News Column

Tatyana Designs Reports First Quarter 2014 Results

May 27, 2014

LAS VEGAS, May 27, 2014 (GLOBE NEWSWIRE) -- Tatyana Designs, Inc. (the "Company") (OTC Pink:TATD), a growing designer, manufacturer and retailer of retro inspired contemporary designs, today posted financial results for the first quarter of 2014.

For the three months ended March 31, 2014:

• As previously announced the severe weather challenges resulted in sporadic daily boutique closings and reduced consumer traffic consistent with the reports of many other retailers in Q1. The reduced traffic negatively impacted revenues, margins and operating costs.

 • Following growth of 43% in 2013 the Company reported net sales of $3.0 million, comparable to $3.1 million during the first quarter of 2013.

 • During Q1 the Company announced the rebranding of its boutiques as "Tatyana®", to reflecting the inspiration of founding fashion designer Tatyana Khomyakova. This change increased operating costs during Q1.

 • Adjusted EBITDA for the first three months of 2013 was a loss of $349,000 (see discussion below and accompanying table for non-GAAP measures) and the Company used $88,000 in cash from operating activities.

 • While margins were slightly improved from the prior year Q1, the loss resulted from a 25% increase in selling, general and administrative costs. These costs increased as the Company operated four additional boutiques in Q1 of 2014 and incurred costs associated with rebranding. The Company also invested in the development of expanded e-commerce and mobile platforms that are expected to contribute to increased revenues during future quarters.

 • The Company ended the quarter at March 31, 2014 with $541,000 cash, working capital of $1.5 million and inventory and inventory deposits of $3.0 million.

 • In April 2014 the Company announced proceeds from a $1.5 million convertible note financing and the addition of retail veteran Sam Battistone to the Board of Directors.

"As we previously announced, Q1 was a very challenging retail environment due primarily to extended periods of extreme weather," said Jan Glaser, co-CEO and treasurer of Tatyana Designs, Inc. "We are seeing improved traffic and sales in Q2 and are optimistic about the balance of 2014. While continuing our rebranding initiative we are applying the new investment to building a robust mobile app platform, expanding our e-commerce consumer reach and growing our business."

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 growing 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; possible inability to successfully implement our growth strategies or manage our growing business; possible inability to successfully open new boutiques and expand e-commerce business as planned; and possible inability to sustain levels of comparable-boutique sales.  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)
 March 31,December 31,
 20142013
 $$
ASSETS    
Current    
Cash  541  683
Inventories  2,778  2,576
Receivables and other  205  338
Total current assets  3,524  3,597
Property and equipment, net  707  698
Deferred income taxes  572  409
Deposits  443  443
Total assets  5,246  5,147
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current    
Accounts payable and accruals  1,407  1,061
Bank debt  226  202
Due stockholder  419  376
Total current liabilities  2,052  1,639
Deferred rent  1,105  1,080
Bank debt - long term  409  472
6% Convertible notes  300  300
Total liabilities  3,866  3,491
Stockholders' equity  1,380  1,656
Total liabilities and stockholders' equity  5,246  5,147
 
Tatyana Designs, Inc.
Condensed Consolidated Statements of Operations
(000's omitted except per share amount)
(unaudited)
 Three Months Ended
 March 31,
 20142013
 $$
Net sales  2,980  3,131
Cost of revenues  926  1,015
Gross profit  2,054  2,116
Selling, general and administrative  2,495  1,986
Income (loss) from operations  (441)  130
Other expenses  12  9
Income before income tax  (453)  121
Income tax expense (benefit)  (163)  49
Net income (loss)  (290)  72
     
Basic and diluted earnings per common share ($0.02)$0.01
     
Weighted average shares outstanding:    
Basic and diluted shares  12,185  11,935
     
Tatyana Designs, Inc.
GAAP to Non-GAAP Reconciliations
(000's omitted)
(unaudited)
 Three Months Ended
 March 31,
 20142013
 $$
Reconciliation of net income (loss) to EBITDA:  
Net income (loss)  (290)  72
Adjustments:    
Interest  17  20
Depreciation  48  29
Taxes  (163)  49
EBITDA  (388)  170
     
Reconciliation of net income (loss) to Adjusted EBITDA:
Net income (loss)  (290)  72
Adjustments:    
Interest  17  20
Depreciation  48  29
Taxes  (163)  49
Stock-based compensation  14  22
Non-cash increase deferred rent  25  156
Adjusted EBITDA  (349)  348

CONTACT: FOR FURTHER INFORMATION CONTACT: Jan Glaser 702.458.1632 Ext 5



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Source: Tatyana Designs, Inc.


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