Naked Brand Group, Inc. (NASDAQ:NAKD) Q4 2019 Earnings Conference Call - Final Transcript

Jun 20, 2019 • 04:30 pm ET

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Naked Brand Group, Inc. (NASDAQ:NAKD) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Anna Johnson

continue to develop our digital roadmap, our experience, fit programs, an omni-channel strategy, which we are now geared for.

Our customers are right now purchasing two times to three times a year and they currently score a 72 net promoter score from the in-store experience, which fits in line with Apple published net promoter score for 2017. Let me tell you our customers are engaged and are themselves promoters of our brand. What we have lacked in our previous strategy is direct customer interaction and engagement. But we have a great opportunity to educate that customer database, making sure they get refitted every year. Our point of difference is that we have several brands that not only talk to each woman, but the same woman at different times of her life when need. This very reason in our current lifetime value is $450 over a five-year period as our customer shopped multiple brands and stayed with us for many years. In this aspect, I truly believe we are unique in the industry with very few competitors being able to fit alongside us on this lifetime customer journey.

For those of you that have seen our FY 2019 results, let talk to Slide number 11 and 12. It is a hard rate, but it's really important to talk to and review as it forms the basis of our financial turnaround story. As you can see revenue declined in fiscal 2019, primarily as a result of our cash constraints and resulting inventory supply issues that we faced prior to our recent balance sheet restructure. Demand still remain tight and hence their ability to maintain margins and a flat operational EBITDA even on the lower revenue base. However, we did experience the notable one-time transaction, restructure and transition expenses due to the merger between Naked and Bendon, further impacted by impairment charges due to that lower revenue. We believe these to be predominantly one-time expenses and that they will not have a significant impact on our financial results going forward.

Our balance sheet has been strengthened to USD14.25 million in capital raised after the close of fiscal 2019, and the reduction of bad debt year-on-year from USD35.9 to USD14.4 million. We continue to build inventory and we expect to return to positive cash flow from operations in the fourth quarter of 2019. These figures are a lever for change for us as we commence our restructuring and realize anticipated cost savings to ensure that we are delivering better year-on-year results. Our fiscal 2019 balance sheet for the period ending January 31st, 2019, chose the lower inventory levels as I've mentioned, but an increase in assets, which is derived from the acquisition of the Frederick's of Hollywood license. You can also see here the pay down of debt from $35.9 million at January 31st, 2018 to $14.4 million at January 31st, 2019. We've also continued to pay down liability and the planned capitalization in March to not only continue this but have a primary