OMAHA, NE--(Marketwired - Nov 30, 2016) - Gordmans Stores, Inc. (NASDAQ: GMAN), an Omaha-based apparel and home décor retailer, announced results for its third quarter and nine months ended October 29, 2016. 

Third Quarter Review

• Diluted loss per share of ($0.25) was in-line with guidance range of ($0.24) to ($0.29).
• Selling, general and administrative expenses decreased $2.0 million, or 2.8%.
• Brick and mortar comparable store inventory decreased 5% compared to a year ago.
• Three new stores opened in three existing markets.

"We experienced a modest 160 basis point improvement in our sales trend versus the second quarter and delivered a diluted loss per share near the high-end of our guidance range," commented Andy Hall, President and Chief Executive Officer. "While the declines in our top line have moderated, our overall business continues to underperform versus our long-term expectations. Therefore, we continue to manage our expense structure to better align with the challenging environment. Third quarter operating expenses were down $2 million as we started to benefit from certain cost savings initiatives implemented following our comprehensive expense review."

"As the holiday selling season gets underway, we are optimistic that our merchandise offerings and marketing programs position us to improve upon our third quarter comparable store sales trend. We are pleased with our inventory content, aging and marking," continued Hall. "Following a slow start to the fourth quarter, sales picked up midway through November with the onset of colder weather. We are pleased with our Thanksgiving and Black Friday weekend sales performance, during which we achieved a meaningful positive sales comp, and the momentum it has provided heading into December."

Third Quarter Financial Results
Net sales for the third quarter ended October 29, 2016 decreased 6.7%, to $143.5 million as compared to $153.9 million for the third quarter last year. Comparable store sales on an owned basis decreased 9.5%. On an owned plus licensed basis, comparable store sales declined 9.3%.

Gross profit decreased to $62.9 million, or 43.8% of net sales, from $68.4 million, or 44.4% of net sales, in the third quarter of fiscal 2016. The 60 basis point decrease in gross margin was primarily due to higher markdowns as a percent of sales, even though the total dollars were less than last year.

Selling, general and administrative expenses decreased $2.0 million to $69.9 million, or 48.7% of net sales, compared to $71.9 million, or 46.7% of net sales, in the third quarter last year. The decrease was primarily due to lower advertising and lower store expenses during the third quarter, partially offset by higher professional fees related to the comprehensive expense review, eCommerce operations which were launched in mid-2015 and higher depreciation expense.

The net loss for the third quarter of fiscal 2016 was $4.8 million, or ($0.25) per diluted share, compared to a net loss of $2.8 million, or ($0.14) per diluted share, in the third quarter of fiscal 2015.

Nine Month Financial Results
Net sales for the first nine months of fiscal 2016 decreased 5.7%, to $417.8 million as compared to $443.2 million for the first nine months last year. Comparable store sales on an owned basis decreased 8.5%. On an owned plus licensed basis, comparable store sales declined 8.3%. Gross profit decreased 7.2%, to $181.9 million, and represented 43.6% of net sales, compared to $196.1 million and 44.3% of net sales last year, which represents a 70 basis point decrease. 

The net loss for the first nine months of fiscal 2016 was $12.5 million, or ($0.64) per diluted share, compared to a net loss of $2.8 million, or ($0.28) per diluted share in the first nine months of fiscal 2015.

New Stores
During the third quarter, the Company opened three new stores: Liberty, Missouri; Colorado Springs, Colorado; and Parma, Ohio. The Company has opened four net new stores year-to-date and has no store openings or closings planned for the fourth quarter of 2016. Additionally, there are no planned store openings in fiscal 2017.

Fourth Quarter Outlook
For the 2016 fourth quarter, the Company expects net sales to be between $197 and $203 million, which reflects a comparable store sales decrease on an owned plus licensed basis in the range of (8.5%) to (5.5%). The Company expects gross profit margin to be comparable to last year. Total selling, general and administrative expenses are expected to be at or below last year due to lower store and distribution center expenses, partially offset by higher eCommerce related expenses and higher depreciation. The Company projects diluted earnings per share in the range of $0.01 to $0.06 for the fourth quarter. The weighted average diluted share count is expected to be approximately 19.5 million. 

Conference Call Information
A conference call to discuss third quarter financial results is scheduled for today, November 30, 2016 at 11:00 a.m. Eastern Time. The conference call will be webcast live at http://investor.gordmans.com/events.cfm. A replay of this call will be available within two hours of the conclusion of the call and will remain on the website for one year.

About Gordmans Stores, Inc.
Gordmans (NASDAQ: GMAN) is an everyday value priced department store featuring a large selection of name brands and the latest fashions and styles at up to 60 percent off department and specialty store prices. The wide range of merchandise includes apparel and footwear for men, women and children, as well as accessories, home décor, gifts, designer fragrances, fashion jewelry, bedding and bath, accent furniture and toys. Founded in 1915, Gordmans guests can shop in any of our 106 stores in 22 states or at gordmans.com. For more information about Gordmans, please visit www.gordmans.com. 

Safe Harbor Statement
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. Words such as "guidance," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding expected net sales, net income < loss >, comparable store sales, diluted earnings < loss > per share, and store expansion, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are (1) changes in consumer spending and general economic conditions; (2) our ability to identify and respond to new and changing fashion trends, guest preferences and other related factors; (3) fluctuations in our sales and profitability on a seasonal basis; (4) intense competition from other retailers; (5) our ability to maintain or improve levels of comparable store sales; (6) our ability to attract and retain talent; (7) our successful implementation of advertising, marketing and promotional strategies; (8) factor credit availability and (9) increased reliance on bank borrowings to fund operations.

Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including other risks, relevant factors and uncertainties identified in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended January 30, 2016, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

GORDMANS STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
			13 Weeks Ended October 29, 2016 (Unaudited)				13 Weeks Ended October 31, 2015 (Unaudited)				39 Weeks Ended October 29, 2016 (Unaudited)				39 Weeks Ended October 31, 2015 (Unaudited)
Net sales			$	143,483			$	153,856			$	417,791			$	443,230
License fees from leased departments				1,944				2,196				5,941				6,615
Cost of sales				(82,553	)			(87,700	)			(241,784	)			(253,698	)
	Gross profit			62,874				68,352				181,948				196,147
Selling, general and administrative expenses				(69,906	)			(71,915	)			(199,048	)			(200,052	)
	Loss from operations			(7,032	)			(3,563	)			(17,100	)			(3,905	)
Interest expense, net				(874	)			(892	)			(2,539	)			(2,966	)
Loss on extinguishment of debt				--				--				--				(2,014	)
	Loss before taxes			(7,906	)			(4,455	)			(19,639	)			(8,885	)
Income tax benefit				3,083				1,692				7,114				3,465
	Net loss		$	(4,823	)		$	(2,763	)		$	(12,525	)		$	(5,420	)
Basic loss per share			$	(0.25	)		$	(0.14	)		$	(0.64	)		$	(0.28	)
Diluted loss per share			$	(0.25	)		$	(0.14	)		$	(0.64	)		$	(0.28	)
Basic weighted average shares outstanding				19,482				19,424				19,457				19,397
Diluted weighted average shares outstanding				19,482				19,424				19,457				19,397
Ratios as a percent of sales:
Gross profit				43.8	%			44.4	%			43.6	%			44.3	%
Selling, general and administrative expenses				48.7	%			46.7	%			47.6	%			45.1	%
Loss from operations				(4.9	%)			(2.3	%)			(4.1	%)			(0.9	%)
Effective tax rate				39.0	%			38.0	%			36.2	%			39.0	%
Net loss				(3.4	%)			(1.8	%)			(3.0	%)			(1.2	%)

GORDMANS STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
				October 29, 2016 (Unaudited)				January 30, 2015 (Unaudited)				October 31, 2015 (Unaudited)
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents			$	8,437			$	6,969			$	8,860
	Accounts receivable				4,513				3,896				3,814
	Landlord receivable				3,643				3,805				2,290
	Income taxes receivable				--				2,746				4,140
	Merchandise inventories				153,602				106,566				165,082
	Deferred income taxes				4,959				5,077				2,896
	Prepaid expenses and other current assets				8,938				8,096				9,301
		Total current assets			184,092				137,155				196,383
PROPERTY AND EQUIPMENT, net					85,193				86,375				86,443
INTANGIBLE ASSETS, net					1,820				1,820				1,820
OTHER ASSETS, net					3,700				3,822				3,586
TOTAL ASSETS				$	274,805			$	229,172			$	288,232
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
	Accounts payable			$	94,680			$	66,393			$	111,215
	Accrued expenses				29,346				30,151				30,256
	Current portion of long-term debt, net				59,397				18,390				37,247
		Total current liabilities			183,423				114,934				178,718
NONCURRENT LIABILITIES:
	Long-term debt, less current portion, net				26,074				27,345				27,744
	Deferred rent				32,225				33,522				31,147
	Deferred income taxes				10,062				18,130				16,344
	Other liabilities				311				347				188
		Total noncurrent liabilities			68,672				79,344				75,423
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
	Preferred stock				--				--				--
	Common stock				20				20				20
	Additional paid-in capital				54,898				54,601				54,887
	Accumulated deficit				(32,208	)			(19,727	)			(20,816	)
		Total stockholders' equity			22,710				34,894				34,091
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				$	274,805			$	229,172			$	288,232

GORDMANS STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
					39 Weeks Ended October 29, 2016 (Unaudited)				39 Weeks Ended October 31, 2015 (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss					$	(12,525	)		$	(5,420	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization expense					13,520				12,368
	Write-off of deferred financing fees related to extinguishment of debt					--				1,722
	Deferred tax valuation allowance					545				--
	Share-based compensation expense, net of forfeitures					527				1,011
	Loss on property disposals and impairment charges					399				708
	Amortization of deferred financing fees					200				414
	Deferred income taxes					(8,495	)			707
	Deferred tax asset shortfall related to share-based compensation expense					(230	)			(26	)
	Net changes in operating assets and liabilities:
		Accounts, landlord and income taxes receivable				2,291				3,770
		Merchandise inventories				(47,036	)			(70,612	)
		Prepaid expenses and other current assets				(842	)			(766	)
		Other assets				122				166
		Accounts payable				28,287				46,866
		Deferred rent				(1,297	)			(4,234	)
		Accrued expenses and other liabilities				(329	)			1,539
			Net cash used in operating activities			(24,863	)			(11,787	)
CASH FLOWS FROM INVESTING ACTIVITIES:
		Purchase of property and equipment				(22,847	)			(14,283	)
		Proceeds from sale-leaseback transactions				9,601				3,556
		Cash received on sale of property and equipment				44				--
		Proceeds from insurance settlement				--				21
			Net cash used in investing activities			(13,202	)			(10,706	)
CASH FLOWS FROM FINANCING ACTIVITIES:
		Borrowings on revolving line of credit				179,547				169,350
		Repayments on revolving line of credit				(138,576	)			(144,493	)
		Proceeds from secured term loan				--				30,000
		Payment of long-term debt				(1,387	)			(29,980	)
		Payment of debt financing fees				(48	)			(863	)
		Payment penalty on early extinguishment of debt				--				(292	)
		Dividends paid				(3	)			(34	)
		Proceeds from the exercise of stock options				--				31
			Net cash provided by financing activities			39,533				23,719
NET INCREASE IN CASH AND CASH EQUIVALENTS						1,468				1,226
CASH AND CASH EQUIVALENTS, Beginning of period						6,969				7,634
CASH AND CASH EQUIVALENTS, End of period					$	8,437			$	8,860