Source: http://ir.gymboree.com/node/13121/html
Timestamp: 2019-04-18 22:16:11+00:00

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As of June 11, 2012, the registrant had 1,000 shares of common stock outstanding, par value $0.001 per share, all of which are owned by Giraffe Holding, Inc., the registrants indirect parent holding company, and are not publicly traded.
* The Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, but is not required to file such reports under such sections.
The unaudited interim condensed consolidated financial statements, which include The Gymboree Corporation (the Company, we or us) and its 100%-owned subsidiaries, as well as Gymboree (China) Commercial and Trading Co. Ltd. (Gymboree China) and Gymboree (Tianjin) Educational Information Consultation Co. Ltd. (Gymboree Tianjin) (collectively, the Joint Venture or VIEs), have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with generally accepted accounting principles have been omitted. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the fiscal year ended January 28, 2012 filed with the Securities and Exchange Commission on April 26, 2012.
The accompanying interim condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations, and cash flows for the periods presented. All such adjustments are of a normal and recurring nature, except the loss on extinguishment of debt further described in Notes 4 and 5, recorded in the first quarter of fiscal 2012 and the first quarter of fiscal 2011, respectively, and a $10.7 million adjustment to cost of goods sold resulting from an increase in the net book value of inventory as a result of purchase accounting related to the Merger (as defined below) recorded in the first quarter of fiscal 2011.
The results of operations for the 13 weeks ended April 28, 2012 are not necessarily indicative of the operating results that may be expected for the 53 week period ending February 2, 2013 (fiscal 2012) or any future period.
Retail Franchise net sales, previously reported in Other net sales for the 13 weeks ended April 30, 2011, have been separately disclosed to conform to the current year presentation.
In the accompanying condensed consolidated balance sheet as of April 30, 2011, we reclassified approximately $4.4 million of leasehold improvement costs previously reported within land and buildings to be reported within leasehold improvements to properly classify such costs. Our net property and equipment balance as of April 30, 2011 did not change as a result of such reclassifications.
In May 2011, the FASB issued guidance to amend the accounting and disclosure requirements on fair value measurements. The new guidance limits the highest-and-best-use measure to nonfinancial assets, permits certain financial assets and liabilities with offsetting positions in market or counterparty credit risks to be measured at a net basis, and provides guidance on the applicability of premiums and discounts. Additionally, this guidance requires entities to disclose the categorization by level of the fair value hierarchy for items that are not measured at fair value in the statement of financial position but for which the fair value is required to be disclosed. We adopted this guidance as of January 29, 2012. The adoption of this guidance did not have a material impact on our condensed consolidated financial statements.
In June 2011, the FASB issued guidance to amend the presentation of comprehensive income. This new guidance requires that all non-owner changes in stockholders equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. We early adopted this guidance effective for our fiscal year ended January 28, 2012, as permitted under the standard, and applied it retrospectively to the first quarter ended April 30, 2011 as required to present the total of comprehensive income, the components of net income, and the components of other comprehensive income in two separate consecutive statements.
In September 2011, the FASB issued guidance to amend the testing of goodwill for impairment. This new guidance permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. This guidance was effective January 29, 2012.
In December 2011, the FASB issued guidance to amend the disclosure requirements regarding the offsetting of assets and liabilities related to financial and derivative instruments. This new guidance requires an entity to disclose quantitative information in a tabular format to allow users of their financial statements to evaluate the effect or potential effect on the entitys financial position of netting arrangements. This new guidance will be effective for us as of February 3, 2013. We are currently evaluating the impact of this guidance on our financial statement presentation of our derivative and financial instruments.
In the fourth quarter of fiscal 2011, due to higher average unit costs resulting from higher commodity prices (primarily cotton) and a higher level of markdown selling, we concluded that there was goodwill impairment in the Gymboree Outlet reporting unit. Although this analysis has not been completed due to its complexity, based on the work we performed to date, we recorded a preliminary estimate of impairment for goodwill of $28.3 million in the fourth quarter of fiscal 2011. The impairment charge is subject to finalization of fair values, which we expect to complete during the remainder of fiscal 2012. We believe that the preliminary estimate of impairment is reasonable and represents our best estimate of the impairment charge to be incurred; however, it is possible that material adjustments to the preliminary estimate may be required as the analysis is finalized.
borrowing adjusted for certain additional costs (Adjusted LIBOR), in each case plus an applicable margin. In addition to paying interest on outstanding principal under the ABL, we are required to pay a commitment fee on unutilized commitments thereunder of 0.375% per annum. If at any time the aggregate amount of outstanding loans, unreimbursed letter of credit drawings and undrawn letters of credit under the ABL exceeds the lesser of (a) the commitment amount and (b) the borrowing base, we will be required to repay outstanding loans and/or cash collateralize letters of credit in an aggregate amount equal to such excess, with no reduction of the commitment amount. The ABL contains financial and other covenants that, among other things, restrict our ability to incur additional indebtedness and pay dividends. As of April 28, 2012, we were in compliance with these covenants. As of April 28, 2012, there was $28.0 million of commercial and standby letters of credit outstanding and no borrowings outstanding. The obligations under the ABL are secured, subject to certain exceptions, by substantially all of our assets. We and our 100%-owned domestic subsidiaries have fully and unconditionally guaranteed our obligations under the ABL.
Term Loan through an amendment and restatement of our existing credit agreement to lower the interest rate, remove certain financial covenants and extend the maturity date from November 2017 to February 2018. In the first quarter of fiscal 2011, we recorded a loss on extinguishment of debt of approximately $19.6 million as a result of the refinancing, which included the write-off of approximately $14.1 million in deferred financing costs and $1.8 million of OID related to the original Term Loan. The obligations under the Term Loan are secured, subject to certain exceptions, by substantially all of our assets and those of our 100%-owned domestic subsidiaries. The Company and our 100%-owned domestic subsidiaries also have fully and unconditionally guaranteed the Companys obligations under the Term Loan.
As part of the Transaction, we issued $400 million aggregate principal amount of 9.125% senior notes (the Notes) due in December 2018. Interest on the Notes is payable semi-annually. If the Company or our subsidiaries sell certain assets, we generally must either invest the net cash proceeds from such sale in our business within a certain period of time, use the proceeds to prepay senior secured debt or make an offer to purchase a principal amount of the Notes equal to the excess net cash proceeds at a redemption price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest. Upon a change in control, we may also be required to make an offer to purchase all of the Notes at a redemption price equal to 101% of the principal amount of the Notes redeemed plus accrued and unpaid interest. The Notes also contain optional redemption provisions, but subject to certain exceptions, we will not be entitled to redeem the Notes at our option prior to December 1, 2014. The Notes are unsecured senior obligations of the Company. The Company and our 100%-owned domestic subsidiaries have fully and unconditionally guaranteed the Companys obligations under the Notes (see Note 11).
Interest expense was $21.7 million and $24.0 million for the 13 weeks ended April 28, 2012 and April 30, 2011, respectively, including $1.8 million and $1.7 million, respectively, of amortization of deferred financing costs and accretion of OID.
Level 2Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3Unobservable inputs for the asset or liability, which reflect the Companys own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).
significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
The tables below present the Companys assets and liabilities measured at fair value on a recurring basis as of April 28, 2012, January 28, 2012, and April 30, 2011 aggregated by the level in the fair value hierarchy within which those measurements fall. There were no purchases, sales, issuances, or settlements related to recurring Level 3 measurements during the thirteen weeks ended April 28, 2012 or April 30, 2011. There were no transfers into or out of Level 1 and Level 2 during the thirteen weeks ended April 28, 2012 or April 30, 2011.
Our cash equivalents, which are primarily placed in money market funds, are valued at their original purchase prices plus interest that has accrued at the stated rate. The carrying value of these funds is considered to approximate fair value due to the short maturity of these instruments.
The fair value of our interest rate caps was determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) were based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, were incorporated in the fair values to account for potential nonperformance risk. In adjusting the fair value of these contracts for the effect of nonperformance risk, we have considered any applicable credit enhancements such as collateral postings, thresholds, mutual puts, and guarantees.
Although we have determined that the majority of the inputs used to value our interest rate caps fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with these derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by our counterparties. However, as of April 28, 2012, January 28, 2012, and April 30, 2011, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our interest rate cap positions and determined that the credit valuation adjustment was not significant to the overall valuation. As a result, we classified our interest rate caps derivative valuations in Level 2 of the fair value hierarchy.
The fair value of our forward foreign exchange contracts was determined using the market approach and Level 2 inputs. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. We had no other financial assets or liabilities measured at fair value as of April 28, 2012, January 28, 2012 and April 30, 2011.
We measure certain non-financial assets and liabilities, including long-lived assets, at fair value on a non-recurring basis. During the 13 weeks ended April 30, 2011, we recorded charges related to the impairment of assets at under-performing stores, which reduced the carrying amount of the applicable long-lived assets from $0.7 million to their fair value of zero. We recorded no impairment charges related to assets at under-performing stores during the 13 weeks ended April 28, 2012.
The fair market value of these non-financial assets was determined using the income approach and Level 3 inputs, which required management to make significant estimates about future cash flows. Management estimates the amount and timing of future cash flows based on its experience and knowledge of the retail market in which each store operates. These impairment charges are included in SG&A expenses in the accompanying condensed consolidated statements of operations.
In the fourth quarter of fiscal 2011, we recorded a preliminary estimate of goodwill impairment of $28.3 million that is subject to finalization (see Note 3).
We enter into forward foreign exchange contracts with respect to certain purchases in United States dollars of inventory to be sold in our retail stores in Canada. The purpose of these contracts is to protect our margins on the eventual sale of the inventory from fluctuations in the exchange rate for Canadian and United States dollars. The term of these forward exchange contracts is generally less than one year. These contracts are treated as cash-flow hedges. Amounts reported in accumulated other comprehensive loss related to these forward foreign exchange contracts will be reclassified to cost of goods sold over a three-month period. We also enter into forward foreign exchange contracts with respect to short-term intercompany balances between U.S. and Canadian entities. The purpose of these contracts is to protect us from fluctuations in the exchange rate for Canadian and United States dollars upon the settlement of such balances. These contracts are not designated as hedges. Consequently, changes in the fair value of these contracts are included in other income.
and any related amounts reported in accumulated other comprehensive loss, are being amortized to interest expense through December 23, 2016, as interest payments are made on the underlying Term Loan. We estimate that approximately $0.4 million will be reclassified from accumulated other comprehensive loss to interest expense within the next 12 months.
For a derivative instrument designated as a cash-flow hedge, the effective portion of the derivatives gain or loss is initially reported as a component of other comprehensive loss and is subsequently recognized in earnings when the hedged exposure is recognized in earnings. Gains or losses on the derivative representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness are recognized in earnings.
In addition to the cash-flow hedges above, as of April 28, 2012 and April 30, 2011, we had one forward foreign exchange contract with a notional amount of $2.4 million and $2.9 million, respectively, that was not designated as a hedge. The table below presents the fair value of all of our derivative financial instruments as well as their classification on the condensed consolidated balance sheets (in thousands).
from accumulated other comprehensive loss into earnings as a result of forecasted transactions that failed to occur or as a result of hedge ineffectiveness.
Gymboree China, Gymboree Tianjin and the Company are indirectly controlled by Gymboree Holding, Ltd. and investment funds sponsored by Bain Capital, Gymboree China and Gymboree Tianjin have been determined to be variable interest entities, and we (as well as our 100%-owned subsidiaries) are a member of a related party group that controls the VIEs and absorbs the economics of the VIEs. Based on our relationship with the VIEs, we determined that we are most closely associated with the VIEs, and therefore, consolidate them as the primary beneficiary. However, as we have a 0% ownership interest in the VIEs, 100% of the results of operations of the VIEs are recorded as noncontrolling interest. The assets of the VIEs cannot be used by us. The liabilities of the VIEs are comprised mainly of short-term accrued expenses, and its creditors have no recourse to our general credit or assets.
additional information. Corporate overhead (costs related to our distribution center and shared corporate services) is included in the retail stores segment. Amounts previously reported have been reclassified to conform to the addition of the retail franchise reportable segment to the current year presentation. Additionally, we completed the allocation of goodwill and certain other intangible assets to our reporting units and segments during the fourth quarter of fiscal 2011, and have restated the segment disclosures below as of April 30, 2011, resulting in the allocation of $16.4 million and $23.6 million of goodwill, and $36.2 million and $4.7 million of certain other intangible assets, to our Gymboree Play & Music and retail franchise reportable segments, respectively, and in the allocation of $39.8 million of goodwill to our Canada and Australia geographical segments.
Interest expense, depreciation and amortization expense and capital expenditures have not been separately disclosed above as the amounts primarily relate to the retail segment. The Gymboree Play & Music and VIE reportable segments recorded $0.5 million and $1.8 million, respectively, in intersegment revenues for the 13 weeks ended April 28, 2012. There were no other material intersegment revenues.
The Company and its 100%-owned domestic subsidiaries have fully and unconditionally guaranteed the Notes. The following condensed consolidating financial information presents the financial position, results of operations and cash flows of The Gymboree Corporation and the guarantor and non-guarantor subsidiaries. The VIEs financial results are included in the non-guarantor subsidiaries. As of April 30, 2011, all of our goodwill and $3.7 million of certain other intangible assets had been allocated to The Gymboree Corporation for the purposes of our guarantor and non-guarantor subsidiaries disclosure. During the fourth quarter of fiscal 2011, we completed the allocation of goodwill and certain other intangible assets to our guarantor and non-guarantor subsidiaries, which resulted in $887.6 million and $39.8 million of goodwill being allocated to guarantor and non-guarantor subsidiaries, respectively and $3.7 million of other intangible assets being allocated to our guarantor subsidiaries. These adjustments have been reflected in the tables below for prior periods. Intercompany transactions are eliminated.
The Company and its guarantor subsidiaries participate in a cash pooling program. As part of this program, cash balances are generally swept on a daily basis between the guarantor subsidiary bank accounts and those of the Company. In addition, the Company pays expenses on behalf of its guarantor and non-guarantor subsidiaries on a regular basis. These types of transactions have been accounted for as intercompany transfers within financing activities.
The Companys transactions include interest, tax payments and intercompany sales transactions related to administrative costs incurred by the Company, which are billed to guarantor and non-guarantor subsidiaries on a cost plus basis. All intercompany transactions are presumed to be settled in cash and therefore are included in operating activities. Non-operating cash flow changes have been classified as financing activities.
We have reviewed the accompanying condensed consolidated balance sheets of The Gymboree Corporation and subsidiaries (the Company) as of April 28, 2012 and April 30, 2011, and the related condensed consolidated statements of operations, comprehensive income (loss), and cash flows for the thirteen week periods then ended. These interim financial statements are the responsibility of the Companys management.
We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of The Gymboree Corporation and subsidiaries as of January 28, 2012, and the related consolidated statements of operations, comprehensive income (loss), stockholders equity, and cash flows for the fiscal year then ended (not presented herein); and in our report dated April 26, 2012, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph relating to a change in the Companys method of presenting comprehensive income for the year ended January 28, 2012, due to the adoption of Financial Accounting Standards Board Accounting Update No. 2011-05, Presentation of Comprehensive Income. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 28, 2012, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
As discussed in Note 2 to the condensed consolidated interim financial statements, the Company changed its method of presenting comprehensive income during the fiscal year ended January 28, 2012, due to the adoption of Financial Accounting Standards Board Accounting Update No. 2011-05, Presentation of Comprehensive Income. The change in presentation has been applied retrospectively to the quarter ended April 30, 2011.
This quarterly report contains forward-looking statements. You can identify forward-looking statements because they contain words such as believe, expect, may, will, should, could, seek, intend, plan, estimate, or anticipate or similar expressions that concern our strategy, plans or intentions. All statements we make relating to: future sales, costs and expenses and gross profit percentages; the continuation of historical trends; our ability to operate our business under our capital and operating structure; and the sufficiency of our cash balances and cash generated from operating and financing activities for future liquidity and capital resource needs are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we had expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results.
Important factors that could cause actual results to differ materially from our expectations (cautionary statements) are disclosed under Item 1A, Risk Factors, in our Annual Report on Form 10-K for the fiscal year ended January 28, 2012, filed with the Securities and Exchange Commission on April 26, 2012 (the Fiscal 2011 Annual Report). We encourage you to read these risk factors disclosures carefully. We caution investors not to place substantial reliance on the forward-looking statements contained in this quarterly report. These statements, like all statements in this quarterly report, speak only as of the date of this quarterly report (unless another date is indicated), and we undertake no obligation to update or revise the statements in light of future developments, except as otherwise required by law.
The Gymboree Corporation (we, us, our, Gymboree and Company) is one of the largest childrens apparel specialty retailers in North America, offering collections of high-quality apparel and accessories. As of April 28, 2012, we operated a total of 1,166 retail stores, including 1,119 stores in the United States (586 Gymboree® stores, 152 Gymboree Outlet stores, 125 Janie and Jack® shops and 256 Crazy 8® stores), 41 Gymboree stores in Canada, 3 Gymboree stores in Australia, 1 Gymboree store in Puerto Rico and 2 Gymboree Outlet stores in Puerto Rico, as well as 3 online stores at www.gymboree.com, www.janieandjack.com and www.crazy8.com. The Company also offers directed parent-child developmental play programs at 716 franchised and Company-operated Gymboree Play & Music® centers in the United States and 39 other countries. In addition, as of April 28, 2012, third-party overseas partners operated 28 Gymboree retail stores in the Middle East and South Korea, and Gymboree (China) Commercial and Trading Co. Ltd. (Gymboree China) and Gymboree (Tianjin) Educational Information Consultation Co. Ltd. (Gymboree Tianjin) (collectively, the Joint Venture or VIEs) operated two Gymboree retail stores in China.
During the first quarter of fiscal 2012, we opened 24 stores, of which 22 were Crazy 8 stores. During the remainder of fiscal 2012, we plan to open approximately 81 new stores consisting mostly of Crazy 8 stores.
Net retail sales for the first quarter of fiscal 2012 increased to $288.1 million from $265.9 million in the same period last year, an increase of $22.2 million, or 8.3%. Comparable store sales for the first quarter of fiscal 2012 increased 1% compared to the same period in the prior year. The increase in net retail sales was also due to net store and square footage growth of 79 stores and approximately 183,000 square feet, respectively. There were 1,166 stores open at April 28, 2012 compared to 1,087 at April 30, 2011.
Gymboree Play & Music net sales for the first quarter of fiscal 2012 increased to $5.8 million from $2.9 million in the same period last year, an increase of $2.9 million or 100%. This increase was primarily due to the termination of our agreement with a Gymboree Play & Music master franchisee in China in the third quarter of fiscal 2011. Upon this termination, we assumed the role of master franchisor, resulting in the recording of an additional $2.6 million in revenue for the first quarter of fiscal 2012 from the unit franchisees. We previously recorded revenue net of the fee paid to the previous master franchisor for servicing the unit franchisees.
Retail franchise net sales for the first quarter of fiscal 2012 increased to $3.8 million from $1.4 million in the same period last year. As of April 28, 2012, our third-party overseas partners operated 28 Gymboree stores, compared to seven stores as of the end of the same period last year.
Gross profit for the first quarter of fiscal 2012 increased to $121.8 million from $110.9 million in the same period last year. However, the first quarter of fiscal 2011 included a $10.7 million adjustment to cost of goods sold from an increase in the net book value of inventory as a result of purchase accounting. If this adjustment was excluded, gross profit as a percentage of sales for the first quarter of 2012, when compared to the same period last year, decreased due to higher average unit costs resulting from higher commodity prices (primarily cotton).
impairment charges related to underperforming stores; and lower bank card fees partially offset by increased expenses related to the Joint Venture.
Interest expense decreased to $21.7 million in the first quarter of fiscal 2012 compared to $24 million in the same period last year. The decrease of $2.3 million is primarily related to fees paid in connection with the refinancing of our $820 million senior secured term loan facility (Term Loan) in the first quarter of fiscal 2011.
Loss on extinguishment of debt was $1.2 million for the first quarter of fiscal 2012 compared to $19.6 million in the same period last year. In March 2012, we amended and restated our senior secured asset-based revolving credit facility (as so amended and restated, ABL or ABL Facility and, together with the Term Loan, collectively, the Senior Credit Facilities) to, among other things, lower the interest rate and extend the maturity date. The loss recorded in the first quarter of 2011 was due to the refinancing of our Term Loan in February 2011.
The effective tax rate for the first quarter of fiscal 2012 and 2011 was 41.9% and 39.3%, respectively. The actual fiscal 2012 effective tax rate will ultimately depend on several variables, including the mix of earnings between domestic and international operations, our overall level of earnings in fiscal 2012, and the potential resolution of tax contingencies. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. Although timing of the resolution and/or closure of audits is not certain, we do not believe it is reasonably possible that our unrecognized tax benefits would materially change in the next 12 months.
The Companys business is impacted by the general seasonal trends characteristic of the apparel and retail industries. Sales from retail operations in the past several years have been highest during the third and fourth fiscal quarters, somewhat lower during the first fiscal quarter, and lowest during the second fiscal quarter. Consequently, the results for any fiscal quarter are not necessarily indicative of results for the full year. These historical quarterly trends may not continue in the future.
quarterly report). The assets of the VIEs cannot be used by us. Working capital as of April 28, 2012 was $180.4 million compared to $169.9 million as of January 28, 2012.
Net cash provided by operating activities for the 13 weeks ended April 28, 2012 was $20.0 million, which is relatively flat compared to $19.0 million in the same period last year.
Net cash used in investing activities for the 13 weeks ended April 28, 2012 was $8.8 million compared to $9.3 million in the same period last year, and consisted primarily of capital expenditures related to the opening of new stores, information technology improvements, and investments in our distribution center.
Net cash used in financing activities for the 13 weeks ended April 28, 2012 was $0.9 million, compared to net cash provided by financing activities of $6.3 million in the same period last year. Net cash used in financing activities for the 13 weeks ended April 28, 2012 was primarily related to a quarterly principal payment of $2.1 million on our Term Loan as well as costs paid to refinance our ABL, partially offset by a capital contribution from an affiliate of our indirect parent company, Giraffe Holding, Inc. (Parent). Net cash provided by financing activities during the 13 weeks ended April 30, 2011 was primarily related to capital contributions made by Parent to us of $14.9 million partially offset by $6.6 million in costs paid in connection with the February 2011 refinancing of our Term Loan and $2.1 million in quarterly principal payments on our Term Loan. We anticipate cash used in financing activities during the remainder of fiscal 2012 to include a $15.6 million prepayment on our Term Loan due to fiscal 2011 excess cash flow (see Note 5 to the condensed consolidated financial statements included elsewhere in this quarterly report).
We have an $820 million Term Loan and a $225 million ABL Facility. As of April 28, 2012, $809.8 million was outstanding under the Term Loan and no amounts were outstanding under the ABL Facility. There was approximately $172.5 million of undrawn availability under the ABL at April 28, 2012. Amounts available under the ABL are subject to customary borrowing base limitations and are reduced by letter of credit utilization. The Term Loan and ABL also allow an aggregate of $200 million in uncommitted incremental facilities, the availability of which is subject to our meeting certain conditions. No incremental facilities are currently in effect. The Term Loan and ABL contain covenants that, among other things, restrict our ability to incur additional indebtedness and pay dividends. The ABL also contains financial covenants. As of April 28, 2012, the Company was in compliance with these covenants.
We anticipate that cash and cash equivalents generated by operations, the remaining funds available under our Term Loan and ABL, and existing cash and cash equivalents will be sufficient to meet working capital requirements, service our debt and finance capital expenditures over the next twelve months. We cannot assure you, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in amounts sufficient to enable us to repay or refinance our indebtedness, including the Term Loan, the ABL and the Notes, or to fund other liquidity needs. See Item 1A. Risk FactorsRisks Related to Our Indebtedness and Certain Other Obligations, in our Fiscal 2011 Annual Report.
There have been no material changes outside the ordinary course of business to our contractual obligations since January 28, 2012, as disclosed in our Fiscal 2011 Annual Report.
There have been no material changes to our critical accounting policies and estimates affecting the application of those policies since our Fiscal 2011 Annual Report.
We enter into forward foreign exchange contracts with respect to certain purchases in United States dollars of inventory to be sold in our retail stores in Canada. The purpose of these contracts is to protect our margins on the eventual sale of the inventory from fluctuations in the exchange rate for Canadian and United States dollars. The term of the forward exchange contracts is generally less than one year. We also enter into forward foreign exchange contracts with respect to short-term intercompany balances between U.S. and Canadian entities. The purpose of these contracts is to protect us from fluctuations in the exchange rate for Canadian and United States dollars upon the settlement of such balances.
The table below summarizes the notional amounts and fair values of our forward foreign exchange contracts in U.S. dollars.
We are subject to interest rate risk in connection with our long-term debt. Our principal interest rate risk relates to the outstanding Term Loan. We had $809.8 million outstanding under our Term Loan as of April 28, 2012, bearing interest at variable rates. A 0.125% increase in the floating rates applicable to the indebtedness outstanding under the Term Loan would have increased annual interest expense by approximately $1.0 million. The Term Loan and the ABL also allow an aggregate of $200 million in uncommitted incremental facilities, bearing interest at variable rates. No incremental facilities are currently in effect.
In December 2010, we purchased four interest rate caps to hedge against rising interest rates associated with our Term Loan above the 5% strike rate of the caps through December 23, 2016, the maturity date of the caps. The notional amount of these caps is $700 million. As of April 28, 2012, January 28, 2012, and April 30, 2011 accumulated other comprehensive loss included approximately $9.9 million, $10.7 million, and $2.2 million respectively, in unrealized losses related to the interest rate caps.
including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on the Companys evaluation, the Chief Executive Officer and Principal Financial Officer concluded that the Companys disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information relating to the Company (including its consolidated subsidiaries) required to be included in the Companys reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. In addition, the Companys Chief Executive Officer and Principal Financial Officer concluded as of the end of the period covered by this report that the Companys disclosure controls and procedures are also effective to ensure that information required to be disclosed in the Companys reports filed or submitted under the Exchange Act is accumulated and communicated to the Companys management, including the Chief Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.
During the first quarter of the Companys fiscal 2012, there was no change in the Companys internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.
The Company is subject to various legal proceedings and claims arising in the ordinary course of business. Our management does not expect that the results of any of these legal proceedings, either individually or in the aggregate, would have a material adverse effect on our financial position, results of operations or cash flows.
31.1 Certification of Matthew K. McCauley Pursuant to §302 of the Sarbanes- Oxley Act of 2002.
31.2 Certification of Lynda G. Gustafson Pursuant to §302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Matthew K. McCauley Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to §906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Lynda G. Gustafson Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to §906 of the Sarbanes-Oxley Act of 2002.
101 The following materials from The Gymboree Corporations Quarterly Report on Form 10-Q for the quarter ended April 28, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) (iv) Condensed Consolidated Statements of Cash Flows, and (v) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.
(1) Incorporated by reference to the corresponding exhibit to The Gymboree Corporations Current Report on Form 8-K filed with the SEC on April 5, 2012.
(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

References: §302
 §302
 §1350
 §906
 §1350
 §906