Crumbs Bake Shop reports Q4 net loss of US$4.8M, compared to year-ago loss of US$5.4M; net sales rise 5.4% to US$11.4M

Nevin Barich

NEW YORK , March 19, 2014 (press release) – Crumbs Bake Shop, Inc. ("Crumbs") (CRMB), the largest cupcake specialty store chain in the U.S., today reported financial results for the year ended December 31, 2013.

Fourth Quarter 2013 Highlights as Compared to Fourth Quarter 2012 Highlights:

Net sales increased 5.4% to $11.4 million.

Store operating weeks increased 32.4% to 973 from 735.

Gross profit increased 5.3% to $6.0 million.

GAAP net loss attributable to controlling and non-controlling interests was $(5.8) million compared to a net loss attributable to controlling and non-controlling interests of $(6.4) million.
Adjusted EBITDA1, a non GAAP measure, was $(2.7) million compared to $(1.8) million.

See financial tables for a reconciliation of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP measure, to GAAP results.

Edward M. Slezak, Chief Executive Officer, said "We have known for quite some time now that we needed to evolve our business model. During the fourth quarter we took the necessary steps to put ourselves in position to do just that. Our focus for 2014 will be on executing our initiatives and strategies of licensing our brand for complimentary product categories, positioning ourselves to move toward a franchise store model, and continuing to close under-performing stores. We believe these actions will put our business on a trajectory toward increased growth and vitality in the future."

Fourth Quarter 2013 Financial Results

Net sales increased 5.4% to $11.4 million from $10.8 million for the same period last year. Store operating weeks increased 32.4% to 973 from 735 for the fourth quarter of 2013 as compared to fourth quarter of 2012.

Cost of sales was $5.3 million compared to $5.1 million for the same period last year and remained relatively flat at 47.1% as a percentage of net sales. Gross profit increased 5.3% to $6.0 million from $5.7 million for the fourth quarter of 2012.

Staff expenses were $4.1 million compared to $5.4 million for the same period last year.

Occupancy expenses were $3.0 million compared to $2.7 million for the fourth quarter of 2012.

General and administrative expenses were $1.0 million, or 9.1% of net sales, compared to $0.9 million, or 8.6% of net sales, for the same period last year.

Adjusted EBITDA was $(2.7) million compared to $(1.8) million for the fourth quarter of 2012. See financial tables for a reconciliation of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP measure, to GAAP results.

The GAAP net loss attributable to the controlling and non-controlling interests was $(5.8) million compared to a net loss of $(6.4) million for the fourth quarter of 2012.

Store Closings

While Crumbs opened one store in the fourth quarter of 2013, it closed 9 underperforming stores in that same period. Year to date for 2014, Crumbs has closed an additional 6 underperforming stores. The Company hopes to complete the process of closing under-performing stores before the end of third quarter of 2014.

Earnings Call

Crumbs will host an earnings call to discuss fourth quarter 2013 financial results on March 19, 2014 at 5:00 PM Eastern Time. Hosting the call will be Edward M. Slezak, Chief Executive Officer and General Counsel, and John D. Ireland, Senior VP of Finance, Chief Financial Officer and Treasurer.

The conference call can be accessed live over the phone by dialing 877-407-4018 or for international callers by dialing 201-689-8471. A replay will be available one hour after the call and can be accessed by dialing 877-870-5176 or 858-384-5517 for international callers; the password is 13578545. The replay will be available until April 2, 2014.

The call will also be webcast live from the Company's Web site at www.crumbs.com under the Investor Relations/Events & Presentations section. An archived webcast will be available beginning approximately one hour after the end of the call.

About Crumbs Bake Shop, Inc.

The first Crumbs bake shop opened in March 2003 on the Upper West Side of Manhattan and is well known for its innovative and oversized gourmet cupcakes. The Company currently has 65 locations in 12 states and the District of Columbia.

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