The Company was also required to determine the value to assign to the beneficial conversion feature associated with the convertible preferred stock. The Company assigned relative fair values of $8.5 million to the warrants, $14.7 million to the beneficial conversion feature and $0.1 million to the registration rights agreement, and reduced the carrying value of the convertible preferred stock by $23.3 million in the form of a discount.
This discount was amortized in the form of a deemed non-cash preferred dividend for the 13-week period ended July 30, 2005, representing the entire fair value assigned to the beneficial conversion feature, the warrants and the registration rights agreement. The preferred stock discount was recognized as a deemed non-cash preferred dividend in its entirety since the convertible preferred stock is immediately convertible and had no stated redemption date.
As a result of the deemed non-cash preferred stock dividend, the Company had a net loss attributable to common stockholders of $35.0 million, or $0.87 per basic and fully diluted share. This compares to a net loss attributable to common stockholders of $106.3 million, or $3.31 per basic and fully diluted share, for the same period a year ago.
Net sales for the 13-weeks ended July 30, 2005 were $126.3 million, compared with net sales of $105.7 million for the same period last year, a 19.5 percent increase. Sales increased over the same period a year ago despite asignificant reduction in store count, primarily related to the previously announced closure of 153 Wet Seal stores during its fiscal 2004 fourth quarter and fiscal 2005 first quarter. The sales increase was a result of a comparable store sales increase from continuing operations of 55.9 percent for the 13-week period ended July 30, 2005. Last year's comparable store sales declined 10.9 percent for the same 13-week period.
marketing@alchempro.com
