
and fiscal year ended January 31, 2017.
Fourth Quarter Results
For the fourth quarter of fiscal 2017, net sales increased by
21.9% to $0.55 million, compared to $0.45 million for the fourth quarter of
fiscal 2016. The sales growth was driven primarily by increases in sales to
specialty and retail accounts, as well as third-party eCommerce sites, in
addition to sales of out of season and overstock inventory through the
off-price sales channel.
Gross margin was 49.3% for the fourth quarter of fiscal 2017,
compared to (39.0)% for the same period of fiscal 2016. The increase was
primarily due to enhanced production efficiencies, as well as a product mix
shift benefit. In the fourth quarter of fiscal 2016, gross profit was
negatively impacted by a $0.3 million inventory write-down to reduce inventory
to estimated net realizable values, which arose as a result of seasonality and
product line changes.
For the fourth quarter of fiscal 2017, the Company’s operating
loss was $2.6 million, compared to an operating loss of $3.2 million for the
same period of fiscal 2016.
Net loss for the fourth quarter of fiscal 2017 was $2.6 million,
or $0.42 per share, compared to a net loss of $10.6 million, or $2.94 per
share, for the fourth quarter of fiscal 2016. The net loss for both fourth
quarter of fiscal 2017 and fourth quarter of fiscal 2016 included $1.3 million
in non-cash stock option compensation charges.
Full Fiscal Year Results
For the year ended January 31, 2017, net sales increased by
32.6% to $1.8 million, compared to $1.4 million for the year ended January 31,
2016. Gross margin was 20.5% for the fiscal year 2017, compared to 7.1% for the
fiscal year 2016.
The net loss for fiscal year 2017 was $10.8 million, or $1.77
per share, compared to a net loss of $19.1 million, or $10.13 per share, for
fiscal year 2016. The fiscal year 2017 net loss included $5.3 million in
non-cash stock option compensation charges, compared to $5.6 million of
non-cash stock option compensation charges in fiscal year 2016.
Balance Sheet Summary
Total cash and cash equivalents at January 31, 2017 were $0.9 million
compared to $4.8 million at January 31, 2016. As previously disclosed in its
Current Report on Form 8-K filed with the Securities and Exchange Commission
(“SEC”) on April 11, 2017, subsequent to fiscal year-end, the Company completed
an “at-the-market” offering for gross proceeds of $5.5 million through the sale
of 2,189,052 shares of the Company’s common stock at an average price of $2.51
per share.
The Company ended fiscal year 2017 with $2.2 million of
inventory on hand compared to $0.9 million for the same period of fiscal 2016.
The increase was the result of the procurement of additional collections,
including the women’s intimates and Wade X Naked collections.
Events Subsequent to the Fourth Quarter
As previously disclosed in its Current Report on Form 8-K filed
with the SEC on March 20, 2017, On March 17, 2017, the Company was informed by
the Listing Qualifications Staff of the Nasdaq Stock Market that the Company
had regained compliance with Nasdaq’s minimum stockholders’ equity listing
requirement.
As previously disclosed in its Current Report on Form 8-K filed
with the SEC on April 11, 2017, on April 10, 2017, the Company entered into
Amendment No. 3 to the Letter of Intent with Bendon Limited for a proposed
business combination. This most recent amendment includes $34 million in
positive adjustments to the net debt target for the anticipated combined
company’s balance sheet at the close of the transaction, with total net debt of
approximately $13 million compared to the previously contemplated total net
debt of approximately $51 million.
About Naked Brand Group Inc.:
Naked was founded on one basic desire–to create a new standard
for how products worn close to the skin fit, feel, and function. Naked’s
women’s and men’s collections are available at www.wearnaked.com, and Naked has a growing retail footprint
for its innovative and luxurious innerwear products in some of the leading
online and department stores in North America including Nordstrom,
Bloomingdale’s, Dillard’s, Soma, Saks Fifth Avenue, Amazon.com, BareNecessities.com,
and more. In 2014, renowned designer and sleepwear pioneer Carole Hochman
joined Naked as Chief Executive Officer, Chief Creative Officer, and Chairwoman
with the goal of growing Naked into a global lifestyle brand. In June 2015,
Naked announced a strategic partnership with NBA Miami HEAT (now Chicago Bulls)
star Dwyane Wade. The 3-time NBA Champion, 11-time All Star, and Olympic Gold
Medalist joined Naked’s Advisory Board, and is the Creative Director for a
signature collection of men’s innerwear which launched in 2016. Naked is
headquartered in New York City and plans to expand in the future into other
apparel and product categories that can exemplify the mission of the brand,
such as activewear, swimwear, sportswear and more. http://www.nakedbrands.com/
Additional Information and Where to Find It
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction. This
communication does not constitute the solicitation of any vote or approval. The
proposed business combination (the “Business Combination”) will be submitted to
the stockholders of the Company for their consideration. In connection
therewith, the to be formed Australian holding company (“NewCo”), Bendon
Limited (“Bendon”) and the Company intend to file relevant materials with the
SEC, including a Registration Statement on Form F-4 to be filed by NewCo that
will include a proxy statement of Naked that also constitutes a prospectus of
NewCo and a definitive proxy statement/prospectus (when they become available)
will be sent to Naked stockholders. Such documents are not currently available.
Before making any voting or investment decision with respect to the Business
Combination, investors and security holders of the Company are urged to read
the definitive proxy statement/prospectus and the other relevant materials
filed or to be filed with the SEC carefully and in their entirety when they
become available because they will contain important information about NewCo,
the Company, Bendon and the proposed Business Combination. The definitive proxy
statement/prospectus and other relevant materials (when they become available),
and any other documents filed by NewCo or the Company with the SEC, may be
obtained free of charge at the SEC web site at www.sec.gov. In addition, investors and security holders of
the Company may obtain free copies of the documents filed with the SEC by the
Company by directing a written request to: Naked Brand Group Inc., 95 Madison
Avenue, 10th Floor, New York, New York 10016, Attention: Investor Relations.
Participants in the Solicitation
Naked and its directors, executive officers and certain other
members of management and employees may be deemed to be participants in the
solicitation of proxies from the stockholders of Naked in connection with the
proposed Business Combination. Information regarding the participants in the
proxy solicitation of the stockholders of Naked and a description of their
direct and indirect interests, by security holdings or otherwise, will be
contained in the definitive proxy statement/prospectus regarding the proposed
Business Combination and other relevant materials to be filed with the SEC by
Naked when they become available. Additional information regarding the
directors and executive officers of Naked is also included in Naked’s Annual
Report on Form 10-K for the year ended January 31, 2017. This document is
available free of charge at the SEC’s web site (www.sec.gov) and from Investor Relations at Naked at the
address described above.
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