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March 29, 2010

US: NexCen Brands narrows Q4, FY losses

NexCen Brands Inc, owner of the TAF and Shoebox New York retail franchise concepts, has narrowed its fourth quarter and full-year losses, but says it is “evaluating various strategic alternatives” for its current debt and capital structure.

NexCen Brands Inc, owner of the TAF and Shoebox New York retail franchise concepts, has narrowed its fourth quarter and full-year losses, but says it is “evaluating various strategic alternatives” for its current debt and capital structure.

The New York based firm, which also operates five quick service restaurant franchise concepts, posted a loss from continuing operations of $0.8m or $0.02 per share in the three months to 31 December, down from a loss of $2.1m or $0.04 per share, a year earlier.

Revenues were dragged down weak by credit markets for franchisees and softness in consumer spending and retail traffic, tumbling 17% to $10.6m from $12.6m.

Total operating expenses were slashed by 37% to $9.4m, and operating income rose to $1.1m from an operating loss of $2.4m last time.

Commenting on the results, CEO Kenneth J Hall said: “I believe that we have demonstrated that our multi-concept, vertically-integrated franchise model is sound, even in a challenging economic environment.”

But he warned the company’s current debt and capital structure “does not support the company’s long-term growth, viability and shareholder value. Addressing this issue continues to be our priority for the near future.”

For the full year, loss from continuing operations narrowed to $3.3m or $0.06 per share, from $153.6m or $2.71 per share the year before.

Total revenues fell 4% to $45.1m from $47.0m, but operating income increased to $6.2m from an operating loss of $147.2m last time.

“We have made significant progress in our turnaround strategy,” Mr Hall said, adding: “We also remain focused on growing and enhancing our franchise business.”

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