American Apparel Inc. Reports First Quarter 2013 Financial Results and Reiterates Outlook for Full Year 2013

On May 8, 2013, Los Angeles-based American Apparel Inc., a vertically integrated manufacturer, distributor and retailer of branded fashion-basic apparel, announced financial results for its first quarter ended March 31, 2013.

Financial Performance Highlights for the First Quarter of 2013

• Net sales increased 4 percent to $138.1 million on an 8 percent increase in comparable store sales and a 1 percent increase in wholesale net sales
• Adjusted EBITDA improved by $1.4 million to a loss of $0.7 million from a loss of $2.1 million in the first quarter 2012

"Today we reported a $1.4 million improvement in Adjusted EBITDA to a loss of $ 0.7 million for the three months ended March 31, 2013 from a loss of $2.1 million for the three months ended March 31, 2012," stated John Luttrell, chief financial officer of American Apparel Inc. "Though the first quarter is historically the slowest quarter of the year, retail and online sales growth and the related leveraging of fixed costs helped us reduce our EBITDA loss. These results were substantially in line with plan and, accordingly, we reiterate our adjusted EBITDA guidance of $47 to $54 million for the full year 2013. We expect key initiatives in the areas of merchandise planning, supply chain, and inventory control to drive further sales and expense improvements for the balance of the year."

Dov Charney, chairman and CEO of American Apparel Inc., also made a statement. "Although we are pleased with our first quarter performance, we will not be satisfied until we exceed prior productivity levels in our stores (see Chart 1), significantly increase our online sales penetration levels (see Chart 2), and drive additional volume through our wholesale channel," he said. "Despite some liquidity challenges over the past two years, we have made the necessary investments that should allow us to exceed our prior EBITDA levels (see Chart 3). We have significantly improved our store presentation, responsibly added stores when it was appropriate to do so, improved technology in all three channels, increased inventory productivity and substantially improved the effectiveness of our supply chain operation."