DENVER, April 10 /PRNewswire-FirstCall/ — The Parent Company , a leading commerce, content and new media company for growing families, announced today its financial results for the fourth quarter ended February 2, 2008.
Net sales during the fourth quarter of fiscal 2007 totaled $76.0 million, compared to net sales of $85.6 million for the fourth quarter of fiscal 2006. Net income for the fourth quarter of fiscal 2007 was $0.3 million, or $0.01 per diluted share, compared to a net loss of $1.6 million, or $0.16 per diluted share, for the fourth quarter of fiscal 2006.
Net sales for the year ended February 2, 2008 totaled $106.5 million, compared to net sales of $116.5 million for the year ended February 3, 2007. Net loss for the year ended February 2, 2008 was $19.1 million, or $1.89 per diluted share, compared to a net loss of $20.8 million, or $5.05 per diluted share, for the year ended February 3, 2007.
Total debt at February 2, 2008 was $2.8 million compared to $53.0 million at February 3, 2007.
Commenting on the fourth quarter of 2007, President and CEO Michael J. Wagner said,
“Our eToys website posted a positive comparable increase during the fourth quarter when the toy industry as a whole was down 2ACIORFIPROCENTE due primarily to negative press coverage regarding toy safety issues.
“Our top line was greatly impacted by one strategic retail partner, whose catalog and online toy business we support. We experienced an $11 million decline with this partner, due to this partner’s systems challenges and a change in catalog marketing strategy. We’re working diligently with this partner to achieve sales levels we have seen in years past.
“Our board of directors is very focused on creating price stability and better float within our stock. Along these lines, we are actively reviewing accretive merger transactions that will increase the share float while improving the company’s bottom-line performance by leveraging existing infrastructure.
“Our family of brands includes seven e-commerce sites and three content and new media sites. Our sites attracted 18 million visitors this quarter, the fourth quarter traffic reflects the momentum we feel. Already, we have launched a newly refreshed BabyUniverse site and created our first-ever BabyUniverse catalog, designed to appeal to today’s moms. We’re focused on growing our current content business and developing new content initiatives. Additionally, other major retailers are seeking strategic retail partnerships with us because of our toy industry knowledge and expertise. We’re upbeat and optimistic about our 2008 business plan.”
Chief Executive Officer, Mike Wagner and Chief Financial Officer, Barry Hollingsworth will further discuss the Company’s earnings on April 10th at 10 AM Eastern Time.
About The Parent Company
The Parent Company (formerly BabyUniverse, Inc.) is a leading commerce, content and new media company for growing families. The Parent Company provides comprehensive eCommerce and eContent resources to help families plan, play and grow. The company’s toy business offers thousands of toys and children’s products through its eToys.com web site, catalogs and strategic retail partnerships; and personalized dolls and accessories through its My Twinn.com brand. Through its baby business, the company is a leading online retailer of brand-name baby, toddler and maternity products sold through the BabyUniverse.com and DreamtimeBaby.com web sites. The company’s luxury brands, PoshTots.com and PoshLiving.com, reach the country’s most affluent consumers with luxury baby apparel and furnishings. With its content sites, BabyTV.com, PoshCravings.com and ePregnancy.com, The Parent Company has established a recognized platform for the delivery of content and new media resources to a national audience of expectant parents. The Parent Company is a market-leading digital content and eCommerce company focused on parents.
Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties relating to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those expressed or implied by such forward-looking statements. You are advised to consult further disclosures we may make on related subjects in our future filings with the Securities and Exchange Commission.
In some cases, you can identify forward-looking statements by terminology such as “may,”"could,”"should,”"expect,”"plan,”"intend,”"anticipate,”"believe,”"estimate,”"predict,”"potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
The Parent Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)

Three Months Ended Twelve Months Ended
February 2, February 3, February 2, February 3,
2008 2007 2008 2007

Net sales $75,989,323 $85,648,407 $106,453,864 $116,543,241
Cost of sales 53,364,809 57,679,558 74,376,281 78,916,261
Gross profit 22,624,514 27,968,849 32,077,583 37,626,980

Operating expenses:
Fulfillment 5,960,500 7,025,887 12,839,125 12,305,121
Selling and
marketing 11,515,635 11,854,315 17,369,135 18,375,046
General and
administrative 4,613,820 4,297,107 13,411,592 12,358,312
Total operating
expenses 22,089,955 23,177,309 43,619,852 43,038,479

Operating income
(loss) 534,559 4,791,540 (11,542,269) (5,411,499)

Other expense, net (7,613) (21,829) (22,744)
Interest expense,
net (225,017) (1,601,054) (5,880,498) (6,049,976)
Income (loss) from
continuing operations
before income taxes 309,542 3,182,873 (17,444,596) (11,484,219)

Income tax benefit - - - -
Loss from discontinued
operations, net of tax - (4,797,163) (1,646,652) (9,360,323)
Net income (loss) $309,542 $(1,614,290) $(19,091,248) $(20,844,542)

Net loss attributable
to preferred
shareholders - (235,036) (641,593) (849,522)

Net income (loss)
attributable to
common shareholders $309,542 $(1,849,326) $(19,732,841) $(21,694,064)

Basic earnings per share
Income (loss) from
continuing operations
attributable to
common shareholders $0.01 $0.69 $(1.74) $(2.87)
Discontinued
operations $- $(1.12) $(0.16) $(2.18)
Net income (loss)
attributable to
common shareholders $0.01 $(0.43) $(1.89) $(5.05)

Diluted earnings per share
Income (loss) from
continuing operations
attributable to
common shareholders $0.01 $0.32 $(1.74) $(2.87)
Discontinued
operations $- $(0.49) $(0.16) $(2.18)
Net income (loss)
attributable to
common shareholders $0.01 $(0.16) $(1.89) $(5.05)

Shares used in
computation of
earnings per share
Basic 24,208,887 4,293,373 10,417,400 4,293,373
Diluted 24,415,952 9,796,050 10,417,400 4,293,373

The Parent Company and Subsidiaries
Consolidated Balance Sheets

February 3, February 3,
2008 2007
Assets
Cash and cash equivalents $206,589 $1,773,836
Accounts receivable, net 2,162,992 1,611,055
Inventory, net 17,785,846 14,830,007
Prepaid expenses and other current
assets 2,109,435 1,690,618
Assets related to discontinued
operations - 2,104,588
Total current assets 22,264,862 22,010,104

Fixed assets, net 4,979,361 3,874,502
Goodwill, intangibles and other 69,758,527 299,984
Total assets $97,002,750 $26,184,590

Liabilities and Stockholders’
(deficit) equity
Current liabilities:
Accounts payable $15,334,449 $9,022,324
Accrued expenses and other current
liabilities 2,164,844 1,861,696
Note payable-related party - 53,000,000
Interest payable-related party - 570,295
Note payable 2,845,253 -
Capital leases - current 341,465 504,272
Deferred rent 61,458 -
Deferred revenue 440,633 -
Liabilities associated with assets
related to discontinued operations - 152,181
Total current liabilities 21,188,102 65,110,769

Non-current liabilities:
Capital lease- long-term - 341,465
Lease payable- long-term 14,959 -
Deferred rent - 71,708
Total liabilities 21,203,061 65,523,942

Preferred stock, $.001 par value,
10,000,000 shares authorized,
0 and 11,596,381 shares issued and
outstanding as of February 2, 2008
and February 3, 2007, respectively - 5,798,190

Stockholders’ (deficit) equity:
Common stock, $.001 par value,
100,000,000 shares authorized,
24,239,665 and 4,293,373 shares issued
and outstanding as of February 2, 2008
and February 3, 2007, respectively 24,240 4,293
Additional paid-in capital 144,031,413 4,022,881
Accumulated deficit (68,255,964) (49,164,716)
Total stockholders’ (deficit) equity 75,799,689 (45,137,542)
Total liabilities and stockholders’
(deficit) equity $97,002,750 $26,184,590

The Parent Company